Company’s and CEO’s strategic Objectives and Key Results are defined
All departments make their own OKRs in alignment with the CEO objectives—the OKR procedure works best when it draws on capability at each stage of the association to help the company win
Gather feedback from teams and allow for iterations
Important to identify and highlight inter-dependencies between departments, teams.
Most companies ought to consider keeping away from individual OKRs bound to execution management
Review OKRs frequently in team meetings
Make sure learning from review are documented and used for the next OKR cycle
Introduction
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.
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:
Objective; which is qualitative and defines what one wants to achieve
Key results; which are quantitative and define how you will measure progress towards the objective
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.
For example,
Increase customer retention by 80-90%.
Reduce distribution costs by 10%.
Seize into the Gartner Magic Quadrant
What’s different about OKRs?
OKRs align with the top company objectives more clearly, precisely and reliably
Align everybody’s efforts on priorities and what moves the needle
Set challenging goals
Allow agile goal setting
Let you achieve transparency, ownership, and encouraging
Here are some examples of OKRs
1. Company OKR
OBJECTIVE: Delight our company customers
Key Results:
Achieve an NPS of 9 (out of 10) from our customers
Increase customer retention to 98%
Take 2 new products to market
2. CEO OKR
OBJECTIVE: Strengthen our corporate culture
Key Results:
Roll out a continuous two-way feedback loop via monthly surveys
Maintain an average employee satisfaction a score of 8 or higher
Create & launch a new mentor-ship program by the end of Q2
3. Marketing Department OKR
OBJECTIVE: Improve efficiency of the marketing system
Key Results:
Generate 100 more lead than last year with the same budget
Deploy an intelligent marketing automation system in Q1
Deploy two new channels for marketing in Q1
4. HR Department OKR
OBJECTIVE: Hire 100 new employees by March, as per the plan
Key Results:
Obtain 500 relevant resumes before January
Shortlist and meet 200 candidates by February
Interview and make offers to 120 candidates by March.
5. Design Department OKR
OBJECTIVE: Design product as per client’s requirements
Key Results:
Meet with client to understand design brief, concept, performance and production criteria by Q1
Design a draft and get approval from client Q2
Design a beta version of a product by Q3 and submit to client
6. Sales Department OKR
OBJECTIVE: Achieve revenue of $10 million from new wins
Key Results:
Generate 100 leads worth $100 million in Q1
Submit proposals worth $70 million by Q2
Execute contracts worth $ 50 million
7. Finance Department OKR
OBJECTIVE: Shortlist counter-parties to raise $250 million for new project funding
Key Results:
Identify possible sources of funding by Q1 and start initial discussions
Submit Information Memorandum and shortlist 5 possible parties
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