OKR method – what is it and how is it used? Goals and key results: 5 principles of effective planning and achieving goals in teams and organizations
As an entrepreneur, you probably know various classic systems of company management and goal management, including the MBO method, i.e. Management By Objective. In today’s article, we will present the method of managing the objectives of OKR, which is currently the most effective method of managing the goals of the organization, used by company owners and managers managing teams and projects. It is often used by Turquoise Organizations, startups, software houses, IT companies, fast-growing and scaling companies
OKR method – what is it about
The name of the method comes from the English language, OKR stands for Objective Key Result, and even more precisely:
About – Objective – Achievement, Goal, Success (usually one ambitious goal per year and for the coming quarter)
KR – Key Outcomes – 2-4 measurable results, milestones that will measure whether you have achieved Achievement / Goal
The OKR method is aimed primarily at organizations, but it can also be used to measure the effects in individual projects, so it can also be used by managers, not just business owners. This method was developed by Intel, and today it is used by companies such as Google and Allegro.
OKR includes not only the main, clearly defined and ambitious goals, but also the process of setting priorities and practices that are to bring us closer to this goal.
For OKRs to be effective, 5 key principles for effective planning and execution must be implemented.
1. Set a clear, understandable and ambitious goal to be achieved
The set goal (Objective) should be short, understandable, engaging, ambitious and clearly defined. It is not only a goal in itself, but also a mission, a slogan that makes us want to pursue this goal. An example is “We are the most recognizable business coaching company in Poland”. When creating an Achievement, think about a strategic slogan / return (qualitative achievement) that you can or can do with a team, thanks to which you will introduce yourself, your organization or the area for which you are responsible for a higher level of development. When implementing OKR for a large organization of several hundred people, make sure that the teams create their own ambitious goals, and that they are consistent with the main goal of the organization.
2. Measurable and specifically defined 2-4 key results that can be easily assessed and answered the question: “we achieved or not”
Key Result is a set of metrics that bring us closer to the goal and allow us to determine their progress on an ongoing basis. When creating a Key Result, think about the specific results that will tell you that you and others have achieved your goal. For one Achievement, create up to 4 key results or 4 milestones that you can measure. Using the OKR method, each individual or team should produce its own key results for itself.
3. Transparency of goals throughout the organization and a transparent system with access and updating of progress
The OKR method supports transparency, in other words, the transparency of goals – they are to be clear and understandable for everyone in the organization. As a result, each team member knows how their daily work affects the entire enterprise. Everyone has access to checking the progress of goals on an ongoing basis, which allows for a possible change that will bring us closer to the effect and allow for even more effective work. The ongoing discussions of the entire team on Key Result give an overview of how each person’s daily work affects the final results.
4. Quarterly planning and recognition of achievements, learning for the future with missed OKR
For the OKR method to be effective, you should establish what you want to achieve in the next quarter. Operation in such a system is much more effective than setting goals for, for example, the next month. Monitoring a given goal may take place once a week during a meeting with the leader, once a month during a discussion of the entire team, and after the end of the quarter, it is necessary to make a summary and assess whether the goal has been achieved, and if not – what can be changed in the future to bring him closer. It is important to learn lessons and avoid mistakes next time.
5. Acceptance and appreciation when an ambitious OKR is 70% or 80% realized, openness to continuous learning.
It is important that once the OKR is established, you have the support of the entire team and that you value each other’s effects, and be open to continuous learning and drawing conclusions. By establishing a very ambitious OKR and achieving, for example, 80% of the effect, it is a very good result. Of course, as always, you have to analyze what was done well and what needs to be improved. If, by implementing the OKR system, teams start to regularly achieve 100% of their goals and key results, it may mean that they are afraid to set themselves ambitious goals and achieve them, which means that OKR has not been properly implemented in the organization.
Examples of OKR
Annual OKR for the organization: 2020: “Grow your company globally”
KR-1: Reach global sales of ….
KR-2: To increase sales by 100% in the CEE region
KR-3: Increase your global sales team by 100%
Q1 OKR for the team / department / circle: 2020-Q1: “Successfully launch the new XYZ service in Q1”
KR-1: Be awarded “Best XYZ Industry Premiere and New Service” at XYZ Conference
KR-2: Sell the new XYZ service to 20 new customers
KR-3: Get 10 written recommendations from clients who used the service and recommended it to their friends
Taking into account the fact that many world leaders use the OKR method, we have no doubts that it is the most effective method of achieving goals and company development nowadays. Our #ecoCoach team implemented the OKR method a year ago using the holaspirit platform. The OKR method helps us quickly develop the company and maintain total transparency and agility in managing the goals of the organization. We are also a Polish partner of the holaspirit.com platform, which is equipped with the function of entering, monitoring and updating OKR, and we help other companies successfully implement the OKR method throughout the organization. Additionally, thanks to the holaspirit platform, it is possible to implement self-management, holacration, sociocracy and create a Turquoise Organization.