OKR is a blueprint of your company's goals and projects in the future they want to work on. And sharing that to employees and display the transparency of what they exactly are they working, in which field their projects on, what's financial gain they will receive, and how their products are impacting in society, will all be shared on OKR(Objectives and Key Results).
All these doubts will be cleared with one thing: OKR
OKR is Objectives and Key Results, which can be divided into 3 important questions!
- Objective: What's your destination?
- Key Results: How do you know you're there?
- Initiatives: How will you get there?
Everything you need to know about basic OKR
To get a better understanding, let’s understand with an example :
- Imagine you’re in London (UK). You need to go to New York (USA). “New York” is your Objective.
- To reach your objective, you’ve decided to buy a yacht and sail west for 8 days. That is likely to get you closer to your Objective. “Buy a yacht” and “Sail west for 8 days” are your Initiatives.
- Without a navigation system, like GPS, it will be impossible for you to know whether you are getting closer to your destination. Your Key Results are your GPS device, which tells you if you’re heading in the right direction.
Now understanding each term with OKR :
Objective (What's your destination?) :
It should set a clear destination such as New York. Examples of business OKR: a. Beat last quarter’s revenue growth b. Provide an awesome customer experience.
Key Results (How do you know you're there?) :
See them as a GPS device. They tell you if you are getting closer to your Objective. Examples: a. Close €1 million in new bookings.
Initiatives (How will you get there?) :
The key things or efforts that you will do to achieve your Objective. Examples: a. Host 3 webinars b. Implement in-app live chat million in new bookings.
How to pick the right objective :
Look from the company's eye for mission & vision :
Objectives must drive the organization forward. They should get you closer to your vision and/or help you realize your mission. If this connection is clear, it’s easy for everyone to see the bigger picture—which automatically improves their understanding of the Objective’s importance. Think about the areas that you can influence, and focus your Objectives on these areas.
OKRs are all about metrics—by setting measurable key results, companies can more easily assess the progress of initiatives and understand whether they achieved their goal.
The OKR framework is more than goal-setting, it’s a framework that requires a cultural shift to tear down traditional silos and business walls—and instead, foster a culture of transparency, where all goals are open, and progress is viewable by everyone.
When you create a new objective, it is with the understanding you possess the means to realize it. OKRs can generate cross-functional coordination, but your objectives should primarily be within your control.
Example of OKR:
Objective: Increase brand recognition to make the company the market leader.
Key result: Increase revenue to $750M in 2020
Key result: Reduce net revenue churn by 2.75% in 2020
Key result: Improve customer retention to 98.6%
Common mistakes when writing OKRs:
- Objectives are not challenging or do not stretch
- Key results aren’t quantifiable
- Creating too many objectives or key results
- Creating a list of tasks
- Writing OKRs that don’t have an impact
OKR's should be realistic and achievable. The agility in the OKR is also crucial for adding goals or altering the strategies in a deteriorating situation. The higher authorities should first consider their upper-level goals to be clearer and then making sure that every employee should understand the goals of the company.