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OKR Framework

Objectives and Key Results (OKR) is a popular goal setting framework that helps organisations implement a solid strategy.

The goal of OKRs is for every member of the organisation – from the key stakeholders and leaders down to the team members – understand the objectives of the company through a set of defined, specific and measurable actions.

The OKR approach has been used by many multibillion companies like Google, LinkedIn, Amazone, Adobe, etc.

Because of today’s complex nature of organisations, stakeholders often feel lost when they deal with rapid changes in the organisations.

It happens often that strategic goals and plans in the organisation are too sophisticated, unclear, and abstract. Because of that, many employees feel lost, discouraged and have a lack of purpose.

Let´s take a look how we can prevent or improve employees getting a lost and unmotivated.

Background of OKRs

You might have heard that the concept of OKR is not new. The OKR history started in 1954 when Peter Drucker invented Management by Objectives or so called MBO.

In early 1979s it was introduced to the former President of Intel, Andy Grove.

Now, OKRs are gaining popularity not only among big corporations, but also among small organisations as well as start-ups.

OKRs help these organisations achieve their goals in a much shorter period of time and accurately measure progress.

Typically, OKR is made up of 3-5 high-level objectives, which list 3-5 key measurable results. Key Results (KRs) are measurable through a defined set of scores (usually between 0 and 1.0).

The use of these scores allow organisations to check or measure progress.

For your company, you can start adding OKR as a part of quarterly planning and progress review. However, you can also do it on a monthly or annual basis, it depends what are the needs and goals of your organisation.

OKR Benefits

Leadership experts believe that OKR is one of the leading team management practices and goal setting framework that every company should implement.

Why use OKRs? Because it’s easy and simple and it does not take up so much resources to ramp up.

Moreover, it helps sustain the company culture and largely benefits the organisation, particularly employee productivity and performance.

In my opinion, OKR brings two major benefits into organisations:

1. Impact on Your Business

Studies have shown that employees who used OKR tend to be more effective at their jobs, which results to better performance and increased sales.

Moreover, team members who didn’t use OKRs proactively asked to be part of the OKR process in future cycles.

2. Company/Organisation Culture Benefits

One of the major OKR benefits is that it allows an organisation to focus on metrics and KPIs. This makes a cultural shift from output to outcomes.

OKRs also create focus, alignment and transparency within the organisation. When combined, these factors lead to a significant improvement in employee engagement.

OKR Framework Overview

Each element of the OKR framework supports the successful Objective and Key Results implementation, and that´s why it has an important meaning in the overall process.

It is best to use the synergy effects of all elements as shown on the picture below.

Company Mission

The company mission is a brief description of the company’s vision and purpose, and how they should be implemented.

Mid-term Goals

Mid-term goals (so-called MOALS) are the link between the company mission and the OKR. They are usually defined for one year.

OKR Planning

OKR Planning allows the respective objectives and key results become defined for the entire cycle at all levels. This is done both top-down and bottom-up.

OKR Weekly

The OKR Weekly helps to integrate the implementation of the OKR framework and supports the team to be responsible for it during the cycle. The weekly should only take about 15 minutes and should give an overview of the current status of the OKR.

OKR Review

Review meetings are used to determine the degree of achievement at the end of an evaluation cycle. The scoring should be consistent with team standards.

OKR Retrospective

During a retrospective, the teams inspects the OKR process from a systematic point of view. What did the team learn and what should be improved in the next cycle.

OKR Coach

OKR Coaches are responsible for the smooth implementation of the OKR and support their teams in the Definition of OKRs and other events.

The Cycle Of The OKR Framework

Each cycle of the OKR framework has many opportunities for improving teamwork, communication and strategic goals. The following events help:

  • OKR Planning
  • OKR Weekly
  • OKR Review
  • OKR Retrospectives

During the cycle, objectives and key results do not usually change unless the company faces an unexpected and important event to which it must respond.

As this is rare, usually review and retrospective usually show the opportunity for improvement for the next cycle.

The sustainable implementation of the OKR framework within a company takes time. It usually takes about 3-4 cycles to get the full pull from OKR.

A meaningful, well-designed implementation plan can significantly reduce the learning process.

Measures such as in-house trainings, the training of OKR Coaches, orientation workshops, or review and retrospectives increase the learning quality and speed.

It´s important to note: The key is to always stay humble and open for learning and making mistakes!

ORGANISATIONAL MASTERY SCORECARD

We have developed a free assessment in the form of a Scorecard to help you establish which areas of business you need to focus on to achieve your particular Organisational Mastery.

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If you liked this article, feel free to visit my company Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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How Many Objectives Should Your Company Have to Become Efficient?

Companies like Google, Intel and LinkedIn have many things in common. They are all tech giants. They make billions of revenues each year. They are known all over the world. They have thousands of happy employees and millions of satisfied customers.

They know who they are. They do what they do best. They know where they’re headed.

Let´s dive into insights on how many objectives should your company really have to become efficient.

OKR: Giant Companies’ Secret Sauce

The success of these companies can have many reasons. But in his book Measure What Matters”, John Doerr talked about the ‘secret sauce’ all these tech giants have: Objectives and Key Results (OKR).

It isn’t a new concept. It has been around decades ago. And despite the arrival of many other management concepts and leadership principles, OKR as a goal-setting framework remains to be one of the most powerful organisation tools available these days.

OKRs are meant not only for a company to have a clear view of where they want to be or what they want to accomplish in the next few months or quarter.

In essence, it’s a way of running your company to its fullest potential. It creates focus, accountability and prioritisation. It aligns team efforts so that everyone is working on the same goal.

So how do these companies do it? Read more below.

Setting Your Objectives Right

For OKRs to be successful, everything has to start with the objectives. In a nutshell, objectives are simply your goals.

They answer the question “WHAT”. As an executive, you can have a higher-level set of objectives or more specific ones.

CEOs would have broader objectives as their roles encompass many aspects of the organisation while teams and business units may have a more limited scope when setting objectives as theirs would depend mainly on the department or management team that they support.

