Beginner’s Guide to Objectives & Key Results
- 2. Index The origin of OKRs The need for OKRs .................................................................................................................................................. Introduction 03 1. Objectives Key Results What OKRs are, and what they aren’t ........................................................................................................................ Understanding OKRs 07 2. .................................................................................................................................... Benefits of OKRs 10 3. ............................................................................................................ The RIGHT OKR Cadence 11 4. .............................................................................................................. Pitfalls in the OKR world 13 5. ............................................................................................................ The OKR Success Stories 15 6. ............................................................................................................................................ About Upraise 16 7. Page 2
- 3. 1. Introduction Objectives & Key Results (OKR) is a framework that provides fundamental principles to create a goal structure for organisations of different shapes and sizes. It doesn’t define processes to achieve the objectives, and teams can use them in any way they see fit, to Re-architect Work. The framework is flexible and resilient enough to handle changes in talent pool, engagement models, cognitive tools etc. and helps organisations accelerate their performance. The rise of augmented workforce, pioneered by the current Work From Anywhere (WFX) culture, need organisations to learn and adapt. OKRs help in achieving these goals. popularizing OKRs This system was at use in Intel in various forms, and quite a few managers and leaders who worked with Mr . Grove took the principles with them – including investor and venture capitalist John Doerr . He introduced the co-founders of Google to the system, who are frequently credited with . Since then, they’ve become commonplace in organisations big and small. 1. Where do I want to go? 2. How will I pace myself to get there? The origin of OKRs OKRs can be traced back to the “Management By Objectives” system, founded by consultant and author, Peter Drucker . This system was then adapted by Andrew Grove, the former CEO of Intel. He boiled down the principle to answering two core questions: Pa g e 3
- 4. Page 4 1. Introduction Ideas are easy. Execution is everything. “Measure What Matters” writer John Doerr The Need for OKRs The changing dynamics of the industry need a different way to measure and improve performance. Only relying on metrics a few times a year when requirements are changing almost every day, is not effective enough. Organisations have been trying to find solutions to different problems to keep up with the needs of employees, and here are a few of them.
- 5. Page 5 1. Introduction Need of the workforce Disciplined & structured thinking Crystal clear communication Aligning efforts to reach a shared goal REASON BEHIND THE NEED It is difficult to find structure in the always-on information economy, unlike the post industrial revolution world where discipline & structure came from assembly lines. Miscommunication and misinterpretation of vital information that happens because of multiple lines of communication - emails, chat applications & umpteen collaboration software running the workplaces. Nowadays the shared goal can have 100s of manifestations based on personal inferences, perceptions & preferences, as opposed to the times where the shared goal used to be very tangible – like an automobile, a mechanical engine etc. HOW OKRs CAN HELP Adding a transparency clause through publicly available organisation goals Providing a way to keep the larger picture in sight. Communicating priorities in concise ways, as OKRs recommend not more than 3-5 top priority items to be focused on at a time. Cross functional collaboration managed through transparency & alignment.
- 6. Page 6 1. Introduction Need of the workforce Remove ambiguity by defining measurable success & failure Disruption REASON BEHIND THE NEED In the knowledge economy, definition of success & failures become pivotal as these successes/failures are not self-evident to the workforce unless they are at a large scale. In the ever changing world of technology, if companies do not move quickly - they will be run over by players disrupting their industry. HOW OKRs CAN HELP Using Key Results makes every objective measurable, and no space is left for interpretation. Aiming for the moon. OKRs promote setting uncomfortable & stretch targets.
- 7. 2. Understanding OKRs Objectives An objective is a description of the goal that needs to be achieved. It is typically a long-term goal, and it can be seen as the destination the organisation needs to reach, on a map. An Objective is an aspirational message that managed to capture the attention of employees, customers, and other stakeholders. Key Results To measure progress towards the objective, key results are used. They have a starting value and a target value, and they measure the progress towards achieving the set objectives – for employees, teams, and others. If Objectives are the destinations, Key Results are the mile-markers that let us know if the steps being taken are in the right direction. Care must be taken to ensure the list of Key Results is not a to-do list, and a maximum of 5 KRs for each objective is recommended. These key results can be classified into two categories, Value Based and Activity Based. The value-based KRs measure outcomes of activities and how those activities are delivering value. For example, A KR that says ‘Increase redemption % of points to expire from 45 to 55’ focuses on culture, not a task. When the KR is value based, it focuses on improving an existing solution or product, and not create something new from scratch. Activity-based KRs, on the other hand, measure completion of activities & tasks. These Krs are designed to convert an activity into value, and they explain what the organisation intends to achieve. Page 7
- 8. Page 8 2. Understanding OKRs What OKRs are, and what they aren’t Objective Key Result Aligned Ambitious Directional High Impact Inspirational Measurable Specific Time Bound Understandable Within Circle of Influence
- 9. Page 9 2. Understanding OKRs Example OKRs Example Objectives Enable dominance in the industry through acquisitions Be known as one of the best places to work Optimize sales functions to close more deals Create a more goal-oriented culture Make support team more self -sufficient Corresponding Key Result examples Complete Feasibility study of acquiring XYZ inc. by Q1 Reach top 10 in Fortune 100 best places to work Increase cold call conversion rate to 20% Initiate OKR adoption activities by Q2 Reduce escalation of tickets by 10%
