How to set OKRs (Objectives and Key Results) for your teams
It is a common issue in companies to struggle with goal setting. Many don't have clearly defined goals for the organization as a whole. Others make a good job at knowing their direction as an organization, but their teams don't have their goals narrowed down. Another problem is setting very conservative goals. All of these are detrimental to the motivation and productivity of employees and their teams.
There is significant evidence in the scientific literature that suggests that employees are more driven to attain the goals that are set out for them when these are specific and ambitious. Knowing this, Google uses OKRs (Objectives and Key Results) since 1999. What makes OKRs special is that they are designed to set very challenging goals (objectives), with very specific landmarks to achieve along the way (key results). This way, even if teams don't fully accomplish said goals, they are likely to achieve more than they thought would be possible for them.
In order to try to achieve their objectives, teams have no option but to organize themselves properly and prioritize work. It also allows them the opportunity to learn from their mistakes and apply what they've learned in the following OKRs. Setting OKRs can also help teams increase their focus and motivation to accomplish their objectives.
In addition, communication is one of the biggest challenges facing companies, especially big companies. OKRs help solve this problem by letting everyone in the company know what they want to achieve and how they are going to measure the degree to which these goals have been achieved.
Today, many companies, not only Google, use OKRs: some of them include LinkedIn, Twitter, Sears and Intel.
Set 3 to 5 objectives per team
Objectives are where you want to go, what you want to accomplish.
- Objectives should focus on achieving specific advancements.
- Objectives should be challenging, even if teams feel like they cannot accomplish them.
- OKRs are public, so that everyone knows the organization's goals and how success is measured. It also helps transparency, as employees can see what the other teams' goals are.
- OKRs are not a collective list of things to do.
- Occasionally set up "stretch goals", those that appear to be impossible to achieve: these can motivate some of the best employees and, even if they fail, they can lead to great advancements (often referred to as "moonshots").
For examples on how to set OKRs, visit www.okr-examples.com.
Establish 2 to 3 Key Results per objective
Key Results are how you're going to get where you want to go (objectives). They are a way of measuring quantitatively if you're on the right track to achieve your objectives.
- Key results are quantifiable and should be graded with a number (in the case of Google, this number goes from 0 to 1.0).
- Teams should typically achieve 60% – 70% of their OKRs.
- Accomplishing 100% of your OKRs on a consistent basis means that they are not ambitious enough. You should go out of your comfort zone. In some cases, though, achieving 100% of the OKRs is simply due to exceptional performance, not lack of ambition.
- A low grade should not be punished, it should serve as a tool to better define the following OKRs.