But regardless of what kind of objectives you need to make, you should make sure that they are clear, concise, and specific.

For example, your run a booking company and your goal for the month is to increase your revenue by 15%.

This is your objective. When setting an objective, you want to challenge yourself and, in a sense, push yourself to your limits by getting a little more ambitious. That’s the essence of OKRs.

You don’t set goals simply to sustain the status quo. You want to be one or two levels higher than where you were a month or a quarter before. As Google puts it, if you’re doing too well, you’re sandbagging it!

OKR – How Many Objectives?

Does this even matter? Wouldn’t it be much better if you can set as many objectives as you can? After all, you have many people to support you. Isn’t it that if you have a lot of objectives, you will have a lot of accomplishments?

Sounds logical. But actually, OKRs don’t work that way.

Limiting the number of objectives between 3 and 5 is the best way. And that’s not simply because it’s the way Google or Intel does it.

First of all, you should know that OKRs are meant for shorter, greater impact goals. Each objective should have a completion date. In most companies, OKRs are created every quarter. For what reasons?

  1. OKRs drive prioritisation.

The main reason why you want to have fewer objectives is because you want to really focus on what matters. You may want to accomplish so many things for your company but without efficient prioritisation, you won’t be able to quickly advance.

The same thing will happen to the teams and individual members of your company. They could be working on so many things just to catch up with their OKRs but there’s a lesser chance that they would be able to get things done at the end of the quarter.

When implementing OKRs, you want to do it slowly but surely. Before the quarter starts, call for a meeting with the key stakeholders. Brainstorm on the most important goals based on your organisational OKRs. Other things can wait in the coming quarter.

  1. OKRs are time-bound.

OKRs are ambitious but they should also be realistic. When setting objectives, take into consideration the timeframe given to your teams or employees.

If you are having quarterly OKRs, then you want your objectives to be something that are achievable in three months.

  1. OKRs are meant to be flexible.

Setting long-term goals are important and should be incorporated into your high-level organisational objectives. That’s why annual OKRs are widely practised.

But quarterly OKRs are inevitable because they are meant to be fluid, not rigid. Thus, when circumstances change and other unexpected things happen, you can easily tweak your objectives to ensure that your team could adapt.

What OKR Pioneers Say Try setting one OKR at a time.

Christina Wodtke, an American businesswoman and OKR expert, claim that companies should just make one objective and key results.

This is a good approach especially if you’re just starting out and still getting familiar with how OKR works. Because there is only one, it is more likely to be high-level. Example:

Objective: Grow my business’ profit by 10%

Key Results:

  1.    Put up a marketing team and hire a new VP by the end of the third quarter.
  2.    Increase monthly revenues by 10%.
  3.    Promote website on social media and increase customer engagement by 50%.
Maximum of 5 Objectives

John Doerr suggests having a maximum of 5 objectives with four key results underneath each one. In his deck presented by Rick Klau of Google Venture, Doerr provided some guidelines when setting OKRs:

  •      Maximum of 5 objectives with 4 key results.
  •      60% + objectives from the bottom up.
  •      No one should dictate. All must mutually agree.
  •      One-page OKR is best. 2 pages maximum
  •      OKRs should not be used as performance measures.
  •      When grading, 60-70% means “GOOD” and 100% means “BAD”.
  •      Continue incomplete KRs only when they are still relevant and useful.

By combining both Wodtke’s and Doerr’s ideas, you can definitely determine the ideal number of objectives that will work for your company. Again, less is more. It drives focus and prioritisation and leads to high-impact results.

Now that you know how to set OKR, let’s find out other aspects of your company’s growth that can be optimised. Check out our Organisational Mastery Quiz – a proprietary quiz that lets you unravel optimisation opportunities for your company. Easy five-minute quiz.

ORGANISATIONAL MASTERY SCORECARD

We have developed a free assessment in the form of a Scorecard to help you establish which areas of business you need to focus on to achieve your particular Organisational Mastery.

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If you liked this article, feel free to visit my company Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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Objective and Key Results Examples

It’s not enough that you have goals for your company. If your numbers are not moving the graphs up, clearly it’s either you’re targeting the wrong goals or the way you set goals isn’t helping you to go the right direction.

The way companies sets goal matters. It may seem trivial but having an ineffective goal setting framework affects many companies like yours in impactful ways.

Another telltale sign that your goal setting method isn’t helping your company to reach its optimal performance is when your departments and teams are uncoordinated while missing deadlines left and right, working on different unrelated projects, and uncertain about the collective directions that you set for your company.

As the leader of your company, if you want to fix this, you have to focus on the heart of the problem – your goal-setting framework. This is where OKR steps in.

Using Objective and Key Results (OKRs) is probably the easiest and most efficient way of setting company goals. Big companies like Google, Intel and Zynga have been using it for a long time. They all recommend this framework to any organisation that wishes to scale up fast and drive promising results in their undertakings.

Right below, you can get some overview of this framework plus objectives and key results examples to help you understand how to write it effectively.

What is Objective and Key Results (OKRs)?

Objectives are statements of a company or individual’s goal for a specific period of time. They answer the question “Where do I want to go?”.

Before writing your objectives, take note of its following characteristics:

  •     It should be exact and specific.
  •     It should be easily understandable.
  •     It must be brief and straight to the point.
  •     It must be tangible.

Key Results bring your company closer to its stated objectives. They are your stepping stone. Completing each key result means being one step closer to your objectives. Below are the key qualities of the most efficient KRs:

  •     They are significant. They’re not just a to-do list. They are results of those small steps taken that make up an objective.
  •     KRs should be easily understood without the need to interpret.
  •     They are time-bound. There’s always a due date for every key result.
  •     KRs are scalable.

Ready “Why use OKRs” for more insights on why OKR benefits will improve your organisation.

OKR Best Practices

Writing down your OKRs for the first time can be challenging. You may have many doubts. Are you doing it right? Are you setting specific goals and key results? Are your OKRs ambitious yet achievable?

OKR at Google – ne of the best OKR practices by Google and many other organisations is writing down 3-5 objectives per level (e.g. per person, per team, or per department).

