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Introducing OKR (Objectives and Key Results)
What is OKR? It is a modern, goal-oriented management system developed at Intel. It gained popularity in the 2000s since being adapted by Google, Microsoft, Apple, Netflix, Adobe, and others, validating OKRs extraordinary influence.
(Look who’s using OKR)
Most companies face headwinds.
Most companies in Taiwan run variations of MBO, KPI, SOPs, or simply top-down management control. Still, they are imperfect, and CEOs are the first to acknowledge some levels of conflict, disorganization, dissatisfaction, or lack of direction. OKR is a major upgrade to predecessor management systems addressing many of these problematic areas.
The OKR Key Advantages:
- Establishes a culture of commitment and accountability
- Keeps teams organized and aligned with company goals
- Gets big things done in a short time
- Teaches discipline
- Emphasizes people-orientation
- Fosters growth and improvement
- Is a management training platform.
OKR Key Concepts
OKR, on the surface, is fairly easy to understand, and it’s not unlike MBO and KPIs. You set your Objectives and define the measurable outcomes (Key Results) along with their due dates to meet those objectives.
However, at a deeper level, OKR has a rich set of tools, concepts, and disciplines that make it a more meaningful and robust application.
Important company goals get done
Alignment and focus
As an organization grows, it’s easy to lose focus on the important company goals. In effect, you get different teams moving in different directions. Schedules don’t line up and nothing gets done.
With OKR, all projects descend from a single point, which is the company’s mission. It helps leadership align and organize projects when teams understand the big picture. They work together to get things done faster.
Shorter planning period keeps projects on track.
When the planning period is annual or semi-annual, it’s easy to lose focus of time and get off track, resulting in project delays.
With OKRs, companies will conduct shorter burst planning at the beginning of each quarter. This means projects are assessed more frequently and adjustments are made on a timely basis. Furthermore, it’s easier to be motivated by goals that are more visible on the near horizon.
Progress-based management
Boosts accountability and reduces meetings.
Frequent progress meetings take up a lot of time in companies. Any time someone has to upend their work and go for a meeting is a significant hit on progress.
With OKRs, Key Results are designed to be measurable, by quantitative number (e.g. Sales Q1). Each Key Result owner maintains progress on a public forum – this keeps individuals motivated to meet objectives and allows managers to review progress at any time without having too many meetings.
Builds a culture of discipline
Company on auto-pilot.
Company culture is linked to how disciplined a company is. Without an established culture, there will be variability in the company, which leads to inefficiency and often dysfunction.
A robust management system like OKR focuses on cadence and culture. Quarterly planning, progress tracking, and self-review by every staff member mean everyone is managing to the same beat. Ultimately, you can trust your staff to reach goals without micromanaging – virtually on auto-pilot.
People Oriented Culture
Inspired and responsible staff.
One of the most challenging managerial questions is how you inspire your staff to do their best every day. Because it’s about human behavior, it’s often avoided, or substituted with pizza day, or snacks at the coffee dispenser.
Aside from all the theories we learned in business school, the common denominator is that people want an opportunity to learn, grow, achieve, and be recognized.
OKR also encourages inclusion at every level. This means top-down, bottom-up collaboration. It means everyone participates in planning, tracking, and reviews, important managerial skills for future promotion.
A culture of growth and improvement
A concept of “stretch” is built into OKR culture – it means to push yourself, take a chance, and always aim higher. If you shoot for the moon and end up on the roof – it’s still progress.
Quarter-end self-reviews are also an important practice that encourages staff to review their recent challenges and reflect on the future – improve on yesterday.
Management Training Platform
Everyone is managing.
Most companies do not provide any management training, leaving new managers struggling to lead teams effectively.
As mentioned, in OKR, everyone participates in planning, tracking, and assessment. Everyone learns commitment and accountability. These are all disciplines that are important for future managerial positions. Anyone participating in OKR is essentially training to be a manager.
OKR Wow Factor – A well-run company!
Running a business is tough. A lot of internal and external factors create headwinds for a CEO. They acknowledge change is needed, but habits and culture become entrenched over the years, and they feel stuck.
It’s no wonder that important companies like Microsoft have adopted OKRs – to avoid headwinds. It really is a pervasive, people-oriented culture that teaches many characteristics of a well-run business: discipline, accountability, commitment, alignment, leadership, and growth. Wow!
Feel free to contact us on how OKR can benefit your company.
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