OKR Methodology: what it is and how it improves results in companies
CONTENT ON MANAGEMENT AND PRODUCTIVITY .
Applying the OKR methodology is an excellent way to overcome the challenge of planning and executing strategies within companies.
Also because, you know better than anyone that only with well-oiled processes, working in the best way, it is possible to be competitive and differentiate in the market.
The competition is big – and growing – and having methods that improve the day to day work is more essential.
Thus, the success of any business strategy goes through a correct management model, focused on the whole (not just profit).
The OKR methodology thus works to ensure that the best results can be obtained within the organization.
But, after all, how does this acronym mean? How is this method applied and has the desired effect within the business?
In this article, we’ll talk about these details and give some tips to maximize your steps.
So what is OKR?
Objectives and Key Results (OKR). Translating: objectives and key results. To better understand what this is about, let’s go into a little history first.
The acronym refers to the methodology created by Andrew Grove who, at the time, was CEO of Intel. The popularization of this method, however, only took place in 1999, on account of John Doerr.
He was an investor at Google and presented the same to the company’s employees, and since then, he has been credited with much of the company’s growth.
Therefore, OKR proved to be effective for companies of all sizes, from small to large corporations. And then we can start to understand it better.
At the time, Doerr established the use of the method as follows:
At this stage, the company makes clear what it wants to happen. It needs to be put in a didactic way and its importance explained.
This is important for the people involved to dazzle the end of the process and the benefits to be achieved with it.
Key Results (KR)
In this second and last stage, the goals that will have a direct impact on achieving the objective are addressed – if it is fully achieved.
They will indicate whether the objective was actually achieved and give full control over the process. And, with control, there is obviously efficient administrative management behind it.
Ah, an important detail: the weather.
For a tactical OKR that wants to fix some process right away, the methodology is usually employed within a quarter.
But when it is strategic long term, then the same applies for an entire year.
The characteristics of OKR, a different methodology
One of the main advantages of applying this methodology needs to be clear right away: it is totally flexible.
In other words, it is different from more traditional methods such as Scrum, PDCA cycle, BSC, 5W2H, among many others.
Since its inception, there have not been any stricter or even basic practices for OKR to be successful in its application.
Details can and should be adapted to make sense of the reality of each business. And when that happens, it’s easier to carry the process through to the end.
OKR stands out, for example, for having a peculiarity in relation to the goals. They are set for a very short period of time.
What does that mean? Two things:
- They are more tangible to be achieved;
- They allow for quick course correction – if necessary.
But for that, again: it is necessary to clarify the objectives and also the desired key results. This will be essential for team engagement.
Another important factor that the OKR methodology supports is feedback.
The “KR” of the acronym, that is, the key results must be reported weekly. This allows for predictability of the final result when the end of the quarter is reached.
Soon there will be time for a course correction and return to the desired path.
Communication is the key to the business
For the application of the methodology to be efficient, everyone’s engagement is necessary. And this is only possible when there is clarity, from the management, about the proposed goals and objectives.
The method requires that there is transparency in the way of acting. For this, it is up to the directors to be direct and expose the company’s priorities and how this will unfold in results.
Therefore, decision-making will always be based on data. And the analyzes made become, in the following quarter, a new OKR.
Within this context, performance appraisal is extremely important. Therefore, communicating is even more important.
Ah! And here, one more differentiation of this methodology in relation to the others. The effort is measured and taken into account much more than the result.
The latter, of course, is important – but not the main one. Also because, to get where you want, the path needs to be well-trodden.
The fact that OKR is quarterly helped it to be covered in the best way so that the result really is as expected.
By getting the best practices right, it will be easier to achieve results in different situations more assertively.
How to apply the OKR methodology in companies? See 10 steps!
Now that you understand what this management tool is and also its benefits, it’s time to know how to put it to use.
We have set aside some steps for its application within companies.
These steps must be carried out – we reinforce – always in a clear and communicative way.
That is to say, everyone needs to be aware (full time) of what is being thought and what and how it needs to be done.
1 – Start small
Ideally, start with a smaller approach, focusing on issues that are not necessarily vital.
The point here is to validate the way of working and how teams can get used to this method.
Also, make this initial application collectively. It is important that no one feels overwhelmed or pressured to deliver results.
It is therefore a learning stage – make that clear.
2 – Build a win to motivate
OKR is only useful and really efficient for companies when everyone is engaged. And for that, you need to make trust flow.
