You’ve heard of KPIs, but what do you know about OKRs and how your organisation can benefit from them when aligned with the strategic goals of the business? We’ll start by defining what an OKR is and how it differs from a KPI.
What is an OKR?
Let’s get the acronym housekeeping out of the way; OKR stands for Objectives and Key Results. Every orgnisation has goals and objectives it wants to achieve—specific, measurable results that it hopes to reach and maintain as the organisation grows. When an organisation creates a set of business objectives, it focusses on specifics. This means analysing, assessing, and understanding where they are now and where they want to be in the future.
While KPIs are used to evaluate performance over time with a measurable and quantitative result for an organisation, individual or project, OKRs are the living, breathing strategic framework within which a KPI exists. They provide the structure that channels the activity needed to accomplish prioritised objectives. With both qualitative and quantitative elements serving as the foundation of OKRs, the objectives are always aspirational and qualitative while the key results are always quantitative, with a numerical indicator marking the achievement of the result. There are no limits to the number of key results an organisation can use to benchmark the success of an objective, as in the example below, but as a rule, five or less is a manageable number without risking loss of control.
In this example we can clearly see that the objective is aspirational and qualitative while the key results all point to numerical success outcomes to round out the OKR. Notwithstanding the importance of setting organisational OKRs, they can also be broken down into departmental or team objectives to provide key results for specific projects and initiatives that can benefit from their focus.
What are the benefits of OKRs?
The benefits reaped by the continual setting and achievement of OKRs is exponential. OKRs keep everyone honest. They cut out the noise by linking every executive, every team to agreed outcomes—that’s what they do, and they don’t do anything else. It’s about the big rocks versus the pebbles versus the sand. OKRs focus on the rocks.
Without OKRs, businesses lack a cohesive strategy that would otherwise enable them to thrive and continually grow. In fact, prior to its implementation of OKRs in the 1990s, Google was only in its start-up phase. With the implementation of a cohesive strategy for setting and measuring qualitative OKRs at company, team, and individual levels, Google was able to achieve the success it enjoys today.
When OKRs are properly set up and adhered to with buy in from the top down, they can align stakeholders to corporate goals, lend clear direction to teams, track ongoing progress toward project and company goals and help PMO leaders and PMs make informed decisions.
How do you keep OKRs focused on strategic goals?
Now that you know the benefits of OKRs, the question remains: How do you ensure your OKRs are aligned with the strategic goals of the organisation? First, you need to determine how you would like to adopt the process. Because much of the implementation and ongoing maintenance is reliant on change management and people management, you must ensure that you initially identify and train a core team on the responsibilities of the actions at hand and then start identifying your first key results and milestones that directly align with strategic goals of the business.
Once you’ve measured that success and reiterated what you’ve learned, you can start to build out more teams with new OKRs that will facilitate the path to a collective understanding of and commitment to the achievement of key business goals. It’s important to note that if you don’t measure it, you can’t change it. So, adhere to the purpose of an OKR by understanding what success will look like and how it will be measured from the outset so that individuals and teams can keep moving towards them and working through them, even in times of uncertainty and ambiguity.
OKRs are a goal-setting framework used by individuals, teams, and organisations to define measurable goals and track their outcomes. When an organisation creates a set of business objectives, it focuses on analysing, assessing, and understanding where they are now and where they want to be in the future.
When OKRs are properly set up and adhered to, they can align stakeholders to corporate goals, lend clear direction to teams, track ongoing progress toward project and company goals and help PMO leaders and PMs make informed decisions.
To keep OKRs focussed on strategic goals, an organisation must ensure core team members are identified and trained on the responsibilities of the actions at hand and then start identifying key results and milestones that directly align with the strategic goals of the business.
Organisations must remember that if you don’t measure it, you can’t change it, so it’s important to adhere to the purpose of an OKR by understanding what success will look like and how it will be measured from the outset.
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