Going above this limit can be counterproductive as it could cause you or your team to be distracted with so many things to do. OKRs are a great tool for prioritisation.

Since you only get to work on a few objectives per quarter, say for instance, you will be able to allocate your time, efforts and resources properly.

Another best practice when writing OKRs is to use common language that your team understands. Contrary to your company mission and vision, OKRs are specific and measurable. While they are inspirational, they have to be clearly understood by anyone in your team.

If your OKR statements trigger confusion among your employees, you need to revise it.

Objective and Key Results Examples

Check out the following objective and key results examples as a guide to come up with your own:

Example #1

Objective: Lower Attrition Rate by 10%.

Key Results:

  •     Drive engagement among team members through an incentive program.
  •     Facilitate bi-weekly coaching sessions to low performers.
  •     Create an upskilling program for members who want to develop their skills.
Example #2

Objective: Make our customers happy.

Key Results:

  •     Conduct a monthly survey to get customers’ feedback.
  •     Perform a weekly calibration session for QA involving selected team members.
  •     Increase customer retention by 85-95%.
  •     Obtain an NPS score of 9.
Example #3

Objective: Establish a friendly, “family” like Company Culture.

Key Results:

  •     Achieve a 95% score in monthly employee PULSE survey.
  •     Expand employee recognition program.
  •     Launch a monthly Town Hall wherein employees can openly ask managers and leaders about anything and talk about their concerns.
  •     Celebrate small wins and progress each week.
Example #4

Objective: Raise revenues by 20%.

Key Results:

  •     Offer 40% discount for two consecutive weeks.
  •     Join at least 10 mall bazaars this month.
  •     Reduce distribution cost by 15%.
  •     Re-calculate product cost and markup.
Example #5

Objective: Improve the training process.

Key Results:

  •     Put up a dedicated L&D Team.
  •     Centralise training process for all departments and teams.
  •     Create a playbook for the new training process.
  •     Assign an L&D Representative for each department.
Example #6

Objective: Open 25 stores by December 2018

Key Results:

  •     Complete all necessary permits and documents for all 25 locations by February.
  •     Buy materials and start store renovation/construction by March.
  •     Promote stores opening via radio and television until launch.
Example #7

Objective: Hold company-wide retreat in September.

Key Results:

  •     Ensure funding will be properly allocated for the company-wide retreat
  •     Double production by 20% to reach quota that will cover the expenses for the retreat
  •     Hire and train sub-contractors to participate in the production while employees on the retreat
Example #8

Launch company cross-skilling to support seasonal roles.

Key Results:

  •     Identify a pilot group for the cross-skilling experiment.
  •     Create a cross-skilling playbook that can be used by any department or team.
  •     Identify key responsibilities of team leaders and POCs.
  •     Assess scores (QA and productivity) of the cross-skilling pilot group.
Example #9

Objective: Grow the company 4X bigger!

Key Results:

  •     Speed up hiring process without compromising quality.
  •     Hire 100 employees by end of the year.
  •     Hire a new Marketing VP by August.
Example #10

Objective: Improve our SEO

Key Results:

  •     Improve website design. Incorporate relevant tags and backlinks.
  •     Increase website loading speed by 95%.
  •     Invite guest bloggers and hire content writers to regularly update the site.
  •     Assign a dedicated online marketing team to monitor our SEO ranking.
Example #11

Objective: Increase Monthly Newsletter Engagement Rate by 50%.

Key Results:

  •     Revamp the layout of newsletter.
  •     Add more contents that customers will find useful, apart from the regular product updates and special offers.
  •     Feature one interesting article each time.
More Tips to Writing Good OKRs
  •     Get insights from your employees. Their feedback is valuable for you to come up with challenging OKRs that truly make an impact to your company. Hold a meeting that is dedicated for brainstorming OKRs per team.
  •     Pull up your historical data. When setting objectives, you want to look at your company’s historical data. It will guide you in coming up with realistic “stretch” goals and key results, especially when you’re looking to increase numbers such as profits, staffing, and the like.
  •     OKRs is a “bottom-up” process. Empowering employees to make their own OKRs is one of the best ways to drive engagement, get buy-in, and ensure that everyone is working together to achieve the overall goals of the company.
  •     Be clear about your KRs. Use common words that everyone will understand. If anything seems vague, edit or revise it.
  •     Setting goals is a key organisational process. With these objectives and key results examples, you should be able to draft your own in no time!

So are you ready to start working on your OKR? Not so fast! Check out our Organisational Mastery Quiz to uncover other chain balls that are holding your company back. Best five minutes you can spend on your company’s growth.

ORGANISATIONAL MASTERY SCORECARD

We have developed a free assessment in the form of a Scorecard to help you establish which areas of business you need to focus on to achieve your particular Organisational Mastery.

Take The Test

If you liked this article, feel free to visit my company Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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Why use OKRs?

There are many different ways to approach goal setting. However, very few are as effective and impactful than Objective and Key Results (OKRs).

There are two major reasons why OKR remains to be the most popular people management and goal setting framework up until today, despite being a relatively old concept.

First, OKRs are built on two incredibly powerful goal-setting principles: Management by Objectives (MBO) and S.M.A.R.T. Secondly, the OKR process – from goal setting to measuring and tracking are all focused on what matters most to your business: results.

OKRs are widely used in the corporate world these days. If you aren’t adopting this framework yet in your company, here are some reasons that make it more robust and viable than other goal-setting approaches:

OKRs ensure alignment of goals

As your company grows and the organisational structure becomes even more complex, the more challenging it is for leaders like you to ensure alignment.

With OKRs, keeping everyone aligned is not a problem. Another challenge that growing companies encounter is the high possibility of individual goals and priorities overlapping.

Everyone in your company can have their own set of priorities and sometimes, they don’t match that of their leads or managers, and the organisation. OKRs solve this problem through cascading alignment.

In what way?

An important process involved in OKRs is reviewing company goals prior to the beginning of each quarter. During this phase, executives gather to discuss the organisational objectives. In most instances, a maximum of 3-5 objectives are determined, which will then have to be cascaded to departments, teams, and individual employees.