One of the ways to achieve this is, when you first apply it, to establish a result that is easy (but not too easy) to achieve.
Also, choose to carry out this test with teams that have a lot of interaction – both with each other and with other areas.
This methodology aims at unity and synergy between people (something the DevOps culture preaches), but it doesn’t do magic. It is necessary to have a link between all of them in order to make them closer.
Therefore, establishing a plausible goal to be reached within 3 months of application is a way to keep everyone’s motivation up to date.
And then, if that happens, it’s time to look for higher flights.
3 – Constant training and improvement
“The more I train, the luckier I get”. That phrase by Tiger Woods certainly has some truth to it.
But here, of course, we are not referring to luck, but knowledge, competence and confidence to get things done.
Therefore, within companies, training and qualification must be constant.
It is up to managers to explain the importance of the goals and the benefits that OKR brings.
Provide training, also, aimed at setting goals and unfolding them later.
Show that initiative and engagement are important and educate teams on what motivated the adoption of the methodology.
4 – Make KR metrics – not tasks
The culture to be built is to focus on the result and how it is obtained.
That’s the difference between efficiency and effectiveness.
It is not enough to just deliver the desired result, the path to reach it needs to be well travelled.
The process has to be done well – and recorded – so that it can be put as good practice for everyone.
Tasks are just hypotheses, options of what can and cannot be done.
But the focus, of course, must be on the ultimate goal. He is the reason for all of this.
6 – Set OKRs for everyone
Annual or quarterly, it doesn’t matter. OKRs must always be few and of high level. They are the criteria, the prerequisites for the company’s success in that period.
This happens with each team within the company thinking about how they can contribute to reaching the objective that the organization needs.
And right now, OKRs can be either specific or broad.
In other words, it can be aimed at something smaller – but which will be reflected in the whole in some way –, as in a macro issue, involving more parts of the company.
7 – Use OKR Planning
One way or another, it takes patience. After all, the goal-setting process is usually time-consuming.
However, to speed up this process, OKR Planning sessions are essential.
For this, groups are created with people from different areas – together with managers and proposals begin to appear.
So, at this moment, the OKRs for the quarter will be defined based on the OKRs presented by the company.
In other words, on top of the company’s main objective, short and intense goals to get there will be set.
It’s the perfect opportunity to choose multipliers. They will be responsible internally as agents of change.
They are focal points to ensure that results are delivered at the end of the period. They work as a kind of guardian of the methodology, true coaches.
This person teaches you how to do it, when to do it, and monitors so that everything goes as planned.
8 – Put OKR in the teams’ routine
OKR refers to culture. And, as such, it needs to be assimilated for it to really be alive and make sense within companies.
Therefore, for it to be present on a daily basis, the team’s activities must be prioritized having the methodology as a basis.
Right now, the organization is essential.
As the OKRs are quarterly, the calendar should already provide for meetings for them, seeking to monitor the evolution of the OKRs, avoiding running into dates, deadlines, etc.
9 – Rate the OKRs
An efficient way to organize the OKRs is to give them notes.
Prioritize the assessment from the simplest to the most complex.
Let’s use a simple example to make this analysis clearer.
Let’s say the goal was to increase the sales conversion rate by 3x . If you managed to increase 1.5x, you logically reached 50% of the goal.
10 – Manage people correctly
The success of the methodology, you certainly have it clear at this point, depends on the involvement of people.
So always be on the lookout for factors that can demotivate your teams – and attack that right away.
One of the important factors is the recurrent non-attainment of the OKRs.
So it’s like we said in step number 1. Build it little by little, let the culture flow. Provide the ideal conditions for, only then, climbing to larger and more complex goals.
This is even important to know how to better pay your teams.
Don’t forget to recognize when goals are reached, ok?
So, how can we help you?
If you have any questions about the methodology or want to share some “pain” in running your business, talk to a consultant today.
Take the opportunity and read two articles that will help you in your company’s day-to-day.
The first talks about the importance of organizational culture and how it contributes to a better corporate routine.
The second one brings 5 tips for a more productive and positive work environment for everyone!
CONTENT ON MANAGEMENT AND PRODUCTIVITY . Applying the OKR methodology is an excellent way to overcome the challenge of planning and executing strategies within companies. Also because, you know better than anyone that only with well-oiled processes, working in the best way, it is possible to be competitive and differentiate in the market. The competition is big – and growing…