OKR or Objectives and Key Results is getting very popular in 2020 and is gaining more attention for organisations to improve their overall performance. This article will learn what OKR is and why this methodology is a powerful strategic planning tool.
OKRs stands for Objectives and Key Results. An objective is what you want to achieve, and a Key Result is how you plan to measure whether you have reached your objective.
Objective: I want to get in shape.
Key Result: Losing 20 Kilogram
The relationship between the objective and the key result is apparent. After all, what it means to stay in shape will be different for each person. A thin person may want to gain 5 pounds of muscle, while an overweight person may want to lose 20 kilograms.
The objectives are always qualitative and aspirational. They are something that you, your team or your organisation wants to achieve (and should not contain numbers!).
The key results are always quantitative. They will tell you if you have reached your goal, so they must be measurable to avoid any doubts.
Even the “Yes or No” key result is (really) numerical, as the key result is binary. For example, “Passing an exam” is a result of a valid numeric key that can have Yes (1) or No (0) values.
OKRs can belong to an individual or a team. A company itself must have its OKRs. Depending on your company’s size and maturity, consider assigning OKRs only to teams in your first planning period. This will significantly simplify adopting OKRs, as you will not need to integrate all employees.
How many goals? A person or team must have not more than 5 objectives per OKR Cycle (for example, quarterly).
At first, having everyone with just one goal proved to be very successful. First, the team will quickly learn the value of focus, going to the extreme. Second, you will not overload the team with learning a new process and complete planning simultaneously.
How many key results? It must be more than zero; otherwise, we have no definition of success. At the same time, we found in practice that objectives with more than 5 key results are challenging to maintain. Usually, well-defined OKRs have a maximum of 5 key results.
Is an initiative the same thing as a task? Yes, exactly. To improve the focus, OKR suggests that you create an initiative plan, which is nothing more than a list of the tasks needed to achieve the key results. There is no limit to the number of initiatives; however, you must plan within the allotted time due to the short term foreseen for OKRs.
So OKR is just that?
No. OKR goes far beyond a framework to support strategic decisions in companies of the most diverse sizes. OKR involves a profound change in the organisation’s culture, so it is much simpler to work in start-up companies because the culture is still being created. This does not prevent more mature companies from using OKR, but it is strictly necessary that top management is ready to embrace change.