Key Guidelines for setting OKRs
- 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
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.
Check our blog : How Adopting an OKR (Objectives & Key Results) Framework Makes Organizations Agile
What is OKR?
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.
- 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
2. CEO OKR
- Achieve an NPS of 9 (out of 10) from our customers
- Increase customer retention to 98%
- Take 2 new products to market
OBJECTIVE: Strengthen our corporate culture
3. Marketing Department OKR
- 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
OBJECTIVE: Improve efficiency of the marketing system
4. HR Department OKR
- 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
OBJECTIVE: Hire 100 new employees by March, as per the plan
- 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
6. Sales Department OKR
- 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
OBJECTIVE: Achieve revenue of $10 million from new wins
7. Finance Department OKR
- Generate 100 leads worth $100 million in Q1
- Submit proposals worth $70 million by Q2
- Execute contracts worth $ 50 million
OBJECTIVE: Shortlist counter-parties to raise $250 million for new project funding
- Identify possible sources of funding by Q1 and start initial discussions
- Submit Information Memorandum and shortlist 5 possible parties
- Complete negotiations and raise funds