As an HR professional within your company, you play a vital part in setting and achieving organizational goals. HR departments are now more and more involved in the process of organizational development. That includes creating and helping execute organizational goals.
Each organization out there uses some system to set and track goals. Of course, that varies by size, industry, and nature of the company. Regardless, it is becoming more common for HR’s responsibilities to include establishing clarity and alignment of goals company-wide.
That means setting up a solid goal management process in place that helps the establishment meet its ambitious targets as well as looking after the professional and career development of each individual.
That is no easy task. For years, teams have been using different types of goal setting techniques to meet objectives. While that works to a certain level, successful goal management now relates to setting company-wide goals and aligning teams to work collectively towards achieving those. This is how the OKRs framework was born.
What is OKR?
Since the mid-20th century, different goal management techniques have been implemented in organizations with the intent to create alignment and reach targets within a given time frame. First came the MBOs (Management by Objectives), then the popular SMART goals gained traction alongside the well-known KPIs. OKR was developed at Intel in the early 1970s, gaining broad attention when they were adopted at Google. Some of Google’s success has been attributed to this framework that sets ambitious goals and tracks progress accordingly.
What’s the difference between KPIs and OKRs and how are they related? See “How KPIs and OKRs Work Together to Achieve Results”
OKR stands for “Objectives and Key Results.” It is essentially a goal-setting and management framework that is used by organizations worldwide to successfully meet audacious objectives.
When using this framework, objectives are supposed to be more aspirational and qualitative, while the results are measurable, time-bound and specific. “Key Results” are outcomes you’re after, not a to-do list.
What makes OKR very different and unique compared to all other goal management techniques is that OKRs are created with the intention to be used organization-wide drive alignment. They should be tied to the company’s mission and vision and should be created with a top-down direction and bottom-up feedback approach. Making them visible to everybody, and making sure that the company OKRs are broken down to team OKRs, is what distinguishes this framework from the others and promotes alignment up and down the organization.
Why use OKR
Creating good OKRs is an art. I’ll explain how you can do that in the next section. But before we get into that, it’s important to understand why OKRs can be transformational for your organization and what benefits they offer.
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- Create alignment – Once connected to the company’s mission and vision, the organizational OKRs cascade down into OKRs for each team. This will inevitably create alignment and assure every individual is working toward the same goal. Gallup research shows employee productivity can increase by 56% when managers are involved in helping employees align their goals with the needs of the organization or the company’s purpose.
- Promote transparency – One of the key features of OKRs is that they need to be visible to everyone in the organization. This way, people can see what every department is working on and individuals can see how their work contributes to the overall success of the organization, which can be extremely rewarding and motivating.
- Supercharge progress – The beauty of OKRs is that creating them forces you to get really specific about what you want to achieve, what key results need to be accomplished in the shorter term and how long you give yourself to do that.
OKRs are stretch goals and are supposed to make you feel at least a little bit uncomfortable. If you imagine that meeting your objective is actually a 120% success rate, then getting 100% of your key results is already a massive success. OKRs are not about fully achieving every objective, every time. They’re about progress.
The main idea of OKRs is to push teams and individuals to think bigger and aim higher. Achieving all objectives on a regular basis simply means that your objectives are not ambitious enough.
How to create good OKRs
The basic formula for creating good OKRs is “I will < > as measured by < >.”
While putting your OKRs together, you need to answer the following questions for yourself and your team:
- Why do this? — You need to have a clear sense of why. What is the reason behind what it is you want to do or achieve? If you don’t know, there’s a big chance you won’t follow through with your goals.
John Doerr, the man who popularized OKRs and introduced them to Google, compares OKRs to transparent vessels that are made of the whats and hows of our ambitions. However, what really matters is “why” – the driver behind all your future actions.
- What do we want to accomplish? — Once you have the big “why” figured out, start thinking about your objectives. Objectives should be aspirational, yet clear enough and quantifiable so your team will know at the end whether an objective has been met or not. Research has shown that the more clear and defined your goals are, the higher the chance employees will achieve them successfully.
- How are we going to meet our objectives? — The key results are outcomes, which if accomplished, then the objective should be met.They are specific and time-bound, aggressive yet realistic, and measurable as well as verifiable. You can include from 2 to a maximum of 5 key results per objective (3 KRs seems to be the best way to go).
Make sure to create regular follow-ups within teams and on an organizational level to determine how everybody is progressing and to make sure people are on track. A good system to set in place is weekly check-ins between teammates as well as quarterly reviews and annual revisions on a company level.
There are plenty of resources out there that dig deeper into the topic of OKR – what you can do to make sure OKRs are set up correctly and how to make use of them to transform your organization. A good starting point is the “Ultimate Guide to OKRs.”
Your organization is already setting and managing goals in some way. A framework like OKR helps you collect all of that effort under one umbrella and guide teams to implement a top-down direction and bottom-up feedback strategy.