A quick introduction to the Objectives and Key Results framework.
The acronym OKRs stands for Objectives and Key Results. Behind the scary terms is a goal-setting framework designed to help teams stay focused and aligned at scale. It started at Intel, but they've been more recently associated with Google they use OKRs to drive everything, using stretch targets to spark innovation.
These 2 companies are huge, both way past the 10,000 employees mark. So it could be tempting to dismiss OKRs as a sluggish model for big Enterprise, but in reality, it's a tool that can benefit every team regardless of their size.
The rules of OKRs are simple, but it takes time and efforts to do it right. In this post we'll explain the core principles of the framework and will see the different stages that you'll need to go through.
The 4 stages of OKRs
The journey to OKRs can often be divided into 4 different stages:
- Stage 1: There's no formal goal-setting in your organization - this is your starting point.
- Stage 2: You have a shared vision for your company and a handful of KPI-driven goals set by leadership.
- Stage 3: Your team starts to contribute to the goal-setting process and adopt the OKRs framework.
- Stage 4: OKRs are widely used in your organization to drive focus and execution.
Why adopting OKRs is hard
Most organizations start with a simple model. By doing a set of activities, you will increase your revenues and grow your customer base.
It translates into teams putting a lot of emphasis on tracking their outputs: features being releases, sales calls made, support cases being closed. The more throughput we see, the better.
The problem with this approach is that it lacks focus. Measuring the activity of your teams will give them a strong incentive to produce more. But, without a clear direction for the company, you're likely to see people wasting efforts on different priorities.
In the picture above, teams are working equally hard, but they're not aligned. As a result it will be difficult for your business to grow effectively as your teams might be working against each other.
This is what happens when your Product team ships some features that your Marketing team is not prepared to promote. Or when your Marketing team launches a campaign without the support of your Customer Success team.
The OKRs framework helps you flip that thinking around.
Rather than looking at outputs, you focus first on defining the outcomes you want.
By having a clear idea of where you want to be, you will be able to help everyone in your organization understand what they need to do to get there.
Instead of letting your teams decide what direction they should take, you define the North Star that will guide their efforts. By doing so, you ensure that everyone is driving towards the same goals.
It may only take a couple of paragraphs to explain OKRs but flipping the flow Activity → Outcomes is the hardest transition to go through. A common mistake is to think that having a set of goals written on a page is enough to consider yourself outcome-driven. This is only a tiny part of the transformations that need to happen if you want your organization to be truly outcome-driven.
Don't try to tackle everything at once. You should start by setting the foundations of a good goal-setting culture. Then, as you get more practice and experience you'll be able to start sharing ownership of the goal-setting with your team.
Stop doing pointless tasks, start making decisions with purpose