While SMART sets out a good rule of thumb in how to write goals, it doesn’t provide much support for the business environment. That’s where OKRs come in: Objectives and Key Results. This goal setting technique, invented by Intel, is used by many companies including GoPro and LinkedIn. Google attributes its incredible growth to the technique, which engages employees through the brainstorming process and helps them to see how their personal contributions impact the company’s overall strategy.
OKRs can be set on an individual, team or company-wide level. While there is no exact recommended number of objectives, you should choose a manageable number, say 3-5. The structure of OKRs is deceptively simple, but the more time that is spent defining them, the less ambiguity later down the line. Let’s look at the process of implementing OKRs in your firm.
Firstly, the stakeholders of the OKRs should be identified and should be a part of the whole OKR definition, execution and tracking process. Involvement is very important, as the benefits of OKRs are not just that they help your company to achieve its goals, but also to allow employees to engage with the company’s strategy and to understand the impact of their individual contribution.
You should first revisit your mission and vision statement and strategy to ensure that objectives and results are aligned with these. Objectives should be broad qualitative statements. Forget the specific and measurable elements of SMART here, and aim for things like “grow our company quickly without losing our culture”. Objectives might be revised on a quarterly or annual basis, so they should still be time-based, and they should be ambitious but achievable.
Defining key results is the process of breaking down objectives into quantifiable and achievable steps. You should define no more than 3-4 key results for each objective. It’s here that the “specific” and “measurable” come back into play. They should still be difficult, and lead to objective grading. You need to think about how to measure the success of the key result numerically. The final grade could be a decimal number between 0 and 1, or a binary number, e.g. 1 for “done” and 0 for “not done”.
For the example objective above of “grow our company quickly without losing our culture”, you might define the following key results:
- Hire 5 more members for the engineering team.
- Retain our Peakon engagement score of 7.0
- Organise bi-weekly social events to promote peer relationships
OKRs can be made public so that everyone can view each other’s current and past performance. OKRs should be reviewed in regular intervals, say weekly, to remind employees of the results and objectives they are aiming towards. OKR management software packages exist to support this process. Depending on whether OKRs were set for individual, team or organizational performance, stakeholders can rate their performances on each of the OKRs. The ‘sweet spot’ to aspire to at the end of the cycle is 0.7 to 0.75. If you are hitting all of your OKRs (getting a score better than this), then you’re not being ambitious enough.