HR and Ops are no strangers to acronyms but in our opinion some are far more important than others for achieving business success. One such acronym that is on our radar a lot here at StaffCircle is OKR. In this post, we’ll tell you why you should be embracing it (if you aren’t already) and how to make it work effectively for you.
What is an OKR?
Objectives and Key Results (OKR) is a goal management framework to help improve focus and transparency by tasking the workforce to achieve common objectives.
With each OKR, there’s an objective set and up to five key results to measure progress towards it. You can also have initiatives which set out what you’ll do to achieve the key results. The OKRs need to flexible, transparent, measurable and aspirational.
Sounds fairly straightforward but this framework has revolutionalised the way companies like Google work because it helps to move businesses from an output to an outcome-based way of working. This is a particularly effective form of performance management in fast-paced industries, constantly innovating the way they work.
How do you set them?
As mentioned earlier, the OKRs need to flexible, transparent, measurable and aspirational, and because they’re outcome-based, it’s something that leadership should be heavily involved in setting. If everyone’s line manager were to set the OKRs for each individual there would be no alignment and no common goal. If set from the top, then every employee is truly contributing to the growth of the business.
You’ll have noticed that OKRs need to be aspirational. This is a departure from the more familiar performance management measure KPI which asks that goals are achievable. Why aspirational and not achievable? Are we setting employees to fail? Absolutely not. The theory behind it is that you want to push employees out of their comfort zone and stretch them to achieve more. This will help their personnel development, and because they’re common goals for a team and a business, the OKRs are not aren’t linked to compensation, financial rewards or job security so there’s no fall out if the targets are accidentally set too high.
Equally important as who sets them is how you track progress. You need to be able to monitor the performance of your employees and their progress towards the OKRs as often as quarterly. Therefore it’s recommended to hold check-ins even more frequently than that to ensure employees understand the goals, stay on track and have all the support they need to achieve them.
What does a good OKR look like?
To give you an idea of how this could look for your business, here are two examples:
Example 1: Your objective is to become a market leader. The key result for this could be to achieve a market valuation of a set figure. The initiative you could put in place to achieve this could be to appoint a new CMO.
Example 2: You set yourself an objective to increase turnover on last year. The key result for this could be to secure 15 new clients at retained monthly fees of £50,000 each for the latter. The initiative could be to adopt a new pitch process and create a new proposal template.
How do you ensure your OKR is adopted and stuck to?
It comes down to the tools you use. Digitising your company’s performance management processes is so important. If OKRs are not recorded, they’re set and forgotten about. If they’re simply entered on excel, it’s a colossal admin task to maintain. By recording the OKRs on a digital platform that everyone can view whenever they need to, targets and performance stay front of mind.
In fact, with some digital performance management platforms, StaffCircle included, you can monitor performance as often as you like and record it in real-time. You can also capture employee feedback and sentiment to ensure that all staff are as driven to completing the OKRs as management is, and quickly identify any issues that may not make progress possible. You can even move the target if it looks to east to achieve.
Scoring is perhaps the most complicated part of the OKR framework. And it’s made simple if you digitise the process. Either using a scale of 0 to 1 or 0 to 100, a score of 1 or 100 means you’ve hit the target and achieved a goal. A score of 0.8 or 80 while still high, means you’ve made progress but not yet done enough.
Is it really worth adopting?
If the fact that some of the fastest growing businesses of our time use the framework doesn’t sell it to you, then maybe these benefits will. Research has found that employees that use OKR are much more effective at their jobs than those who don’t use it. Also, tying an individual’s performance to the company’s performance makes a significant difference to employee engagement. Staff can see why they’re doing each task, they feel more valuable to the company and the link between management and worker feels stronger.
The case for adopting OKR, in our opinion, is highly compelling. You just need the right tools in place to make it work for you. Get in touch for a free demo today.