When it comes to steering your brand towards its business objective, OKRs (Objectives and Key Results) can play a transformative role. In this blog post, we will explain how OKRs can help your business meet its goals utilising this powerful and easy framework.
What are OKRs?
OKRs or Objectives and Key Results, represent a goal-setting framework designed to establish and track objectives and their outcomes.
Whilst being a flexible framework, best practice is to make the objectives symbolise what you aspire to achieve – they should be actionable, inspiring, and impactful. The key results, in contrast, are measurable indicators of how well you’re achieving your objectives.
Why does your business objective need OKRs?
Every business with a focus on growth and improvement can benefit from OKRs. From start-ups at their inception to established businesses looking to expand their horizons, OKRs can be the compass guiding you towards your business objective. They will make sure teams and are focused and progress can be measured.
Here’s a breakdown of the goodness you can get by implementing OKRs:
- Goal Alignment: OKRs are designed to keep every team member in the company on the same page.
- Clarity of Expectations: OKRs provide a clear roadmap for success and how to get there.
- Accountability: As OKRs are measurable and time-sensitive, they instil a sense of responsibility and ownership.
- Transparency: OKRs offer a clear view of the progress made towards objectives, aiding in identifying bottlenecks and strategy adjustments.
- Culture of Achievement: OKRs encourage teams to set lofty goals, inspire innovation, and foster a culture of constant improvement.
How do OKRs work?
OKRs are quite flexible, any business goal that you want to achieve can be broken down into smaller time-boxed tasks with accountability and visibility using the OKR framework, let’s take a closer look at a simple visual representation of the structure:
As you can see from this example it’s super easy to track and implement.
Your key results should always have a definitive ‘time to be achieved by’ attached and your initiatives are the steps you need to achieve that key result in the time frame required.
In practice most businesses don’t operate with this level of visibility, focus and accountability. This is the reason OKRs are used by some of the most successful companies in the world.
Here’s just a selection of the well known companies using it today:
What is so transformative about OKRs?
To examine this question let’s go back to where OKRs started. John Doerr, the pioneering investor who introduced OKRs at Google, stated in his book, Measure What Matters, “Ideas are easy. Execution is everything.”
It’s a hard point to contest. Having invested a staggering $12 million in a promising yet fledgling startup, which would soon evolve into the tech giant we know as Google, Doerr saw that the OKR framework could add the missing piece of organisation, planning and execution to the impressive tech and people at Google.
After adopting his system of Objectives and Key Results (OKRs), Google experienced meteoric growth, transforming into the powerhouse we recognize today.
What OKRs gave google was a roadmap to achieve a big aspirational goal, broken down into achieving smaller tasks in a set period of time with clear visibility and accountability across the whole organisation. In other words, the ability to focus on the important goals and a way to measure how to get there.
Let’s dig in further as to how this framework was born.
Where did OKRs come from?
As John Doerr stepped into his role at Kleiner Perkins in 1980, he didn’t come empty-handed. He had in his arsenal a groundbreaking management approach that would redefine the landscapes of Silicon Valley.
During his time at Intel, he found himself under the mentorship of management maestro, Andy Grove. It was here that Doerr became acquainted with Grove’s transformative system of goal definition and responsibility.
In a conversation with the Harvard Business Review, Doerr revealed:
The essence of Grove’s methodology was a radical concept that teams yielded better results by concentrating on outcomes, not procedures.
Rather than dictating a specific course of action to Intel’s workforce, Grove proposed a goal and allowed them the freedom to figure out the means to achieve it.
He initially termed it Intel Management by Objectives, but soon opted for a more streamlined moniker – Objectives and Key Results, which today, we popularly know as OKRs.
A real-life OKR small business success story
You might be thinking at this point “This is all very well for silicon valley behemoths, but how does that relate to my business?”
Let’s use this opportunity to lay out a real life example of a small, hosting business, which was transformed by implementing OKRs.
Hostinger discovered OKRs back in 2017 as a means to solve a problem they had with focus. Below you can see the point at which they started to implement the framework and how their business took off from that point.
Utilising the same team and resources, but being super focused on their objectives (and how to achieve them) enabled them to become the #3 hosting business in the world in a fiercely competitive industry.
In short, implementing OKRs allowed them to:
- Concentrate on one or two big objectives at a time
- Drop a few product lines to be able to focus on what matters the most – and what could have the biggest impact within the next quarter
- Enabled staff to set their own directions and objectives, instead of asking others what to do
- Increased trust and loyalty, due to ownership (and no micromanagement)
If you’d like to read more about it, the Hostinger CEO Arnas Stuopelis lays it all out in this Linkedin post.
Summing up
The magic of OKRs lies not just in setting ambitious goals but in the strategic execution that follows.
As proven by Google’s, Hostinger’s and countless others business growth stories, the implementation of OKRs can indeed be a game-changer and your secret weapon.
So, whether you’re a fledgling startup or an established enterprise, remember – it’s not just about having great ideas, but also about executing them brilliantly.
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FAQs
Q: How do OKRs align my team’s goals with the business objective?
A: OKRs allow each team to see how their key results contribute to the overall business objective. This alignment fosters collaboration and ensures everyone is unified towards the same goals.
Q: Can OKRs boost transparency in my business?
A: Absolutely. OKRs provide clear visibility into the progress made, which aids in making strategic decisions and boosts overall performance.