If you’re an entrepreneur, you may have heard of the OKR goal-setting framework. Pioneered by Intel in the 1990s, OKR stands for objectives and key results and has led many businesses to success, including Google, Twitter, Spotify, LinkedIn, Walmart, Airbnb, and ING Bank.
While OKRs do not guarantee success, they are a useful tool to help companies identify priorities and successfully work towards goals. Here are six tips that will help you plan and execute objectives and key results for your business, whether you’re a freelancer or a start-up company with employees.
1. Identify Where You Need to Change
In order to set goals, you must first identify where you need to change. Take a look at your business and answer questions such as:
- Where does your business need to grow?
- Where do you want to be next year, or in five years, or ten?
- What challenges do you need to overcome?
As you identify areas where change needs to occur, goals and objectives will start to take shape.
2. Choose Your Objective
The first part of the OKR framework is the O for objective. Once you’ve identified some changes you’d like to make happen, choose an objective that embraces one or more of those changes. The objective is the essence of what you want to achieve; the big, overarching goal all your efforts will serve.
Ideally, this big, overarching goal will be something that inspires, motivates, and stretches you and everyone else at your company. It should also be simple and attainable.
For example, in 2018, the city of Syracuse, NY, set an objective to “achieve fiscal sustainability.” This kind of objective is motivational, yet presumably realistic. Other examples of good objectives might include becoming a top contender in your area’s industry, creating an ideal customer experience, or offering a top-tier product.
3. Determine Your Best Key Results
While your objective describes what you want to achieve, key results identify how you are going to achieve it. The simplest OKR structure is the statement “I will (objective) as measured by (key results).” At the end of the day, key results describe what your objective looks like in practice and serve as smaller goals that you can actively work on.
In order to maximize your chances of success, you should have at least two and no more than five key indicators per objective. Your key indicators should also be measurable. While the objective is qualitative, key results are quantitative. The best key results often involve numbers and set time periods, thereby giving you a way to measure progress and an indication of when you’ll be done.
For instance, in their quest to achieve fiscal sustainability, Syracuse, NY, determined that one of their key results would be to “Spend 95% of authorized capital project dollars by the end of the fiscal year.” This is a specific, concrete, quantifiable goal with a set time limit.
Your business can follow this example. If your objective is to become a top contender in your area’s industry, your key results might involve reaching the first page of Google search results within a given time period, beating your competitor’s top sales figures from the previous year, or getting the best customer service ratings in your town in a given month.
4. Align Your Plans
If your business involves multiple employees or teams, be sure to get everyone on the same page as you work on your OKRs. Be transparent with your goals and describe what everyone in the company can do to help achieve them.
You can also encourage teams and individuals to come up with their own OKRs that will contribute to the company’s OKRs. For example, if your company's objective is to create a wonderful customer service experience, an individual employee’s objective might be to have most of the customers they work with walk away satisfied after they interact with them. They could then break this objective down into their own key results.
5. Track Your Progress
As you work on your key results, be sure to keep track of the progress individuals, teams, and the company as a whole have made. This will encourage accountability and help everyone feel invested in the OKR process.
Also, be sure to remain flexible as you proceed with your plans. You may find that some of your key results need to be adjusted as you go, or you may find that other key results fit your objectives better. Don’t be afraid to change things up to better optimize your efforts.
6. Celebrate Your Success
At the end of the time period specified in your key results, evaluate your success (or lack thereof) and determine what you can do better next time. Improvement is an ongoing process, so be sure to set OKRs on a regular basis as your business moves forward.
However, if you’ve achieved any of your goals, you have reason to celebrate! Even if you didn’t quite hit the markers you hoped for, combat discouragement by acknowledging the things you did accomplish. Be sure to share your sense of success with everyone else at your business, as well.
For more information on how your company can set and achieve goals, turn to the Grow Team. We can help you determine the best strategies for success.