The cascading process is very important because it ensures that everyone is on the right page. Each employee or team is going to work on their individual OKRs while bearing in mind the high-level OKRs set by the leaders and key stakeholders of the company.

Another beauty of OKRs is collaboration. One remarkable component of OKR is that it promotes collaboration company-wide, not just between managers and executives.

Everyone is involved – from the big bosses down to the bottom employees. Each one can access the OKRs of other staff and teams and are encouraged to offer help.

If your company culture is conservative, brace yourself. Major culture shift must be welcomed to adopt this framework.

Furthermore, OKRs encourage bottom-up communication. This is essential in creating buy-in and commitment from employees.

With this framework, employees had to create their own OKRs. They have the freedom to do so and can even include personal goals.

While their OKRs should be discussed with their superior or manager and approved by the same, this approach gives employees an opportunity to actively participate in the goal-setting process.

This greatly drives engagement, boosts their performance, and ultimately, bring positive results to the organisation.

OKRs make goals easier to achieve

In the complex nature of organisational structures, having another complex tool is the last thing that your company needs. OKRs, despite being so powerful, are but a simple concept that is easy to follow and implement.

The Key Results are what makes OKR so effective. The reason is that these OKRs break down the objectives into smaller steps.

KRs are brief statements that are clearly defined, specific, and measurable. Hence, they make it easier for employees and their leads to monitor progress.   

Qualities of Effective OKRs

For best results, Key Results must have the following characteristics.

KRs are specific. Organisations that have successfully used OKRs see to it that they use specific language that is common to all their employees when drafting their objectives.

For example, saying that you want to grow your business as your objective is not enough because it is ambiguous. You have to state your objectives in a precise language. A clearer objective could be “Increase my profits by 50%.”

A successful OKR does not stop there. You still have one question to answer – in what way will you be able to accomplish this goal?

That’s where KRs come in. OKRs should always be measured. For example, if your objective is to increase your profits by 50%, what will be the indicators that you have achieved this goal?

One indicator might be a reduction in your operational cost and distribution cost. Another would be doubling your production. Third indicator could be completing 10 more projects than what you usually do.

From these measures (also called ‘milestones’), you can break down your key results into more specific tasks and strategies.

When cascading OKRs to your team, make sure that your objectives are aligned to company-level goals and that your key results are measurable, specific, and time-bound. In some cases, there will be a need for you to re-adjust your OKRs to suit the company’s ever-changing needs.

OKRs should be relevant. When creating OKRs, you have to determine the most important thing for your company right now. This process is called ‘prioritisation’.

What are the most relevant matters to be handled right now? Are your objectives something that can be put in hold for a later time? Or are they too pressing and urgent to be taken into account as soon as possible.

OKRs are time-bound. Each key result should have a deadline. Whether it’s after a week, two weeks, six weeks, or three months, you have to set a deadline for all your key results.

Setting a timeline instils a sense of urgency and drives your team to focus. All these helps you achieve larger objectives.

In summary. . .

OKR, without a doubt, is among the most helpful frameworks that companies can use today in order to achieve their goals. This framework has two components: objectives and key results.

There are many reasons to use OKRs.

One is that it’s easy to implement. Regardless of the  industry you’re in, company size, and organisational structure, OKR is flexible and can be tweaked to work with different dynamics.

Second, OKRs can help foster collaboration and engagement among your emplhttps://luis-goncalves.com/okrs/oyees, and boost their performance. Because this process has a bottom-up alignment, you can get the buy-in from your employees and ensure their commitment throughout the process.

Third, OKRs make bigger goals easy to achieve by breaking them down into smaller, achievable objectives. Your key results make it possible. By setting specific, scalable and time-bound indicators, you can greatly achieve your goals.

ORGANISATIONAL MASTERY SCORECARD

We have developed a free assessment in the form of a Scorecard to help you establish which areas of business you need to focus on to achieve your particular Organisational Mastery.

Take The Test

If you liked this article, feel free to visit my company Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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Which companies use OKR? When it comes to OKRs, the name Google is almost inseparable. Well, that’s because they are one of the pioneering companies that adopted OKR.

OKR at Google. When John Doerr worked at Google, he brought the concept which originated from Intel to the company. Since then, OKR has become a major component of the company’s success.

From a team of 30 people to now a giant tech corporation with over 70,000 employees, Google is one of the hallmarks of OKR as an organisational goal-setting methodology.

But apart from Google, are there other companies that use it? Is OKR something that any type of business can use? Is it currently the best goal-setting approach?

Let’s take a look at which companies use OKR apart from Google and learn from their best practices.

Amazon

Who doesn’t know Amazon? Despite the surge of competitors like Buy (BBY) Family Dollar, and Walmart (WMT), it remains to be the biggest electronic commerce and cloud computing businesses in the world today. Used by millions of people worldwide, the company is clear on its goals: make selling and buying fast, cheap, and easy.

Amazon is among the huge companies that heavily rely on Objective and Key Results (OKRs) as their primary goal-setting approach. For a big company such as them, there’s always a chance of miscommunication, mismatched expectations, confusions, and employees being pulled in too many directions.

OKRs are a very systematic methodology that ensures everyone in the organisation is aligned. It gives people a clear direction of where the company is headed, and how their roles can contribute to its success.

Another beauty of OKRs, according to Jeff Bezos, CEO of Amazon, is that they allow companies to separate things that remain constant (also called validated strategies) from the experiments.

Adobe

Adobe Systems Inc is an American multinational computer software company which is focused on creating multimedia and creativity software products that we use today, such as the Acrobat Reader, Portable Document Format (PDF), and the Creative Suite/Photoshop.

Part of Adobe’s success in people management is the adoption of OKRs and its principles, one of which is listening to employees for feedback. The company used to adopt the “rank and yank” system wherein managers had to identify their least productive team members through a yearly evaluation.

It’s a tedious task – lots of paperwork and dreaded discussions. Each year, the system was causing so much resentment and infighting that forced some employees to quit their job and join a competitor.

