In this article we will talk about:
- What is OKR?
- OKR and its benefits
- How to implement OKR
- Example Blogger OKRs
- Example of OKRs in a Planning Worksheet
- To Close - Common Mistakes
It is impossible to see companies like Google, Intel, Twitter and Dropbox as unsuccessful institutions. Among the many policies adopted by each of them individually, there is a characteristic common to all in the form how do you plan your goals and strategy?: the methodology OKR (Objectives and Key Results). Let's understand more about it and learn how to put it into practice in today's article. Follow:
The term in English means Objectives and Keys Result. Although adopted in large successful companies, the methodology is still little known and applied in Brazil. Basically, OKRs are goals or objectives that you want to achieve, followed by metrics that indicate whether the results have been achieved or not.
To better shape you, see an example of the objectives and key results of a fictitious software-as-a-service company (SaaS). Just to contextualize, let's imagine that they invoice R $ 100.000 of monthly recurring revenues, have a churn rate of 2% and the average ticket is R $ 2.000, ranging from R $ 1.000 to R $ 3.000 .
In this case, we could have the following OKR:
- Objective - Increase recurring revenue
- Main Result 1 - increase monthly recurring revenue by 30%
- Main Result 2 - decrease churn rate to 1%
- Main Result 3 - increase average ticket to $ 2.500
As you can see, all the results are measurable, somewhat challenging and will be pursued over the next quarter. This leads us to understand a little more about the main characteristics of Objectives and Key Results:
- Short Cycles - objectives must be annual and quarterly
- Transparency - must be publicly available to any undertaking
- Measurement - so you can track and understand whether you are getting close or not
- Ambitious Goals - goals should leave the team uncomfortable (in a good way)
- Focus - few goals with few goals, OKRs should determine relevance of what should be done
Within a company there are few things as important as teamwork for business growth. The OKRs have been bringing agility to the process of unfolding cycles, enabling better adaptation and change, reducing the risks of crisis.
It is important that the goals defined are clear so that the team has a full understanding of the objectives set, so that they can devote more time to achieving them. A limited number of goals can increase the likelihood of success, so that each individual in the team is responsible for a certain part in the effectiveness of the plan.
The great benefit of the OKR methodology is that the company manages to focus on the expected result and not on the efforts or difficulties on the way to success. In addition, it is necessary to outline goals that take the team of employees out of their comfort zone without limiting their ability to contribute to overall growth. While it may seem like a daunting task, setting a goal plan for your business based on OKRs is simple as long as you tailor the reality of your business.
It is advisable to implement the goals in short and in stages, until everyone is comfortable with the methodology. Setting quarterly OKRs is a good way to encourage the team and give feedback over time, so that everyone can suggest improvements and earn points for the effort.
The idea of implementing all new methodology is to make the changes in phases, starting with the senior team and gradually spreading in learning cycles. Following all these tips is very difficult that the team also does not get carried away to fulfill the established goals.
In that sense, it may make sense at first not to implement individual OKRs so that the whole team gets 100% focused on the OKRs of the company and the teams as a whole. That said, let's see a step by step and timeline that can help you when implementing Objectives and Key Results in your company:
Step by step
- 1 step - Determine what is the main goal of the organization for the year
- 2 step - Divide, for the next quarter, what are the most important objectives (up to 3)
- 3 step - Create 3 to 5 key results (maximum) for quarter goals
- 4 step - Measure weekly key results
- 5 step - Follow monthly key results of the company
- 6 step - At the end of the quarter (before the beginning of the next), retake step 2 and 3
Assuming we were planning the implementation of OKRs in your company for 2016, we would have a chronology something like this:
- November / 2015
- Brainstorm to determine 2016 first quarter goals
- Decision on which system to use to share OKRs internally
- December / 2015
- Report company on the 2016 and 2016 first quarter goals
- Scribbling personal, team and business OKRs
- Implement software or worksheet to follow the OKRs
- January / 2016
- Introduce OKRs in an enterprise-wide meeting
- Managers monitor individual OKRs
- February / 2016
- In the middle of the quarter it is worth a reassessment of the established objectives and results achieved
- Understand if you are on the right track and take action to hit the road
- March / 2016
- Meeting with the entire company to track individual, team and company results
- Show new OKRs for next quarter
- Restart the process
As you can see, the process of implementing OKRs does not happen from one day to the next. It requires prior preparation so that your company can pursue the goals outlined in a structured way. If you are in the middle of the year, it is not impossible to implement OKRs, but in this case, my indication is that the whole process is done looking towards the end of the year, and when the year is over, you start again with planning for the following year.
Going now to a real example, I saw one Rick Klau's very good video, who is a product partner in Google Ventures over OKRs. The video is a bit long and inspired this post in a few moments. I do not know about you but I really like to see examples and that's why I brought the examples given by Klau's own OKR from the time he was in front of Blogger:
- Objective 1 - Increase organic traffic by xx%
- Key Result - Launch 3 features that will impact organic traffic
- Key Result - Best 404 pages by increasing pageviews coming from 404 at xx%
- Objective 2 - Speed Up Blogger Revenue Growth
- Key Result - Post monetization tab for all users
- Key Result - Launch 3 experiments linked to revenue generation
- Key Result - Finish a feature for Blogger AdNetwork
- Key Result - Implement AdSense Host Channel Targeting to increase RPM by xx%
- Objective 3 - Improve Blogger Reputation
- Key Result - Speak in 3 industry events
- Key Result - Coordinate PR efforts of Blogger's tenth anniversary
- Key Result - Create Blogger Twitter account and join daily
- Key Result - Identify and chat with top xx Blogger users
As we speak, 3 are goals, with a maximum of 4 important metrics. In this example I do not even like a few key results because they are focused on effort rather than outcome. This may give you the false sense that by completing 100% you have achieved your goals but if the effort did not generate revenue growth, tangible increase in reputation or traffic, it was just misdirected effort.
Remembering that these were his personal OKRs, which were certainly in line with the OKRs of the Blogger team and Google as a whole.
I'll use the same example of Rick Klau's OKRs with Blogger to show how simple it can be to implement OKRs using a strategic planning worksheet. To begin with, you determine your main goals. As we've already mentioned, it's important that there are no more than 3:
After doing this step, you need to determine which are the most important outcomes for each of these goals. In the image below, I separate the overall goal from the goals:
Once you've traced the expected goal, you can determine the actions required for key results to be achieved:
I tried to simplify the use of OKR in a strategy tool, I hope it has become clear, but if you have questions, just put in the comments.
I hope that's not your case, but I often see managers or advisors sinning for excess or the easy way out. OKR has come up to make these errors difficult, because it has a well-defined and defined scope. Anyway, if you see yourself close to one of these items, it's best to turn the alert tone on:
- Lots of OKRs
- Give very high scores for your results
- Easy goals to achieve
- Planning for more than a year without quarterly reviews
- Do not show results and indicators for company