We must give credit to Internet-based companies such as Google, Twitter, and Zynga for their contributions to management science. In efforts to maintain, and expand, market share these modern corporations have created measurements to help better define success in a highly competitive world. Objectives and Key Results (OKR) is one of the innovations. It is a means of identifying goals and tracking the progress made towards desired outcomes.
The Basics of Objective Key Results (OKRs)
New methods for tracking productivity and goal achievement are sometimes as mystifying as rune stones to managers. The jargon and explanations often appear very confusing. Simply put, OKR is a means to make certain that everyone on a team or part of a department is singing from the same hymnal.
Every objective that is prepared for a work unit has a final result; an outcome for all the activity performed during a specified time to reach a set goal. Management begins by creating an objective from the mission and vision of the overall organization. A series of actions and efforts, known in OKR language as “Todos” explain how the determined objective will be accomplished. OKR does have a structure to it and a set of guidelines which are to be followed. There are four primary rules:
1. A Time Frame is to be Created. It depends on the organization. The time measure can be monthly, quarterly, or annually. These time frames are also used to gauge the overall success of the organization itself.
2. There Should Only Be A Few Objectives. OKR limits the number of objectives to five, and no more than four key results will be allowed in a given quarter. That is essential to the success of the overall OKR plan. The small number allows for a greater, more focused, concentration on reaching the final outcomes.
3. Objectives and Results Need to Challenge the Employee. More can be accomplished if employees are required to set their sights a bit higher. It is expected not all efforts will result in 100% success. However, elevated levels of motivation can lead to achievements that are 70% or more of what is desired.
4. A Key Result Must Be Quantifiable. It is an accepted business practice that results must be measured. It is also understood there must be a number attached to an outcome to measure success and to better create a learning experience.
Obviously, the beauty of OKR is the structural simplicity. It does not mean that there will not be a lot of attention and work throughout the process. OKR emphasizes planning and execution and has been proven successful by Google and other major companies.
Ideas and theories are nice on paper but too often can’t be executed in real situations. Objective Key Results has worked for Google and Twitter. How these and other corporations put their strategy into operation should be examined.
Google was in its early stages as a company when it adopted OKR. Recognizing it as a way to bring structure to the company, Google has OKR at all levels: personal, manager, work teams, and corporate management. Key results are measured 0-1.0, but no one is expected to get the perfect score of 1.0 on a key result. If that should happen, the key result may have been too easy to reach in the first place It is anticipated that a measurement of approximately 0.7 is going to be attained. Warning flags come up when the key result measure falls below the 0.4 mark. Too many key results cause problems, and Google limits the number OKRs per quarter. A major quality is transparency. The OKRs are a matter of public record in the Google corporate culture. Anyone can find out the OKR of anyone else in the company. This complete transparency is the same method that DeepTalent uses.
The transparency is not intended to embarrass anybody. It accepts the fact communication is vital for rapidly growing companies. Twitter uses OKR as a communication tool that makes every priority understandable. Performance is measured, but the data also evaluate the strategy being used. Figures let top management know very quickly whether the game plan is the right one to use, or if adjustments must be made. LinkedIn recognizes that sometimes the corporate mission is not firmly set in the minds of employees. The company will tie its OKRs to the mission, and staff members are acutely aware of the direction they are heading. The human side must be recognized. Each LinkedIn employee is made to feel personal efforts make a difference in reaching overall goals. Consequently, the personal OKRs assigned are intended to permit the individual to contribute in supporting corporate objectives directly.
Tips and Ideas
Those companies which have used OKR learned from the experience. There are some thoughts developed that can help any organization install an OKR structure and begin seeing results as soon as possible.
• Acceptance by Everyone. The approval executive management is a given, but it doesn’t always mean the rank and file are going to accept it. A company must go beyond the normal rollout communication of a new program. Indeed, everybody should follow up on OKR activity. It may mean managers being a little bit firm with subordinates, but that is fine. Everyone must accept this new way of doing things for it to be successful.
• Don’t Go Half Way. OKRs must be ingrained in the culture to achieve full success. It starts at employee orientation and continues every day of the working year. It has already been stressed how important public knowledge is to the process. Accurate and timely progress towards goals will reinforce the program.
• Use the Right Tools. OKRs should have the figures documented, and results shared, without any delay or problem. The DeepTalent OKR system was designed to automate the entire goal process: including-check-in and goal alignment.
• Keep Things Streamlined. A major problem confronted by other management techniques has been documentation and form completion. There can be so much paperwork involved that a person feels overwhelmed, and a manager may move the record-keeping to the far end of the desk. Meetings don’t have to be every week, and ought to happen only when they are needed. Implementation and not discussion will be what makes OKR strategies successful.
• Keep Your Eye on the Forest. The OKRs created must support the overall mission and not a small agenda. What people are required to do is intended to help meet overall objectives, and the assigned OKR must lead in that direction.
• Ideas Flow in a Two-Way Current. Everyone who has taken Business Management 101 in college knows the story about bureaucracy. Ideas go from the top to the bottom through a maze of offices and levels of management. That cannot work in the modern business world. Ideas generated at the employee level ought to be considered in the corporate goals. It does more than just permit staff to claim ownership of projects. It reminds senior executives of the internal market and the significance of staying connected to those doing the work.
• Patience Is a Virtue. There is a learning curve, and both management and staff must accept that. OKR is going to require a corporate culture change, and it will take some time. Persistence is going to help, and this strategy requires everyone to stay the course to be successful. Any mistakes that occur along the way need to be thought of as learning moments. To be sure there are some common mistakes which are part of the process. The worst one is assigning too many OKRs. It can lead to burnout and dissatisfaction. Decision-makers must establish priorities, and these, in turn, should be identified as supporting overall corporate objectives.
Another problem is a tendency to have measures which are not quantifiable. The efficiency of the OKR method is in the data produced. While people may want to have qualitative measures, it is the hard statistics which point to real success or failure.
Success of OKR
This management strategy is the darling of Silicon Valley and moved Google from a staff of less than 50 people to over 60,000 people currently. It shows that even a small company with few employees can take advantage of the benefits.
OKR is not the latest fad. It needs to be treated as a transforming tool. Once a company has committed itself to using it, the procedures cannot be ignored. Managers must, if necessary, remind people of what they are expected to do within the structure of this strategy. Companies make a mistake if they try to tailor their OKR to an existing program. Not every company is Twitter or Google. Trying to emulate their respective models can lead to problems. It is essential to know what the basic principles are of Objective Key Results and be mindful of what can be possible problems. Beyond that, a company is at liberty to develop a strategy in a way that best suits the organization.
Change is a constant and must be accepted in the modern marketplace. This management strategy has been shown to be highly successful and allow companies to be very competitive. It can help an organization, no matter what size, be more efficient in reaching goals and objectives.