After crowdsourcing ideas from their employees, the “rank and yank” system was replaced by a system called “Check In”. Instead of delivering the bad news, managers happily inform their teams who their best employees are and give them rewards in the form of bonuses and incentives.

OKRs took a big part of this system because it helps managers easily measure performance. While it’s not meant to ‘grade’ employees, managers can easily access their employees’ OKRs and assess their progress from there.

LinkedIn

Perhaps the biggest social networking platform for businesses and professionals, LinkedIn is a business and employment-oriented service with over 500 million members worldwide.

Ranked as the 34th most popular website by Alexa, LinkedIn is indeed one of the most successful companies in the industry.

According to Jeff Weiner, CEO of LinkedIn, their company uses OKRs to create urgency. Through OKRs, an organisation can focus on what is more important at the current situation, or in most cases, in the present quarter.

These goals are something you want to accomplish over a specific period of time through a “stretch goal”. Weiner also uses OKRs to run efficient and effective meetings wherein they focus on the status of everyone’s objectives, particularly the “wins” that take the company closer towards their goals.

Microsoft

Founded in 1975 by Bill Gates and Paul Allen, Microsoft is a solid brand when it comes to anything computer programming-related.

Gates recommend OKRs for anyone who wants to become a better manager. He claims that it has a big influence on his own management style.

His organisation executes more efficiently and achieve better results through this goal-setting method. OKRs allow them to measure what matters and can get everyone working on the same page.

Twitter

Created in 2006, this social networking service has rapidly gained popularity in the world. Used by over 100 million users, Twitter is a highly active platform, with 340 million tweets posted a day.

It also became the largest source of breaking news, which was very evident during the 2016 US Elections wherein over 40 million election-related tweets were posted during that day.

For Twitter, OKRs aren’t just used to measure progress. More importantly, it is used as a communication vehicle that allows everyone to see and understand what everybody else is working on.

It is important for Twitter employees to look at their colleague’s OKRs and talk about them in order to promote collaboration.

Zynga

Zynga is an American social game development company founded in 2007. While too many companies focus on mobile gaming, Zynga operates on social media platforms like Facebook.

CEO Mark Pincus tweaked their OKR system in such way that they adopt a weekly approach to it.

He asks everyone to write down what their OKRs for the week are and check every Friday how they did against their objectives. Calling it individual “roadmaps”, Pincus said their OKRs are a great way to help people stay on track and keeps everybody focused.

Introducing OKRs to Your Team

OKR is not a complicated framework. In fact, it is one of the simplest tools that any company can adhere to.

This management concept embraces the concept of setting specific and clear goals that are measured through specific, time-bound key results.

These and many other companies have proven that OKRs can fuel growth, team performance, and success in many ways.

These include fostering collaboration through two-way communication, asking employees’ feedback, focusing on what matters (setting priorities right), measuring success through key results, and building a culture of accountability.

If this is something that you want for your company, take our Organisational Mastery Quiz to uncover the chain balls that hold your company from performing at its best. It’s free and won’t take you five minutes.

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If you liked this article, feel free to visit my company Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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OKR Cheat Sheet

One of the most widely acclaimed goal-setting methodologies used today is Objective and Key Results (OKR). You probably have heard of it many times, and already got a clear understanding of what it’s like and how it can benefit your company.

You’ve been really wanting to adopt this approach. However, you are somehow clueless where to start. How do you cascade the process to your teams? How do you ensure that each team creates a set of objectives and Key Results aligned with the mission and vision of your company? How often should you do OKRs? And more importantly, how are you going to measure your success?

Those are really tricky questions. Fortunately, in this OKR cheat sheet, you are about to begin your OKR journey fast and easy. We’ve condensed every article I’ve published in this blog that talks about implementing OKR into this article. Let’s dive in.

Setting Goals/Objectives

OKR was introduced by Andy Grove – one of the founders of Intel. A venture capitalist from the same company, John Doerr, later on introduced it to Google when he became part of it. Since then, this popular approach has been widely adopted not only by Google but also other tech giants, including Amazon, LinkedIn and Spotify.

But regardless of what industry your company is in, the rules that apply to other company’s OKRs are pretty much the same with what can apply to your company. Whether you’re in the retail sector, manufacturing, or tech – OKRs are a great way to ensure that you are setting challenging yet achievable goals that really make an impact.

When setting objectives, bear the following things in mind:

  1. Your objectives must be qualitative.
  2. Use common language and vocabulary. You want to get your people inspired and excited. Unlike your company mission and vision statements, your OKRs must never be ambiguous as it is designed to give a clear direction to your employees about what they need to accomplish.
  3. You must only have 3-5 objectives. Remember that OKRs are renewed on a quarterly, yearly or monthly basis. You want to focus on the most important goals that are time-bound.

Tool to Use: EISENHOWER IDEA Criteria for Goal-Setting

To make writing down your objectives easy, follow the Eisenhower approach. According to this idea, OKRs should be:

INSPIRING – Bold, visionary and eloquent that motivates your people to move forward.

DIFFICULT – Goals must be stretched and far from the status quo. When reaching that goal feels uncomfortable, you are doing the right thing.

EXPLICIT – Objectives are clear, brief and easy to understand. Even outsiders should be able to comprehend the OKRs you’ve set for your organisation.

ACHIEVABLE – Even if it’s difficult, your objectives must be achievable or nearly accomplished.

Note: Do not set goals that simply reflect your expectations or simply reiterate the daily course of your business.

Writing Key Results

Your KRs should explain how you are going to reach your objectives. Keep in mind that only results matter for each milestone. Your KRs shouldn’t be too focused on a potential solution. Neither should it be a plain list of tasks.

Tool to use: S.M.A.R.T. Approach

You are probably very much familiar with this tool. It is also used in OKRs, particularly in setting key results:

SPECIFIC – there shouldn’t be a need for your employees to interpret your KRs. It should be self-explanatory.

