83% of surveyed companies agree that OKRs positively impact their organization. While strategy is crucial for the top leaders of an organization, the effectiveness lies not only in planning but also in execution. Without action, the time invested in planning becomes a complete waste.
Implementation is as vital as planning, and here's where OKRs take a center stage in this process. It simplifies the execution of strategies by breaking them down into clear objectives and expected results. However, that's not the only aspect to consider. Let's delve into the significance of OKRs and explore the possibilities it holds.
Objectives and Key Results, or OKRs, are a way for teams and individuals to work together to set challenging yet achievable goals with measurable results. OKRs help you keep track of success, get everyone on the same page, and get people involved in achieving measurable goals. This becomes especially handy when businesses deal with contingencies and situations where resources are low but results must be great.
Clear and crisp objectives are set by the company, and the key results that could be achieved through this objective are also laid out. It paints a clear picture of the individual and team roles employees have to play in the company to bring forth the desired results.
Gartner reports that 56% of the time dedicated to strategic planning is considered wasted by business executives. Planning without subsequent action is deemed ineffective. So, how does one translate plans into action? The answer lies in OKRs.
- You get results that are measurable with the help of OKR. Measurable results are not abstract, and they give companies a clear idea of where they stand. Without OKR, you might get results, but they might not be as easy to comprehend.
- Agility and flexibility are what make OKR an important aspect of business strategy. There is always room for corrections when it comes to OKR and you don't need to discard the entire goal or objective to incorporate minute changes in them.
- Employee engagement steadily rises when companies make use of OKR the right way. It gives employees a clear idea of the objective of their tasks and what is expected of them. It in turn increases motivation and satisfaction among employees.
- Alignment of goals is kinda the selling point of OKR. Be it individual, group, or organizational goals, OKR finds a way to bind them and align them so that none of the groups feel like their goal is not met.
- Prioritization is made possible with OKR as well. When there are multiple tasks to be dealt with in a day and tons of boxes to be checked, things can get muddy quite easily. But with OKRs in place, employees and the company now know which tasks to prioritize.
Strategizing is one thing, and taking actionable steps to implement those strategies is another. In most companies, huge relevance is given to strategic planning, where teams take months and months to come up with the right direction for the company to move forward.
But that’s about it. Most of them won't be able to translate those plans into actions and results. There is a gap. And this is where OKR comes into play. It is the missing link between planning and implementation, of saying and doing.
Say a company has planned to increase shareholder value by 25% within the next 3 years. This is the big picture. Now we break it into smaller pieces so that each employee has an idea of what is expected of them. Clear objectives are set, and measurable results are announced. The objective could be to increase the customer base by 10%, and the key result would be a steep increase in the revenue of the company. Two of these, combined, give you increased shareholder value. See? This is almost how business strategy and OKRs work hand in hand to actually establish the plans of the company.
Learning from the mistakes of others is an excellent way for companies to catapult their growth and get ahead of their competitors. Even though there might be companies that started with OKR way before you did, you now get a chance to look at the things they did right and did not, so that you can fastack your business journey:
1. Keeping the OKRs open ended and vague
If you consider something like ‘increase company revenue’ and ‘decrease customer complaints’ as objectives, then you have got it wrong. The most important element of OKR is specificity. Be as specific as possible so that there is no room for misinterpretation or ambiguity. As employees and managers read this vague objective, they could interpret it in many different ways, delivering sub-par results that take way too long to deliver.
Instead, combine them with key results like increasing company revenue by 25% by implementing a new CRM tool that helps employees retain and satisfy customers. This is much more specific and also shows employees a way to achieve the results.
2. Getting too excited and setting up too many OKRs
The concept of OKRs can be fascinating, and one might get carried away by the endless possibilities it offers. But if you deploy too many OKRs at a time, employees might get overwhelmed, and they might get disheartened before even beginning the tasks.
Keep it simple. Come up with a list of all the possible objectives and expected key results, and start arranging them according to priority.
Now eliminate the least important ones and choose the first few. This prevents employees from getting confused. You can also arrange them in order of priority to make the work even easier.
3. Not using the right set of tools
OKR implementation is no child’s play. If you do not have a proper system in place to streamline the activities or track the progress of the results, then you might not get the complete benefit of OKR. There are tons of OKR implementation tools out there on the market, some of the best among them, including ThriveSparrow and 15Five, which you can make use of to collaborate and visualize your progress.
These tools make sure that the goals of the employees and teams are aligned with those of the organizations. They also make it easy for employees to collaborate with each other to achieve results.
4. Confusing tasks with OKRs
Before you begin with OKRs, make sure to understand the difference between tasks and objectives. What happens with most companies is that they confuse tasks with objectives. OKRs are measurable and super specific in nature and help you reach bigger goals. On the other hand, businesses also have other everyday routine tasks that keep things in check in the background.
Confusing one with another will only lead to stagnation in both processes. OKRs should focus on outputs and results and be clearly expressed. Make sure your OKRs match the company's goals and are ranked correctly.
5. Setting up isolated OKRs
Collaboration is key when it comes to OKRs. OKRs require teamwork, and you cannot make them work in isolation. If individuals and teams focus just on their own goals without considering the goals of the company, the results will not be as impressive. Team-work without considering outside effects, which will reduce OKR value and miss opportunities. This is why companies must set OKRs uniformly and involve key stakeholders from across the company. You should regularly review and update your OKRs to ensure they still meet your goals.
Wrapping Things Up
Business strategy is important, but so is OKR. Companies can achieve the goals they decide upon by finding the right balance between business strategy and OKRs. Don't worry, its not as difficult as it seems. All you have to do is get clear on the purpose of your company and the direction it wants to go. Start from there and see where that takes you. And as mentioned before, there are tools available on the market to help you break the ice with OKRs. Check them out to see if that's something that resonates with you.
1. What is OKR and its importance?
OKR, which stands for Objectives and Key Results, is essentially a goal-setting framework. It's crucial in business because it helps break down ambitious goals into manageable, measurable steps. OKRs keep everyone on the same page, ensuring that the team's efforts are aligned and contribute to the company's larger vision. It's a practical way to turn big ideas into reality.
2. What is the importance of goals in strategic planning?
Goals are the cornerstone of strategic planning, offering direction and a roadmap for business success. They translate vision into actionable steps, providing clarity and focus for teams. Setting clear goals ensures resources are optimally utilized, guiding decision-making and measuring progress, ultimately leading to the achievement of strategic objectives.