If you’re a business leader, you may well be familiar with Objectives and Key Results, or OKRs. If not, check out our guide here: What is an OKR?
So what is the case for OKRs? As a brief recap, They are a surprisingly simple management tool that takes strategic goals and ‘measures what matters’. They are agreed, measured and evaluated on a quick-fire basis, usually once a quarter. The approach helps to stimulate the innovation and productivity of a team, whilst aligning all efforts across the organisation.
The formula states: I will (do X) as measured by (Y). It combines an inspiring and motivating short qualitative intention, with precise and numerical metrics.
Why they work
They are responsive, simple, transparent and varied in tempo according to needs. Most importantly, they remove ambiguity from the goal-setting process. With the OKR framework in place, every individual in an organisation knows exactly what they, and everyone else, needs to do.
Furthermore, each person can see how their tasks play a role in achieving strategic goals. This provides a strategic imperative. After all, no one wants to be the weakest link in a network; and those with actively competitive edges will strive to excel. Think about it; when you know that your effort and output matters, you will naturally feel more motivated and determined to make it happen. Such is the power of the Objectives and Key Results framework!
Key points
Because they have short goal cycles, they allow businesses to become adaptive and responsive as change occurs.
Because they are simple and lightweight, businesses can focus on ‘doing’ at a pace.
Because they are transparent, everyone in an organisation can share them and see where alignment exists.
Because they are set strategically at a company level before each team is empowered to define their own tactical OKRs, they don’t require a laborious communication cascade.
Because they have are stretch targets, they encourage bold and ambitious moves! Additionally, because they aren’t linked to individual performance, employees are far more likely to take innovative strides and embrace the challenge of risks.
Even better, the OKR approach sits within the Intrafocus Strategic Planning process – from objective setting and KPI creation, through to project definition and evaluation. The tool can be used to great effect to support strategic processes. In fact, Objectives and Key Results must absolutely and wholly be linked to strategic planning processes to deliver value.
The Case for OKRs
Although studies are limited minimal use of OKRs could boost performance and sales at your company, researchers found that even limited use of the approach correlated to a performance increase of 11.5%. To put this into context:
Google used them to upscale from 40 employees to 60,000.
Sears used them to see their average hourly sales grow by 8.5%.
Bill Gates uses the tool at the Gates Foundation to measure progress towards their stretch goals; proving that OKRs also add value for non-profits.
Zalando used OKRs to bring Agile management to life and to encourage a culture of autonomy through better organisational alignment.
Case studies of OKRs in action
Although they were devised by Intel’s John Doerr, it is Google which tends to be heavily cited as a success story; using them to grow from 40 employees to 60,000. Other big brands that use the approach include Twitter, Accenture, Spotify, LinkedIn, Airbnb, Gap, Intel, Walmart and Target. In Europe, companies include The Guardian, the Royal Navy and ING Bank.
As mentioned previously, Sears proved a link between the use of the OKR methodology and financial results, seeing their average hourly sales grow by 8.5%. Additionally, their corporate associates became 11.5% more likely to demonstrate high performance.
Companies such as BMW have found that OKRs can be used to support culture change. Whole Foods found that their Millennial employers were actually checking their team OKR’s on their smartphones so that they could see how their individual input would affect the big picture, and to get real-time feedback.
Doerr, the creator of the framework, believes in OKRs so passionately, that he also uses them in his personal life – setting key results that made sure he attended family dinners as often as possible!
This proves the versatility and power of OKRs, and how they can be used to describe both the ‘how’ and ‘what’ of everything that an individual does; and ultimately, guide the bigger and more meaningful question of ‘why’.
Ready to find out more? Contact the Intrafocus team to take your business forward with a strategy workshop on your premises.