MEASURABLE – KRs SHOULD be measurable. There must be a quantitative indicator of success. Ex: 0-1.00 as used in Google – check OKR at google article

REALISTIC – Even though it’s difficult, it can be done with the team’s continued efforts and resources.

TIME-RELATED – Each key result must have a specific due date.

Cascading OKR Cheat Sheet

Aligning everyone in your company with your organisational OKRs is probably the toughest part. But this is also the most necessary because it’s what drives your company and your people to success.

  1. Two weeks before the quarter is finished, everyone should already know which OKRs they’ve hit. Only then can you proceed to write another set of OKRs for the next quarter.
  2. The senior management team should take the lead. They must set their OKRs in the quickest way possible so that the teams under them will have time to react.
  3. Each business unit in your company should also have their OKRs. Under them are service groups or work groups that should set their OKRs based on their respective business units.
  4. Put everything in black and white. Have a playbook or something similar. On your first implementation of OKR, have this process cascaded to everyone in your company.
Evaluating & Tracking OKRs

OKRs must be reviewed on a regular basis, usually weekly or bi-weekly. It should also be accessible to anyone in your company. This promotes transparency and sense of accountability.

  1. Use a single grading system. Google uses a 0.0–1.0 scale. You can use words like “Done” or “Not Done”, whatever you prefer. Some companies even use symbols like a “traffic light” or “smileys”.
  2. Use a tool that addresses your need. You can go with free ones like Google Docs and Sheets or other paid tools. There are various OKR software systems available in the market today. It is ideal to make use of a single, well-rounded tool that can be utilised by all your employees. However, you can also combine separate tools to suit your needs.
  3. Set time for an in-depth assessment of each key result to further improve productivity and collaboration.

Setting OKRs and implementing them should be easier for your company with the help of this OKR tools. It can be challenging to start a new process and introduce them to your team at first. But with proper preparation and planning, you definitely will go a long way.

Want to know more about how you can improve your company’s performance? Take our Organisational Mastery Quiz! Won’t take you 5mins!

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We have developed a free assessment in the form of a Scorecard to help you establish which areas of business you need to focus on to achieve your particular Organisational Mastery.

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If you liked this article, feel free to visit my company Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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For years, Google has made headlines for being a key leader in so many things – innovation, revenues, growth and expansion, people management, and leadership. There’s no wonder why so many people love to seek work opportunities at Google, thinking that by the time they leave the company and start a tech business on their own, they would be able to manage their own companies like Google does.

Google is not only known for its innovative products and services. The company is also known for their work practices. Speaking of which, one of the most popular management frameworks that Google use is the Objectives and Key Results (OKR).

It’s a goal-setting methodology that has played a key role in the company’s rapid success. In fact, when it was introduced to the company by John Doerr, Google has only about 30 employees. The company was really small and new. In addition to these brilliant employees, they had nothing but ambitious dreams.

Larry Page, the CEO of Google, used this powerful tool to support his goal of growing the company 10X. That was a highly ambitious goal, almost impossible to achieve. But through OKR, the company was able to find its path towards their ultimate goal, and even exceeded it!

So how does OKR work? Learning how Google sets OKRs is one of the best things you can do to drive growth, productivity, and engagement in your company.

But before that, let’s have a quick discussion about OKRs.

OKR stands for Objectives and Key Results. Objectives basically state the “WHAT” – the goal of the company or where it is headed. Under each objective is a set of key results which basically determine whether the company has achieved its objectives or not.

The key results must be specific and scalable. They shouldn’t be misconstrued as “tasks”. They aren’t simply a “to do” list that talks about what a company, team or person has to do. Rather, they should be the results of these smaller tasks.

How to Set OKR Like Google

Google believes that the power of OKRs is far-reaching and transformative. And more importantly, they help improve performance.

Check out these tips in order for you to set OKR like Google:

Limit your objectives.

Having too many objectives is counterintuitive. You don’t want to spread yourself thin. It hinders your team from focusing and keeps your employees distracted. In Google, each employee – from the CEO down to the level-one employees, objectives don’t go above 5 items. There should also be a maximum of four key results under each objective.

OKRs need to be measurable.

It is very important that your OKRs are measurable. In Google, OKRs are graded using the scale of 0-1. However, getting a perfect “1” is not the goal. In fact, if you get this score, you’re not nailing it. At Google, it means you are setting goals that are too easy. You’re just sandbagging it.

The best score would be between 0.6 to 0.7. When setting goal, Google encourages teams to go out of their comfort zone. If achieving such objectives make you feel a little uneasy, you are on the right track.

OKRs have to be visible.

One of the key features of OKRs is that they drive transparency and accountability. More importantly, they drive collaboration between teams. At Google, everyone knows what everybody’s OKRs are. They can access it anytime through a centralised database. Even bottom team members can see what Larry Page is working on, and vice versa. This way, teams and individual employees will know what help to offer and when.

50% of organisational objectives need to come from bottom-up.

In Google, managers don’t tell their members what to do. The company believes that giving employees accountability on their contributions drives engagement. Google has a unique and effective hiring process that lets them choose the best, smartest people. Being confident in their capabilities, Google believes that employees have different perspectives on what the business needs. OKR-setting in Google is multi-directional and puts more emphasis on employees’ feedback.

OKRs can be personal.

Your OKRs may not be purely reflective of the organisational goals. Especially when it comes to team-member levels, managers encourage their employees to set a goal for themselves, whether it’s adopting a new time management habit or pursuing their passion.

They should benefit your employees.

There’s no doubt that OKRs bring tremendous OKR benefits to your organisation as a whole. However, it should also help your employees. This framework encourages discipline by encouraging people to set challenging goals and work hard to achieve them. It teaches them to focus and get less distracted when working on their goals.

Managers need to work closely with their team members.

In Google, managers conduct 1-on-1 coaching sessions or check-ins with their team members not only to monitor their progress but also to guide them. Through coaching sessions, both the manager and the member can openly discuss what the latter wants to do and what the company wants him to do. This also ensures alignment.

OKRs are not performance measures.

