We made Workjoy to making goal setting super easy - no matter of you use OKRs or other frameworks. For the success of any company, you need to set clear and established goals. It is one of the most effective ways of aligning your entire team.
OKRs, or "Objectives and Key Results," is a framework used to drive change. Traditionally, they have been established hierarchically, descending from top management objectives to lower levels of the organization. Nevertheless, this structure limits team’s involvement in running the company and misses valuable insights from those directly engaged in daily operations.
If you are considering whether OKRs is the ideal framework for your company, keep reading as we will further explore its perks and pitfalls, as well as some simpler alternatives.
Benefits of OKRs
OKRs is an approach created at Intel in the 70s, by Andrew Grove, and because of the value it adds to a company's management, it is still widely used.
Set ambitious Objectives
OKRs were created to help your company grow. So, when you are defining your Objectives - the direction you want to take over a period of time - make sure to set ambitious ones. This is the whole point of OKRs.
Then, to achieve meaningful change, you set a handful of Key Results - think of them as the milestones to help you achieve your Objective.
With this approach, you are giving your team a clear path to the desired outcome.
Align teams
They facilitate alignment by connecting individual and team objectives to overarching company goals, ensuring a unified focus. As Peter Engelbretch (former Intel leader) mentions, OKRs are a great approach to set a quarterly cadence in your company and ensure there is less ambiguity and more clear directions and priorities.
Regularly evaluate Key Results
OKRs framework implies a periodic evaluation of Key Results. How else would you know if you are on track to meet your Objective?
It is up to you to define the pace of the status meetings. Peter Engelbretch typically advises a weekly basis OKR progression assessment to ensure you are alway on top of things and aligned with the outcome.
In essence, OKRs empower teams to align and achieve the Objective by creating a roadmap that is both inspiring and measurable.
Drawbacks of OKRs
Although OKRs are a winning approach, they can be hard to get right at first. It is common for leaders to either do OKRs the wrong way or give up halfway.
Not all things can be easily measured as Key Results
OKRs work best for things that are easy to measure. For instance, if you want to launch a new product in a new market, you can easily create Key Results with quantified data like the number of conversions or sales.
The problem with OKRs is that they do not integrate the aspects of work that are not quantifiable. Here are a few situations where typically OKRs are harder to define:
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You want to make a strategic change but you do not know how to measure that change.
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You have thought of initiatives to implement but you do not know how they actually work.
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You want to improve some qualities that are not easily quantifiable.
One way you can use to overcome this challenge is by measuring quantifiable aspects with OKRs and resorting to feedback sessions or status meetings to measure the progress of the more qualitative dimensions.
The aim to meet OKR criteria can lower productivity
In the quest to meet OKRs, teams can be overwhelmed by constant questioning whether each step aligns perfectly with the established Objectives.
This questioning, while well-intentioned, can lead to overthinking and spending too much time validating each decision.
The risk here is that the focus shifts from productive innovation to a constant pursuit of perfection within the OKR framework, which complicates the team's agility and creativity in responding to the dynamic needs of the project.
To overcome this, you can:
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Conduct weekly cross-functional workshops, where team members can collaboratively explore and define project requirements with a more precise focus.
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Promote a mindset of adaptability by hosting monthly brainstorming sessions that empower teams to creatively address project needs.
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Schedule bi-weekly reviews to evaluate progress, address any challenges, and ensure team strategies align with overall goals. This will help maintain alignment without compromising agility.
It can be hard to grasp actionable steps
OKRs can be challenging to measure real change. When trying to set Key Results, it is very easy for leaders to do more of the same. And if you do not find different ways of doing things, you will not get different results.
So, a major problem with this framework is that you need discipline to learn how to set great OKRs - the learning curve is sometimes steep, and because of that many leaders end up giving up altogether. If you are giving OKRs a change, Peter Engelbretch explanation of how to set OKRs can help you in this process.
