How the OKR Management Strategy Can Benefit Your Business

I recently finished reading Measure What Matters, by John Doerr. The book focuses on businesses that follow and implement the Objective and Key Results (OKR) management strategy. For those of you who are unfamiliar with OKR’s, they are a goal-setting methodology driven by outcomes. Objectives should motivate and challenge the team. Key Results are a set of metrics, usually number or deadline driven, that measure progress and keep team members inspired to keep moving forward. The thinking behind the methodology is that companies will use outcomes instead of tasks as a driver.

The following acronym – “FACTS” – explains the five ways OKR’s can empower your employees:

  1. Focus. When employees are provided with a limited number of objectives, it is easier to keep their attention. Each objective should have no more than five key results. The basic formula is, “I will accomplish (blank), as measured by (blank).”
  2. Alignment. Once objectives and key results are set, employees are provided with increased company transparency and overall alignment of goals. OKR’s provide employees a sense of clarity as to what is expected and a measure of success.
  3. Commitment. Employees are focused and aligned. OKR’s serve as a set of commitments, and competitive spirt increases as everyone works toward their own OKR’s.
  4. Tracking. OKR’s should be tracked using the established metrics. While it’s not necessary to track results daily, monthly or quarterly tracking will help keep everyone accountable.
  5. Stretching. The idea of stretching is that setting lofty goals allows employees to strive for greatness. Even if they fall short, they will accomplish a lot of great things along the way.

Here is an example of an OKR that a finance department might utilize:

Objective: Improve Budgeting Process

  • Key Result 1: Hold planning/brainstorming meeting with all department managers.
  • Key Result 2: Receive budget proposals from department managers by October 31.
  • Key Result 3: Close the final budget by November 15.
  • Key Result 4: Meet quarterly with department managers to discuss budgeted to actual results.

OKRs can be used in any aspect of your business and serve as a simplistic framework for success. And in our current environment, I think we could all benefit from some simplification.

Thomas Yankanich is a director with Kreischer Miller and a specialist for the Center for Private Company Excellence. Contact him at Email or 215.441.4600.    

 

 

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