OKRs are not scorecards that can be used as the basis for a salary increase or promotion. While OKRs help managers assess how much an employee contributes to the overall goal of the company, they should not be used as performance measures. However, OKRs can be used as a basis for recognition. This drives even more engagement as employees would feel appreciated for their hard work.

OKRs need to be cascaded properly.

Cascade OKRs by mapping them across organisational teams and structures. As the leader, you want to make sure that each of your teams and business units has the competencies and resources they need to achieve their objectives.

Google aligns their employees with the organisational goals through the SMART model. It is important for managers to guide their members, in the form of coaching and in-depth training, in order to set them up for success.

Are you ready to take your company to the next level? Be sure to follow these best practices from Google. For more insights, check out the Google OKR video that was watched over 250,000 times!

That was way beyond what’s considered ‘viral’ in business videos. Also, don’t forget to take our Organisational Mastery Quiz to further uncover the areas that you can improve to help your teams perform at their very best.

ORGANISATIONAL MASTERY SCORECARD

We have developed a free assessment in the form of a Scorecard to help you establish which areas of business you need to focus on to achieve your particular Organisational Mastery.

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If you liked this article, feel free to visit my company´s Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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Understanding the OKR Basics

In his new book entitled Measure What Matters, American Investor and venture capitalist John Doerr talks about how focusing on the objectives and key results (OKR) can significantly boost the performance of any team.

Doerr studied electrical engineering. He joined Intel in 1974 and later moved to a venture capital firm. He made a fortune by investing on Amazon, Google, Symantec and Intuit.

Doerr has been one of the great minds behind the continued success of Google. In 1999, he made a whopping £11.8m-investment in exchange for a 12% stake at the company. He made such a huge investment after feeling impressed by the drive and passion of Google’s co-founders – Larry Page and Sergey Brin.

While they were really good at the industry they’ve chosen, Doerr knew Page and Brin lacked management experience. In an effort to steer the growth of Google, he gathered all employees of people – composed of 30 strong-minded individuals – and presented a pitch about a management tool that has become widely popular since then: Objectives & Key Results.

In his book, Doerr described how OKRs, combined with the company’s Larry Page’s ambitious goal of going 10X bigger, transformed Google. There were also insights and contributions from some of the most successful people in the business world, such as Bill Gates and Susan Wojcick (CEO of YouTube). Each of them shared how OKR helped transform their companies and empowered their people.

If any of these companies and business leaders inspire you and would like to emulate their achievements through your company, you’re in for a treat. The discussion below showcases the potential impact of OKR to your company.

OKR Basics: Eliminating Fuzzy Thinking

Doerr defines OKRs as a collaborative OKR approach to goal-setting. It can be applied to your company as a whole, in teams, and even in individual level.  However, he notes that OKRs are not a miraculous fix.

OKR cannot replace your sound judgement, strong leadership, and workplace culture in your company. OKRs can be used to guide your company to strengthen further these corporate fundamentals and guide you towards growth and success.

OKR as a Survival Tool

According to Doerr, OKRs are a survival tool that smaller start-ups can benefit from in order to guide their company in the same direction. In the tech industry, in particular, new companies must be able to move and grow fast before they lose money on capital.

Having a structured set of goals give companies like yours a “yardstick” for success. OKRs are specific and give them a clear vision of the path they want to take.

Medium-sized companies that are rapidly scaling can greatly benefit from OKRs too. Through OKRs, individuals can easily clarify expectations. They are able to answer important questions, such as what they need to do to get things done fast, who will work on it, and how to keep your employees aligned with your company goals.

In large companies, Doerr points out that OKRs serve as a neon-lit road sign. This framework helps eliminate barriers and nourish connections between teams, departments, and individual contributors. Furthermore, OKRS keep even the most successful companies achieve more by encouraging “stretch goals”.

Quality Over Quantity

Another OKR basic is the principle that quality is more significant than quantity. Thus, setting fewer goals in a specific time period is much better and highly encouraged than setting many goals. The ideal number of objectives is between 3 and 5. According to Doerr, having too many objectives can just distract people from focusing on the most important things.

It was a problem experienced by MyFitnessPal – a successful health and fitness app. Before they implemented OKRs, they were used to setting too many goals. They were trying to get a lot of things done that they had a hard time prioritising. When they started setting fewer OKRs, they were able to focus on things that create more impact.

Scaling As Fundamentals to OKRs

Simply writing down your goals, say for a quarter, already increases your chance of achieving them. And by monitoring its progress and sharing it with your department heads, you even have more odds of succeeding. This is what OKRs are about.

In fact, in one study, it was found that people who recorded their goals, tracked them on a weekly basis and reported their progress to a friend were 43% more likely to achieve their objectives than those who simply thought about their goals and didn’t share them.

OKRs was first used in the 1970s by Intel. It has since been applied by many organisations and even the government of the United States (when it made its stretch goal of setting foot on the moon). With OKRs in place, managers became mentors and coaches. There began a more emphasis on data than assumptions.

Undoubtedly, OKRS are highly effective, proven tool that drives companies to excellence. And if it worked for Google, Intel and other companies, it will work for your team too!

Eliminating Hierarchy

Another interesting Objective and Key Results concept is the abandonment of organisational hierarchy. Most companies follow the “rule of 7” wherein managers are limited to a maximum of 7 team members. However, the fewer the ratio of manager and direct reports, the more hierarchical the organisation becomes.

Having more team members allow for a flatter organisational chart, greater frontline autonomy, and a better environment for creative collaboration that all lead to the next company breakthrough.

Setting Ambitious Goals

Larry Page was very ambitious with his goal of growing Google by tenfold. But with the use of OKRs, he and his team were able to set challenging yet achievable objectives, and measurable key results that led to the realisation of their ultimate goal.

One great example of innovation powered by OKR is the Gmail. The major problem with earlier web-based emailing systems was that they had very low storage. The ability to archive data was just out of the picture. During the development of Gmail, the developers thought about doing an enormous upgrade, with the goal of offering 100MB of storage per user.

By 2004, Google didn’t offer 100MB of storage. Rather, they provided a full 1GB! That’s more like 500 times that of their competitors. That changed the digital communication industry. Google made another historic mark.

