What is OKR? How to Avoid the magpie Effect while Scaling up Your Business.
We’ve all done it. It’s easy to get distracted by something shiny and new that distracts us from our true business objectives. Roger Longden says Objectives and Key Results are essential to keep your eyes on the fundamental business objective.
Focus is something we all struggle with from time to time. Still, when constantly distracted by business-as-usual tasks, it can be even more challenging to keep your eyes on the prize and not get distracted by the new or the unexpected.
A team of cohesive individuals is essential for many businesses to succeed. They must work closely together and clearly understand what the company wants and how it will achieve it.
The “drift” is when the organization proliferates, and the team loses some of its glue as more people join the organization and it becomes more complex.
Things used to work differently than they did. This makes it more challenging to see the way ahead.
How can you keep your eyes on what will drive growth, foster innovation, and ultimately lead to success? How can you get everyone in your organization on board?
How to stay focused
Objectives and Key Results (OKRs) are the solutions. They help companies communicate and define their success and make it easier for others to see that they are moving in the right direction. This helps to avoid doing things that might seem more exciting but don’t bring the desired results.
Technology-based businesses are some of the fastest-growing in the world. Unsurprisingly, OKRs are used by Silicon Valley’s most prominent brands, Google, Twitter, and LinkedIn.
What are OKRs?
Objectives and key results are a management framework that allows everyone to see progress toward the company’s standard and overall strategic goals. Many organizations use a top-down goal-setting framework, which often leads to confusion when deciding what goals to set.
OKRs are a more agile approach to achieving your goals. They require you to create specific actions, then communicate and monitor progress towards them. It isn’t the same ethos that you would expect from the top. It is around a 30% down/70% up split in setting OKRs. While the objectives are brief, ambitious indications of where you want, the key results are actual deliverables that track progress toward your goals.
OKRs are fundamentally designed to address various issues that can go wrong in rapidly growing businesses. They help them stay focused, align with the overall strategic goal, show clear progress, stop siloed work, end siloed work because they work across an organization, encourage internal creativity and ambition, and allow for “smart failure.”
OKR’s core value is alignment. The whole organization must work together to achieve management’s strategic business goals. We’ve already mentioned that alignment is easier in the beginning stages of a company’s evolution. There are fewer employees, and things have been well managed. With increasing size comes greater complexity, and alignment is often the first to be lost in growth. OKR allows each person responsible for growth to track their key results. Because OKRs can be transparent, they help ensure alignment across all levels and departments to achieve the same goals.
We are making progress.
OKRs should be clear, quantifiable, and unambiguous. They must also show incremental change over time. We must be relatively relaxed – there’s a difference between output and outcome. Output is just ticking items off a list. While an outcome is an actual result, it is an outcome.
The easiest way for organizations to show progress is to create a binary outcome where the outcome can be either achieved or not. If you have something, it’s easier to show progress. However, demonstrating milestones can indicate that you are at least 25% of the way to success. This signals that management is making progress and that you are working towards achieving your goals. The amount of incremental change you make over time will show how far or close you are to your ultimate goal.
OKRs can be bi-directional. They don’t flow from the top to the bottom of an organization. Instead, they are established in specific groups throughout the entire organization. This means that there is no need to work in separate departments. Collaboration across the organization is possible. This allows colleagues to work together more effectively to achieve common goals. Working transparently also means everyone knows their critical role in the larger picture. Colleagues can see the benefits of working together towards common goals.
Ambition and creativity
OKR believes that people are the most critical aspect of an organization. Culture plays a crucial role in OKR. It is important to note that once the leaders have established their goals, they will determine the best way to achieve those key results. They are not forced upon their heads. To reach the endgame, ambition, creativity, and innovation are essential. Employees who set ambitious goals will be given the best resources to help them achieve them. This encourages internal entrepreneurship and helps with job satisfaction and employee retention.
OKRs require that failures are handled quickly and in an intelligent manner. Failure is an essential part of OKR practice. It is what allows organizations to evolve OKR.
OKRs are part of agile organizations and encourage “retrospectives.” This is where teams reflect on their failures and identify what they could have done differently. The failure should be a manageable risk to the entire organization. It should be managed so that it does not put others at risk.
Businesses that use OKRs integrate them into their daily work routines, making them part of their success in demonstrating and achieving results. In a fast-growing organization, time is scarce, and it is often difficult to look at the bigger picture. OKRs allow employees to stay focused and empower them to make the right decisions to achieve the desired results.