Introducing OKRs to Teams
Objectives and Key Results (OKRs) are a goal-setting system aligning and engaging all the teams in an organisation.
The main difference with OKRs from more traditional planning methods is that OKRs are set, tracked and measured every quarterly. This focus engages the entire workforce in driving and supporting the organisation’s strategy. Google adopted OKRs in 1999 and still uses them today to implement strategy and align their people - all 160,000 of them.
- Objectives: What do we want to achieve?
- Key Results: How are we going to measure our progress and achievement of the desired outcomes
Advantages of using OKRs:
- Gives business focus and alignment on what matters
- Helps direct energy to outcomes, not tasks
- Sets a cadence to ensure we are responsive to an ever-changing operating environment and take time each quarter to make sure we are on track
- Engages all teams and supports culture of learning and continually improving
OKRs are not a top-down goal setting system. The leadership team identifies and defines the three to five strategic annual OKRs for the business. Teams then define team objectives linked to these OKRs. Ideally, this is a parallel process, simultaneously bottom-up and top-down and cross-functional.
“Having goals improves performance. Spending hours cascading goals up and down the company, however, does not. It takes way too much time and it’s too hard to make sure all the goals line up. We have a market-based approach, where over time our goals all converge because the top OKRs are known and everyone else’s OKRs are visible. Teams that are grossly out of alignment stand out and the few major initiatives that touch everyone are easy enough to manage directly. So far, so good!”
Laszlo Bock, Google’s former VP of People
Using the leadership OKRs, teams have clear direction and can determine what is a priority and how the team can contribute to the success of the organisation.
Team OKRs will not always be 100% aligned with organisation OKRs. Some teams may choose an OKR that aligns to resilient business goals or cultural initiatives.
Some examples of team quarterly OKRs might be:
- an organisation OKR set by the leadership team
- directly linked to a key result of an organisation OKR
- contribute to a resilient business goal
- focused on improving a system or process
- about improving the culture of the team or organisation
OKRs are not the same as KPIs and should not be used for business as usual.
Suggested planning cycle
The leadership team brings inputs from relevant stakeholders, including the teams in their function, employees, customers, suppliers, markets and industry, into their annual and quarterly planning sessions. Team leaders, working to the same cadence, also collect inputs from their customers and teams. This process ensures organisations are always listening to industry, customers, people and their operating environment.
Organisational leaders should allocate some undistracted time to focus on planning and collecting inputs in the first and last week of each quarter. Leadership team OKRs should then be strategic or have a strong connection to the resilient business goals. When setting objectives, the leadership team debates, discusses and challenges each other’s thinking until there is agreement as to what are the three to five most important objectives for the business to focus on during this period.
Teams do not (usually) have annual OKRs, only quarterly. Most teams will have at least one OKR every quarter. As teams get comfortable with OKRs, they may have more than one in a quarter but never more than three.
Other resources
OKRs - Introduction for Organisational Leaders