Key results should be feasible and completely adjusted to the Objective. If you are having trouble setting good-quality OKRs, you can consider implementing a collaborative approach.
Bring your team together and give them the autonomy to propose and refine action plans tailored to their expertise.
Here are key areas you must consider in this collaborative process:
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Team autonomy: Give teams the freedom to propose action plans based on their experience.
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Collective Brainstorming: Hold regular brainstorming sessions to collaboratively refine action plans.
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Custom Plans: Allow teams to customize action plans to address their unique challenges and opportunities.
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Feedback: Create mechanisms for continuous improvement through feedback
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Integrated Approach: Emphasize that setting goals is just the beginning. A clear action plan is essential for success.
By taking these steps, we not only ensure team alignment but also foster a dynamic and collaborative environment where teams contribute to achieving the OKRs.
Simple OKR Alternatives
Although OKRs are a solid framework for building cadence and grow your your company, it may not be the most suitable approach for you right now.
Here are a few easy alternatives worth considering:
SMART goals
SMART goals offer a simple and simplified goal-setting framework. This approach ensures that goals are clear, measurable, achievable, relevant, and subject to a specific time frame, streamlining the goal-setting process and maintaining effectiveness:
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Specific: Be clear about what you want to achieve. Instead of a vague goal like 'increase sales,' specify the target, such as 'increase monthly sales by 27%.'
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Measurable: Defines tangible metrics to track progress. Using the sales example, 'increase monthly sales by 27%' provides a clear measure of success.
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Achievable: Ensure that your goal is realistic and feasible. Setting an unreachable target can lead to frustration. Consider the resources and constraints, adjusting the goal accordingly.
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Relevant: Align the goal with global objectives. In the sales context, the goal should contribute directly to overall business growth and align with strategic priorities.
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Time-bound: Set a deadline for achieving the goal. Having a specific timeframe, like 'achieve a 27% increase in monthly sales within the next quarter,' adds urgency and focus.
Compared with OKRs, SMART goals are narrower in scope and more structured.
SCRUM/Shape Up and agile frameworks
These frameworks prioritize short-term focused planning in small, iterative cycles, also known as sprints. This dynamic approach allows teams to quickly adapt to changing priorities and market conditions, fostering agility and responsiveness.
Contrary to OKRs, these approaches are not company centered, but used at team level. Plus, they were designed to focus on project management and software development processes, whereas OKRs was created to align a company and help it grow.
When using SCRUM, Shape Up or a similar framework, you can hold brief daily status meetings to discuss progress, obstacles, and priorities. Also, take the time to break down large goals into smaller tasks during sprint planning sessions. For example, if the goal is to improve a software product, during a sprint, your focus may be on improving user interface elements.
Cascading goals
With cascading goals you establish overall objectives at the senior management level, and then systematically break them down into subgoals and subtasks for departments and teams. This hierarchical alignment ensures that each level of the organization contributes to the achievement of broader company objectives.
For example, senior management wants to boost customer satisfaction. Sales focuses on engagement, and customer support targets faster resolutions. This hierarchical approach ensures every department aligns with the overarching goal proposed.
Compared with OKRs, this approach is not necessarily measure-bond. The emphasis when setting cascading goals may be solely on achieving the desired outcomes, without considering the achievement of specific metrics. They are also more flexible in the time frame for each goal re-evaluation.
Key takeaways
Success isn't one-size-fits-all. There are tons of goal-setting frameworks you can choose from. It is up to you to evaluate and decide on one to follow now, considering your company's size and dynamics.
Although OKRs is a powerful framework to help you grow as a company, particularly because it allows you to set ambitious Objectives, align teams, and regularly evaluate Key Results. It also has its drawbacks, particularly:
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Not all things can be easily measured as Key Results;
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Trying to set perfect OKRs can lower your productivity;
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It can be hard to grasp actionable steps.
If you are looking to try a simpler approach, these are worth considering:
Remember, goal-setting is a journey, not a one-stop destination.