Keeping teams focused and motivated through OKRs
Every year organizations define their strategic objectives and deploy them at different levels so that they can define the strategies to achieve them. Likewise, the teams are asked to define their objectives and action plans for the year, which can be group or individual. In this process, it is not always ensured that the objectives and initiatives are aligned with the strategic objectives, or that they have a measurement system that is periodically reviewed.
On the other hand, not all employees know the objectives of the company and therefore they don’t know how their work can impact them. Then, it causes initiatives or issues that do not necessarily give the greatest value to the business to be prioritized.
In order to focus the effort and align the work with the objectives of the organization, I want to talk about a very effective method called OKRs! which is currently used by several companies such as Google, Amazon, Intel, Facebook, LinkedIn, Netflix, Spotify, among others.
This method came from Intel, which was based on Peter Drucker’s MBO (Management By Objectives) model. Later, Google investor Joen Doerr introduced this method to Google’s founders, and the company has been using it ever since.
OKR is a management method to collaboratively set goals in companies, teams and individuals. It is also useful for just about any company, or any person, who wants to create a simple and easy-to-follow system for getting stuff done.
Elements of an OKR
Objective: answers the question What do we want to achieve?
It is inspiring and motivating, it adds value to the business, it is qualitative and easy to remember.
Key Results (KR): they measure the results towards the objective. How do we reach that objective?
They are quantitative, meet SMART criteria, and are aggressive but realistic. They will help us to know the progress towards the objective and if we can achieve it or not.
Initiatives: What will we do to meet the key results?
They are tasks, projects or experiments that must be done to achieve the key results.
It is recommended to have a maximum of 5 objectives and no more than 5 key results per objective.
OKR levels and cadences
There are 3 levels of OKR: Strategic (annual cadence), Tactical and Operational (quarterly cadence).
One consideration to keep in mind is that OKRs are not used to measure employee performance or determine promotions, but they can help to give visibility to the objectives accomplished and how people have generated value for the company.
If you want to know more about this method, you can enter the following Management 3.0 link: https://management30.com/practice/okrs/.
OKRs in practice
Next I will tell you about my experience in the application of this method.
I currently work in an insurance company where we are changing the initiative management model, due to the fact that we have a large volume of initiatives but a limited service capacity, the changing environment and the current situation demand faster actions, and we need to have visibility of how initiatives contribute to company objectives. So, in order to focus the effort on what really generates value, provide transparency and be able to respond to changes in a timely manner, it was decided to implement the OKRs at the organizational level.
I participated to teach and facilitate the implementation of this method to a business unit of the company. The goal was to define OKRs and initiatives at the tactical level.
The steps I followed for its application were:
Preparation
Before putting the OKRs into practice, a presentation was prepared to explain to the team why this method is going to be applied in the organization. It includes the definition of an OKR and some examples, as well as the difference with KPIs and initiatives. Templates were also developed to perform the dynamics. As we work remotely in the company, we use digital tools, one of them is Miro, on which we create the templates to work the OKRs.
We use 2 templates, the first one so that business users can place the objectives, priorities and indicators of their business unit, considering that they are aligned with the strategic objectives. This template would be the input to prepare the OKRs.
The second template was used to place the information of the defined OKRs, the initiatives aligned to these as well as the dependencies.
Several sessions were scheduled to carry out this practice:
Session 1:
The OKR presentation was made for business users to acquire knowledge and clarify their queries and doubts.
Then the dynamics began using the first template, where the information on the objectives and priorities of the team for the year was placed. In this case, it was very useful for the business to have its strategic plan for this year, because it was the main source of information. The objectives set were discussed together and it was identified that some corresponded to key results or initiatives according to the definition of said concepts.
The findings and pending were placed in another column so that they can be taken into consideration for the definition of OKRs that would be worked on in the next session.
Session 2:
In this session, the second template was used, where some objectives and key results were worked together, which were aligned to the strategic objectives of the organization. A lot of debate and exchange of ideas and opinions was generated, since it is not so simple to define OKRs in practice despite knowing the theory, and there are people more willing to change than others. The business was tasked with continuing to define and review its objectives and KR for the next session.
Session 3:
The OKRs that had worked were reviewed together. Some objectives and key results were noted because they were more associated with initiatives, and in other cases, some key results had not been quantified or were not measurable. Some modifications were made and some cases were pending for the team to review later. Additionally, work was carried out on the identification of the initiatives necessary to be able to comply with the key results, and the dependencies they had with other business units were also included, since several of the initiatives cannot be worked by a single area but rather requires joint work with other areas of the company.
Session 4:
Finally, in this session the information worked (objectives, key results, initiatives and dependencies) was reviewed and validated. Some of the defined OKRs are shown below.
Learnings and Recommendations
The main learning that I take from this method is that there is a big difference between knowing the theory and putting it into practice. There are several factors that can influence the success of your application. Here are some relevant factors from my point of view:
- People; Some may be more receptive to learning new methods and believing in their usefulness than others, so the degree of resistance to change in the group where the OKRs will be applied must be taken into account in order to carry out each session adequately.
- The experience of the coach; as it is a method in which the concepts, although they are defined and apparently clear, when in practice you begin to define the objectives, key results and initiatives, many times they can be confused between them, and it is important that the coach can clarify the doubts, give examples and make the participants understand the difference between the concepts so that they can define them properly.
- Organizational commitment; If the OKRs are to be applied at a strategic or tactical level, it is essential to have the commitment and conviction of the organization from top management. I do not recommend applying it because it is fashionable, but rather evaluating the value and impact it will generate for the business.
- Business dominance; It is important that the people who are going to define OKRs have the necessary business knowledge to determine challenging but achievable objectives, and have the information on how their business is currently doing to serve as the basis for key results and initiatives.
As a facilitator of the practice of this method, I recommend making a prior communication, either to the team or to the organization, depending on the level that is applied so that everyone is aligned and in context. I also recommend that the team has evaluated in advance what it wants to achieve in the year, its indicators and action plans. This information will be useful to prepare the OKRs.
To carry out the dynamics, I suggest scheduling more than one session, so that the team can review and analyze what is being defined, and have time to obtain the information that may be missing for the OKRs, for example, current values of indicators used in key results or confirm the values they want to achieve.
Additionally, prior to each session, I recommend preparing an agenda of the steps to be carried out and assigning times to ensure that the planned topics can be covered. Also, if they work remotely, it helps to use collaborative digital tools so that all participants can interact simultaneously and the sessions are more productive.
Conclusions
Finally, I believe that the use of OKRs can be very powerful to align teams to focus on the relevant objectives that will help achieve the organization’s objectives, and in turn inspire the team to achieve them because they are defined collaboratively. OKRs also provide transparency because they are accessible and visible to the people in the organization, and therefore help to identify common goals and initiatives between business units, existing dependencies, and how they can collaborate between teams to achieve the goals.
I share the following phrase that I liked and it is important not to lose sight of it:
“Feel free to change objectives and metrics whenever it makes sense. Your goal is to learn and improve, not to become a slave to your metrics.” (management30.com)
I appreciate your time in reading this article, which I hope can help you when you decide to apply for OKRs. And, even if your company doesn’t use OKRs, they can be helpful in your personal life, or for yourself at work.
I also thank Erick Masgo for his advice and sharing his knowledge of Management 3.0.