How do Uber and Google achieve their goals? By setting OKRs. What about you?
Every company and team have their own way of setting and measuring goals. I’ve seen several different frameworks, but the one that inspired me, that many of you will be familiar with, is OKRs.
Google, Spotify, Uber, LinkedIn, Airbnb – just some of the world-beating companies that set ORKs in order to succeed. If you haven’t tried it yet, maybe now is the time?
In this article, we’re going to look at OKRs in more detail, as well as share some tips on how you can take advantage of this innovative framework.
What are OKRs?
Objectives and Key Results, or OKRs for short, is a simple tool to help companies achieve the right goals, by setting specific, measurable targets to hit over a short period.
John Doerr, who widened the use of OKRs during his time as a venture capitalist, (and wrote about it in his book Measure What Matters, which is brilliant, by the way) describes an OKR like this:
‘I will OBJECTIVE as measured by SET OF KEY RESULTS’
Each objective may have 3-5 key results attached to it, so if your objective was, ‘Increase profit by 10%’, your key results might be:
- Reduce costs of production by 10%
- Win 100 new customers
- Implement your new faster delivery system
Doerr recommends that a business sets 3-5 OKRs and that they set them every quarter, which should be the period of measurement.
The essential points with OKRs are:
- The objective is something that genuinely matters to the business
- The results are specific and measurable – you either win 100 new customers by the end of the quarter, or you don’t
- They are simple enough for everyone in the company to understand
Why do OKRs work?
Here at SalesWorks, we’ve just laid down our next set of OKRs. I like them for several reasons:
The simplicity of OKRs shows everyone in the company what they need to focus on for the next quarter. It helps each individual understand the vital role they role in achieving an important goal. OKRs increase collaboration between teams and team members.
OKRs aren’t directives from above. In fact, they work both ways, ensuring everyone throughout the company is working on solving the same challenges, which are also the right challenges.
Also, being able to evaluate and adjust your OKRs every quarter means you can adapt to changing business conditions. If you need to pivot or change your focus, just change your OKR.
My favourite quote from Measure What Matters is, ‘Ideas are easy, execution is everything.’
With OKRs, you get the clarity, collaboration and focus that makes for effective execution.
How to set OKRs
Now you know the value of OKRs to your organisation, let’s look at how to set them.
Firstly, make sure your objective is something worth doing. It has to be something that is essential to your company: a problem worth solving. You could set an objective to grow your social media following by 20%, for example, but if that metric doesn’t help your bottom line, what’s the point?
Next, make sure every team in your organisation can contribute to your OKRs. Everyone in your business needs to know the OKRs, understand their part in achieving them and have a hand in their success. If only certain individuals and leaders are committed, OKRs won’t be as effective.
Finally, don’t be afraid to shoot for the moon when you set your OKRs. Set them in a way that even if you don’t hit your specified targets, you have still achieved something beneficial for the business. John Doerr wrote that if a company reaches 100% of its OKRs, they were too easy. Dream bigger!
Once your OKRs are down, it’s time to plan how you are going to hit them. Go for it.