All these lessons from Google may not sound replicable but the OKR framework can help your company stretch these limitations that you feel. Remember that it’s designed to keep pushing your teams forward. You may not land on the moon anytime sooner but if you’re breaking all the company performance records, it’s kinda like landing on the moon already : )

If you want to know more about this type of strategies and framework in optimising your company performance, we created an Organisational Mastery Quiz to unravel aspects of your company performance that can still be improved beyond your expectations. It’s less than 5 minutes to answer all the questions.

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We have developed a free assessment in the form of a Scorecard to help you establish which areas of business you need to focus on to achieve your particular Organisational Mastery.

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If you liked this article, feel free to visit my company´s Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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Objective and Key Results Implementation – to be able to effectively implement Objectives and Key Results (OKRs), it is important to understand how this whole process starts.

The following diagram demonstrates how your organisational vision is connected to every team and individual contributors in your team, from the annual down to the quarterly OKRs.

Vision

Mission Statement

Long-Term Goals

Short-Term Goals (done every year)

Objectives and Key Results (done every quarter)

Why Your Company Vision Matters

One of the reasons why OKRs are very popular these days is that they are focused on execution. A lot of other goal-setting framework help organisations define the “WHAT” but do not help answer the “HOW” which basically talks about how the objectives or goals will be achieved. But for the organisation to get started working on its goals, they should first determine the “WHY”.

It is essential for every team member to understand the purpose behind every company initiatives, processes, and actions. When a company is able to identify what they are doing, why they are doing it, and how they should execute their roles, they are able to achieve transparency. More importantly, they become truly aware of what success really is and how they can achieve it.

How to Define a Company Vision

As the leader who has to set your company OKRs, you will have to begin by thinking about the “end” in mind. Like how you see your company a few years from now.

The way you set your goals should be guided by what your company vision is. Your company vision must be easily stated in one sentence. It should describe what your organisation aspires to be. It’s basically your company’s ultimate dream – the end result of all your efforts.

Often, company vision statements are mistaken for a company tagline. While a vision can sound witty and unforgettable, it is meant for your team and culture. It is not meant to sell products. Thus, it is not needed that you create a vision statement that is appealing to everyone. Rather, it should be huge and ambitious.

Sure, it might take years for your organisation to achieve such vision. It is not easy, but it’s the driving force that pushes you and your employees to work hard each day.

How to Define a Company Mission Statement

Part of objective and key results implementation is defining the mission statement of the company. You might wonder – how does your vision translate into your mission statement? What is the difference between these two? Basically, your vision describes the end result of everything you do – your efforts.

But your mission statement lays out the reason for why your company exists. Your mission statement is where you plan how your products or services will take you to realise your company vision.

For a better view, let’s make Walt Disney Company as an example. Their vision statement is “TO MAKE PEOPLE HAPPY”.

But how will they be able to make people happy? Their mission answers the question. Their mission statement is to be the world’s leading producers and providers of entertainment. They will do it through their unique brand, content, services, consumer products, and innovative experiences.

When creating your company vision and mission statement, consider these tips and suggestions:

  •        Determine the things you are really passionate about. What do you envision yourself at the end of this journey? By answering this question, you should be able to start your vision statement.
  •         Think about your skills, experience, talent, and resources. Using these things, what can you contribute to the world?
  •         Next, determine the main economic denominator that is essential for your company. Understand what drives your economic engine.
How to Strategically Plan for Your OKRs

Creating your company vision and mission statement is one thing. Achieving them is another. Using the “Hedgehog Concept”, you can achieve your mission statement through the following ways:

  1. Focusing on what you are passionate about. This should help you really focus your efforts on developing a product or service that you want to offer to your target market. Strategies like market research can guide your company in identifying industry benchmarks and developing ways to ensure that your products fit your market.
  2. Focusing on what you do best. You also want to dig deeper into the current resources of your company. That includes the skills, knowledge, and experience of your employees. You have to know your organisation, so you will determine what it’s best at. It gives you an opportunity to establish efficient internal processes and strategies to achieve your company vision.
  3. It is also vital that you identify the economic metrics of your success. How much money should you have earned in order to say that you succeeded?

Many organisations make use of strategic planning systems that allow them to focus on the goals they set under each category. However, these tools are not made to replace OKR as your goal setting strategy. They should be considered as a “stepping stone” in your objective and key results implementation.

Annual OKRS

In some companies, annual goals are created through OKRs. It is a common practice to break down these annual OKRs further into quarterly OKRS to allow team members to focus on the execution. Take note that organisation OKRs are aspirations. In general, the key results of your company will show the main metrics that the leadership team supervises and held accountable for.

Nonetheless, many organisations commit the mistake of interchanging “tasks” with “key results”. Many people think that these two are just the same. However, they are not. Tasks are tasks – activities that employees have to do as part of their roles. Key results are indicators of success. Achieving them means achieving your objectives.

OKRs does not promote micromanaging of teams. It basically provides a framework that helps organisation determine what constitutes success, and what teams and individuals need to do to figure out how to get through their goals.

An important thing to remember when implementing objective and key results (OKRs) is that the high-level key results are assigned either to the CEO or the leadership team, or a specific department/team.

If OKRs are too narrow from the top, by the time they have been cascaded to the team members, individual contributors might end up having a to-do-list and not OKRs, and thus, will be less empowered to set their own goals.

ORGANISATIONAL MASTERY SCORECARD

We have developed a free assessment in the form of a Scorecard to help you establish which areas of business you need to focus on to achieve your particular Organisational Mastery.

Take The Test

If you liked this article, feel free to visit my company´s Products and Services pages. We provide Team CoachingAgile Training and Agile ConsultingOKR Training and OKR ConsultingInnovation Training and Innovation Consulting.

With my team, I built 5 main products: High Performing TeamsScrum Team CoachScrum Master MentoringOrganisational Mastery and the External Business Accelerator.

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The post The Basic Tenets of Objective and Key Results Implementation appeared first on Luís Gonçalves.

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