Key Guidelines for setting OKRs
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While Objectives and Key Results (OKR) is accepted as the framework that modern companies adopt to drive their performance – organizations’ need clarity about how to define these OKRs for themselves: We typically hear questions like – How to compose good OKRs? What should I include in my OKRs? What are the examples of OKRs?
We thought it is best to understand OKRs and address these queries through practical examples.
Let’s first recap some basic concepts.
OKR or Objective and Key Results, is a popular leadership technique that helps organizations set, communicate, and track their goals.
It is a holistic approach towards management of goals and performance levels of employees at every level of the enterprise. It helps in creating better alignment and engagement around measurable goals, which is usually set every quarter.
Basically, OKR is composed of two components:
What are you trying to achieve?
The obvious answer is – the objective. Your objective is where you want to be. It therefore must be accurate and time-bound.
Usually objectives have a timeline of month to month or quarterly. We prescribe having close to 1 to 3 objectives for each group, per quarter. However, the specifics can be modified upon the requirements of your organization.
An Objective has to be quantitative to be effective. For example, ‘Make a lot of Money’ can’t be objective, whereas ‘Increase Profit by 20%” is an effective objective as long as it is time bound.
How are you going to achieve the Objective?
The answer is – the key results. Key Results are the tasks that you complete to achieve the larger objectives. The key results should be significant and measurable by a particular parameter.
1. Company OKR
OBJECTIVE: Delight our company customers
2. CEO OKR
OBJECTIVE: Strengthen our corporate culture
3. Marketing Department OKR
OBJECTIVE: Improve efficiency of the marketing system
4. HR Department OKR
OBJECTIVE: Hire 100 new employees by March, as per the plan
5. Design Department OKR
OBJECTIVE: Design product as per client’s requirements
6. Sales Department OKR
OBJECTIVE: Achieve revenue of $10 million from new wins
7. Finance Department OKR
OBJECTIVE: Shortlist counter-parties to raise $250 million for new project funding