Setting Goals that Deliver Results
For me, OKRs are still the gold standard in goal setting. Much is written on OKRs, their value and their challenges, but in my experience, we make this more complicated than it needs to be. So let's bring it right back to basics.
Introducing OKRs (Objectives and Key Results)
OKRs (Objectives and Key Results) are more than just another goal-setting format. They’re a framework for leaders everywhere in the organisation, from CEOs to CFOs and cross-functional leaders like Product, Project and People Ops.
Objectives are there to push you. They should be ambitious. We measure them via key results, which, unlike objectives, are specific and often have a numeric value.
Leaders, teams, and stakeholders collaborate to set OKRs that specify the most important problems to work on and articulate what success looks like. This empowers the team to make independent decisions about their daily work and, at the same time, keep those decisions aligned with longer-term strategy and vision.
Finding your OKR Rhythm
The success of OKRs relies on quarterly set-align-execute-review OKR cycles. By defining OKRs each quarter, we ensure that what we’re working on and towards is always short to medium-term. It creates a sense of relevance and urgency across our teams. It also allows team members to course-correct during this time when priorities shift, or the business focus changes.
While OKRs are set quarterly, they should be discussed and reviewed weekly. Your OKRs should be the focal point in every team or business meeting. In 1:1 meetings, again initiatives and key results should be discussed. Regularly checking in moves the needle and ensures we don’t develop a set-and-forget mentality.
Execution
OKRs on their own do nothing, regardless of how fancy your approach or goal-tracking software is. They need leadership buy-in and focus. So we should always start here. When a company strategy is clear and understood, setting OKRs at any level is easier. If your strategy is poor or non-existent, there will be too much ambiguity, and developing meaningful OKRs will be very difficult.
The first step is to clarify your strategy. There’s no room for business jargon here. Get specific and keep language simple and conversational. Next, we want to break down our priorities for the year and the quarter ahead at a leadership level to bring our teams together.
Then we can start to think about questions to discuss with your team:
- Objectives: What are the things we will focus on this quarter? Why and why now?
- Key Results: For each objective, how will we define success? How will that help the team?
- Environment: What do you need to know about the environment you’re operating in?
- Risks: What are our biggest risks? What does failure look like? How can we avoid it?
- Decision making: What scope do they have for decision-making? How can we make decisions quickly? Who else needs to be involved?
- Alignment: Probably the most important one! Is the team aligned with each other and with you as a leader?
When it Comes to Setting OKRs, What Does Good Look Like?
Here, we'll outline some OKR examples to help you create your own.
Objective
Grow our business globally
Key Results
Grow our revenue to $120M in the US Market
Grow our revenue to $40M in the EMEA Market
Increase annual contract renewals to 85%
Increase multi-year contracts to 60% of total contracted revenue
Objective
Reach $100 million in ARR
Key Results
Drive $30M in new contracted revenue
Deliver $20M in expansion bookings of existing customers
Retain 95% of customers YoY
Objective
Successfully launch our new product by the end of Q1
Key Results
Develop 10 customer case studies by the end of the quarter
Get onto the G2 Grid for this new product
Deliver new product NPS of 60 or above consecutively over two quarters
Secure a recognised award at a leading industry conference
Objective
Be recognised as a great place to work
Key Results
Consistently achieve eNPS of 60 or above.
Ensure at least 75% of our people make use of our mentorship program
Ensure that at least 50% of our new roles are filled from internal promotions
Reduce overall voluntary attrition rate to 5%
Common Pitfalls to avoid:
If you're new to Objective and Key Results (OKRs), here are some common mistakes to avoid.
1. Too Many Objectives
We see this a lot. When you introduce too many objectives, none tend to be accomplished, and people lose interest, declaring OKRs just aren’t for them. Aim for 3 - 5 per planning period.
2. Everyday To-Dos as OKRs
Avoid creating objectives with a list of everyday tasks as key results. OKRs are designed to be future-focused and aspirational.
Smaller tasks or initiatives play a crucial role in delivering OKRs but not as key results. Instead, shift the focus to measurement and ask yourself, ‘How will we know if we're successful?’
For example, “Conduct interviews with 10 customers" would be considered a valid key result. Associated tasks that feed into this might include "Make a shortlist of customers to approach for interviews," "Schedule interviews", and “Draft interview questions.”
3. Set and Forget Approach
Don’t treat your plan to roll out OKRs as a new year’s resolution.
Adopting OKRs has to become a core part of your organisation's culture. While a company’s objectives might have an annual or multiple-year focus, quarterly OKRs are a good place to start.
4. Stay Honest with Regular Check-Ins
Ensuring you and your team are checking in regularly and updating your OKRs keeps everyone honest. Consider setting due dates on specific key results and initiatives.
As your team grows, introduce a dedicated OKR champion to follow up with team members on check-ins. This ensures they happen consistently.
5. Objectives Set are Not Aspirational Enough
Many traditional goal-setting frameworks focus on your people hitting 100% of their goals. With OKRs, you need to think differently, with a focus on stretch goals.
Aim to set OKRs that challenge, drive innovation, push people to succeed, and see better outcomes at 70% to 80% completion.
6. Creating OKRs in Silos
Your people need to talk to each other when setting OKRs, otherwise achieving alignment and a common understanding will be impossible.
Make the company OKRs public and help teams understand how they can align and contribute to delivering the overall company strategy.
7. OKRs that are Solely Linked to Performance and Compensation
Performance outcomes and compensation are separate events, regardless of how goals are set and measured. In the context of OKRs, the focus should always be on setting stretch, creative goals. If employee compensation is solely linked to completing goals, your people will always play it safe. Encourage the right kind of behaviours and results by separating the two.
***
OKRs allow you to stay agile, grow and successfully align your people and business priorities. But I know from personal experience how easy it is to get stuck on them.
Remember that OKRs need to be built around a clear, actionable strategy, not the other way around. Be methodical in adopting OKRs, communicate your intentions clearly to your team, and you should find that your people are willing to embrace them.
Action Points:
Immediate Action Points:
- Review and refine your business strategy.
- Choose a goal-tracking and reporting method. We love digital OKRs - tools like Frankli help you set more effective goals and integrate goal-setting with other rituals like regular 1:1 meetings.
- Decide on company priorities for the year ahead.
30-Day Action Points:
- Set company goals for the coming quarter.
- Communicate company goals and OKR strategy to your people.
- Provide OKR resources and/or training for key people, including managers.
90-Day Action Points:
- Work with department heads on setting department goals.
- Work with managers on setting team and personal goals.
- Establish a rhythm of weekly check-ins on goal progress.
- Always think about the upcoming quarter and let that be your focus. Where possible, link these OKRs back to the company OKRs and the strategy that they align to.
