Making OKRs work in your business

OKRs, or ‘Objectives and Key Results’ are, by now, a pretty commonly understood concept. 

Teams of all sizes need goals to work towards if they’re going to be impactful and efficient.  In the early days of a start-up, these goals may be pretty informal in nature - little actually written down - but still drive a collective push towards a critical milestone. This informality is enabled by the natural alignment and communication that (usually) exists between founding team members.

But as teams grow, so does the need to formalise goal processes more.  And what better goal process to adopt than OKRs?

A brief history

Though OKRs are often touted as a fairly new concept with adoption still in its infancy (though more widespread in sectors like tech / digital) their ancestry can actually be dated back to the 1970s and the work of John Doerr.  His book ‘Measure what matters’ is a good read when you have time.

Prior to then, the practice of implementing goals and measuring KPIs was widespread across a lot of industries, in particular those that relied on mass production such as automotive.  But those goals were often devised via a hierarchical ‘top down’ route as opposed to the more collaborative approach that makes OKRs so successful.

It wasn’t until the early 2000s and the arrival of Google, though, that the practice of OKRs started to became more widespread. 

Google experienced one of the fastest growth inclines of any business to that point, growing from 50 to over 50,000 team members within ten years (it now employs over 150,000 people).  In that context, the practice of top down goal setting just wouldn’t work – the sheer level of time Managers would have to invest in managing tasks and goals would dent their ability to grow.

So, supported by John Doerr, who was an early advisor to the Google founders, OKRs became a bedrock of the way things were done, and the rest is history.

OKR principles

Before focusing on the process for making OKRs work in your business, it’s important that the base principles of OKRs are understood and, crucially, committed to by the leadership team in your business. 

1. It all starts with culture: OKRs are not simply a process, they’re an intrinsic part of company culture.  Values such as empowerment, collaboration and transparency are vital in ensuring team members across the whole business take full accountability and are not afraid to raise their hand if and when there are risks or issues that could impact progress.

2. Planning is key: the temptation in all busy businesses is to rush straight into delivery, but OKRs are there to drive alignment across teams and ensure things are completed in a methodical manner.  Therefore, the urge to dive in has to be replaced by an unequivocal commitment to planning the specific tasks or steps that need to be completed (what, who and when) that are necessary to achieve the OKR.

3. Stretch, retro and progress: OKRs should operate at two levels – now and future.  Think of them as a virtuous cycle.  Today’s OKR should stretch people to drive results and pace, while also promoting continual development.  Regular retros should then pull out key learnings to then enable tomorrow’s OKR to be even better.

4. Managers should focus on removing blockers: rather than directing and providing all the answers, the role of Managers / Leaders in OKRs is to unleash the wider power that exists within their teams.  Their focus should therefore be on supporting and mentoring their people, and proactively removing any blockers (people, process, technology, etc.) that may arise.

5. Discipline, discipline, discipline: ultimately OKRs are there to drive both high levels of delivery and a continual ‘raising of the bar’ in terms of the capability of your whole team.  All journeys of progress include their bumps and challenges (e.g., unforeseen events getting in the way of focusing on an OKR).  Discipline is key in nudging things back on track if they slip, and instilling clear and consistent standards across the whole organisation.

Five steps to implementing OKRs successfully

Step 1: Manage your transition to OKRs as a major / critical change.

You only really get one chance to implement OKRs successfully.  If the attempt is not well thought through and, ultimately, doesn’t work, the levels of engagement within the team will dip, making a second attempt more difficult.  Therefore, if this is your first time implementing OKRs, it’s definitely worth investing in some expert help – it will pay dividends when you consider the impact of delays and errors that can occur without it.

Contrary to a lot of content on OKRs, there are no defined rules.  OKRs need to be developed to match the culture, the pace of growth and the broader needs of your business.  See it as a major change and invest heavily in planning and team engagement to get everyone on the bus before you move forward.

Particular attention should be given to any and all leaders as they will play a vital role in implementation.

Step 2: Determine your OKR cycles.

Remembering that OKRs are the conduit between your long-term strategy and the day to day work undertaken, they need to be treated as the backbone of your business.  The cycles you determine should act as the beating heart of your business, the disciplined rhythms you instil to plan, deliver, learn and achieve all the components of your strategy and business operations.

When it comes to cycles, there are two levels:

1. The mid to long-term strategic cycle: this is the period of time OKRs are set for, and the regularity in which you conduct formal strategic reviews.  For example, in a traditional business with a five year strategic mission, goals would typically be set for a year, with strategy reviewed as part of business planning processes every 12-months. 

In faster moving companies, a year is a long time.  Therefore, OKRs will typically be set in quarterly cycles, with strategic reviews undertaken every 13-weeks.  This increases the number of triggers / opportunities to review and adjust strategy and priorities from five to 20 within a five-year mission period, almost forcing your to keep on top of external trends that may impact your plan.

(For more information on building strategy, have a read of this article.)

2. The short-term delivery cycle: this is the period of time in which current OKRs are delivered (e.g., a quarter).  If this is a 13-week period, OKRs should not just be set at week 1 and reviewed at week 13.  There are many opportunities to monitor progress and revise plans in that period, so a delivery cycle such as below (but bespoke to your business) should be set in stone.

Step 3: Train goal setting and set your standards: setting great goals and KPIs is a skill set that is still lacking in business.  Remembering that OKRs should be developed in a more collaborative way, it’s important to decide how your OKRs will be set (e.g., by the leadership team, by the functional teams or even cross-functional performance boards or steering groups), and to train everyone, regardless of position, in creating SMART (specific, measurable, achievable, relevant, time-bound) and stretching goals. 

The set of OKRs you set as a team for that delivery cycle should all then be assessed holistically to ensure they are the natural ‘next steps’ towards your longer-term strategy (that is, make sure they are not taking your people off on tangents).

Step 4: No surprises - plan delivery and set your RACI: setting an OKR is the hard part and is often the catalyst for people then diving into delivery.  But, remembering you have a long (e.g.; 13-weeks) delivery cycle ahead of you, which is a long time in a fast moving business, you’re going to want to have clear milestones in place to get that warm and cosy feeling that the OKR(s) will be achieved on time and to the right standard.  Therefore, ensure the natural steps or milestones are planned and captured, with a RACI matrix (see article on RACI) used so there is no doubt about who’s doing what and when. And to make sure there are no nasty surprises!

Step 5: Consider using technology to track: you can track OKRs via a simple Google or Excel doc, but it is well worth investing in either a specialised OKR tool (e.g., Quantive) or broader workflow management software (e.g, monday.com).  This will provide the levels of transparency and discipline that are vital in tracking the progress of OKRs live, but also act as a slick communication and action management medium.  Additionally, the commentary will prove to be a vital source for OKR retros.

In closing, OKRs are one of the most impactful mechanisms for building highly successful companies and teams, and are proven beyond doubt.  However, if not managed properly, they can make things very difficult.  Therefore, it’s vital to manage any transition to OKRs as a major business change and invest the time and money that this warrants.  The dividends are there to be had – pace, standards of delivery and overall team capability growth.

At beating hearts we have supported the implementation of OKRs in numerous businesses from 10 to 3,000+ people.  Drop us a note here to have a no obligation discussion on how they might work in your business.