- 10. 3. Benefits of OKRs An objective is a description of the goal that needs to be achieved. It is typically a long-term goal, and it can be seen as the destination the organisation needs to reach, on a map. An Objective is an aspirational message that managed to capture the attention of employees, customers, and other stakeholders. Even when OKRs don’t work as expected, practicing organisations and teams can understand a lot by analysing the root causes of objectives not being achieved. The failures also point out any shortcomings in resource allocation and management, and provide managers a way to identify cross-functional dependencies across teams. Align corporate objectives to that of the employees’ Provide direction to every team and individual Increase productivity by focusing on objectives Track progress towards objectives regularly Enable informed decision that have a better chance of being effective Provide accountability, transparency and a method to measure progress Regular/weekly updates that provide insights and a chance to build an understanding team Keep the employee engagement and empowerment rate high Page 10
- 11. 4. The RIGHT OKR Cadence No two goals are made the same, and tactical goals tend to change much faster than strategic goals. So, most OKR implementations adopt variable cadence to ensure the process runs smoothly. The usual approach is to adopt a dual cadence framework to separate strategic & tactical OKRs. Organisational OKRs usually have a longer shelf life, as they are mostly strategic in nature. Team & Individual OKRs are revisited at a higher frequency - from every month to every six months. Monthly OKRs tend to be efficient for a startup that is trying to achieve product-market fit, and a company that is already serving a long list of customers can use quarterly cadence. Deciding the cadence Deciding on a set frequency for OKRs can create issues, as different projects and departments have their separate timelines that must be adhered to. Based on the level of OKR, the cadence can be decided: Page 11 This question is relevant to industry verticals that have high turnovers, where iterative development is the norm. Having shorter OKR cycles helps employees to keep up with the trends of the industry and restructure new OKRs to fit the needs of a changing market. The strategy cadence This question is important for smaller organisations, as the rate of success defines the future of the organisation. Even for established players, having the right cadence for tactics enables them to compete with nimble-footed startups. Tactical cadence
- 12. Page 12 4. The RIGHT OKR Cadence A strategic cadence with high-level, longer term OKRs for the company, which are not set in stone helps organisations maintain the strategy conversation throughout the year. Organisational OKR cadence While most of tem OKRs are tactical, their scale tends to be much lower. A tactical cadence with shorter term OKRs works for small to medium-sized teams. Team cadence Regular check-ins for tracking results are necessary to keep a tab on the progress of OKRs in the organisation, and having a proper review cycle can help managers identify gaps and them rectify it, either by providing the team with better resources and coaching. A follow-through cadence For example, Spotify developed their version of OKR called Spotify Rhythm which uses a strategic cadence of 6 months and a tactical cadence of 6 weeks.
- 13. 5. Pitfalls in adopting OKRs Too many objectives or too many key results The principle behind OKRs is to simplify the engagement process, so that performance of employees can improve. Managers, however, can get carried away and assign too many Objectives and KRs to their team members – defeating the purpose of keeping the process simple and concise. It is advised to keep the number of KRs to a maximum of 5, per objectives. The objectives themselves should not be more than 7 or 8 for any employee, or team. Setting up vague key results Key results play an important part in the success of OKRs. They are the milestones which indicate if the team/organisation is progressing well, and not defining them clearly will give no clue about the eventual objective. So, The KRs must be accurate, have a definitive start and end date, and a tangible result that can be measured. Only Top-down approach Relying on employees in managerial positions to improve the performance without any tools may not work anymore. While employees love to hear feedback, they aren’t that forthcoming when they have to critique employees above them in organisational hierarchy. Enabling a communication medium where team members can be vocal about their problems, allows leaders to take a look at the real issues. Page 13
- 14. Page 14 5. Pitfalls in adopting OKRs Not accommodating OKRs in daily workflow OKRs need to be revisited often, and in many cases – on a daily basis. Not making them a part of everyday life, can lead to the impossible expectations and frustration. Blindly copying others methodology It is easy to get inspired by someone else’s ways of handling issues. The objectives and key results, if set properly, will not be the same for two employees. Hence, trying to use a methodology used by others will not be useful, either. Tasks are different from KRs Key Results are goals that take organisations and employees closer to the stated objective. Tasks, on the other hand, show how employees
- 15. 6. The OKR Success Stories Organisations adopt OKRs in ways that suit them, and this leads to a varied mix of examples. From Silicon Valley giants to exciting new startups, OKRs can be found at various verticals and industries. Pa g e 1 5 The leader of search follows annual strategic cadence and quarterly tactical cadence. The founders, Larry Page & Sergey Brin, have made their goals available for anyone to see within the company. Executives also own a bunch of individual OKRs, and not just organisation-level OKRs. The leader of search follows annual strategic cadence and quarterly tactical cadence. The founders, Larry Page & Sergey Brin, have made their goals available for anyone to see within the company. Executives also own a bunch of individual OKRs, and not just organisation-level OKRs. Sears has an opt-in policy for OKRs, and the popularity of the same is increasing. The organisation reports about 60-75% participation, quarter by quarter .
- 16. Page 16 No better place than JIRA to find context No separate system, rapid adoption Connect execution with strategy About UpRaise UpRaise is the only context aware, full stack app that seamlessly integrates with daily workflows of software development teams. Its “Re-architect Work” principle guides teams towards excellence through improved overall efficiency of people operations, better alignment to organisation’s larger goals, increased engagement and improved transparency. UpRaise helps organisations achieve operational and intellectual excellence with Employee Success, a JIRA-based comprehensive Employee Performance Management platform. Natively developed for JIRA as a plugin, Employee Success includes enterprise grade features such as Objectives Management, Continuous Feedback & Performance Reviews. Other UpRaise solutions like Employee Garrison and Upraise People, simplify employee management. They enable management of employee records, leaves, OKRs, feedback & reviews, and more – within Jira.