Human Resources works tirelessly to find ways to provide an effective team for its company.
While there are countless strategies to help achieve this, our focus today is on the OKR framework. What are OKRs? Objectives and key results is an efficient system of strategy and goal management. This simple framework helps maintain transparency and alignment throughout an entire organization.
Better to fail at doing the right thing than to succeed at doing the wrong thing.
Best Practices for OKRs
In this article, we’ll take a look at the best practices your organization can apply to align team members strategically.
The Definition of OKRs
OKRs developed from another well-known strategy-execution framework– MBOs, or management by objectives. OKRs improved upon this framework, and gained popularity among Silicon Valley companies. Most notably, Google adopted OKRs and attributes much of its unprecedented success in the tech industry to this framework’s simple yet effective set up.
The Objective and Key Results are a simple strategy: users decide on a goal or objective statement, and define between three and five key results, or tangible outcomes that they will be able to see within their business. If these outcomes are achieved, then the objective itself should also be successful.
OKR Process to Achieve Strategic Alignment
There are a number of benefits to OKRs. All of these begin with setting up your OKR properly. Let’s take a look at how strategy and OKRs align:
1. Strategic Initiatives
First, top-level employees will need to consider the long term strategy of your company.
The most impactful OKRs take strategic direction into consideration. The planning process of your OKR quarter is one of the most important periods for your team. If you begin by focusing on the wrong things, you’re going to get the wrong results.
Strategy does not boil down to what projects you are going to take on within a single quarter. Instead, consider your organization’s three or five-year plan. Where do you want to see your organization go within this timeframe?
Work backwards from this vision. Break down your five year goal into annual milestones. OKRs are great for moonshot goals- think of your best case scenario or your most ambitious goal for your organization. Then, create ambitious, aggressive goals to help make it a reality. Considering your strategy and vision is a vital part of writing high-quality objectives.
Your second step in using OKR as the alignment strategy is to identify the goal. Objectives determine your team members’ priorities for the entire quarter. Without an objective that reflects that most important goal for your quarter, it is not easy to strategize and align your team.
You will need to break down the objectives to every management or company level: corporate, department, team, and individual. OKR ensures your company is action-oriented and fully aligned around high-level company targets, such as the company OKRs. Everyone’s priorities within the company should stem from the goals set at the top tier of the organization. Then, even the newest hire is contributing to the most important goals in the company, right from day one.
3. Key Results
High-quality key results are created with a few rules in mind. Your list of quantifiable outcomes should always be between three and five, and they should be mutually exclusive– no overlaps– and collectively exhaustive. When you create key results that adhere to these rules, you can be confident that the completion of these key results will signify the success of your objectives.
4. Benefits When you follow OKR Best Practices for Strategic Alignment
The advantages of using the OKR framework correctly have made it popular among companies of all sizes and in all industries. The benefit lauded above all the rest is that OKRs help companies focus on what matters most. Leaders that create OKRs with their strategy in mind can have confidence that they are contributing time and effort towards what matters most.
Setting OKRs for each level of the company ensures that employees know what they need to focus on from day one of the quarter all the way to day 90.
With OKRs, all goals will be clear to every member of the organization. With an OKR software, you can have full transparency throughout your company so that each team’s goals are displayed for everyone to see. This helps keep employees accountable for their targets and ensures alignment.
This approach ensures transparency between management systems and ease in the communication flow. It helps put things in perspective.
When your team has the transparency and alignment they need, they become more confident in achieving their goals. Having an organized strategic approach to setting and aligning goals reduces the time it takes to properly execute goals and eliminates confusion during execution.
In staying organized, your company can better track progress on annual and quarterly goals at every level of your organization.
The simplicity of the OKR framework allows for maximum productivity. The projects and tasks each employee should prioritize are always clear, because the objectives and key results for each level of the company are necessarily clear.
This means less time trying to coordinate with managers and team members, and more time actually getting work done. The OKR framework has also helped companies increase their productivity. Not only does this framework help cut down on planning time, but employees can also see how their everyday work connects with higher-level initiatives via strategic alignment. Employees tend to become more motivated when they notice how their work matters to the organization.
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Strategic Alignment and OKR Execution
At this point, your company has identified your crucial goals, ways to implement are in place, and finally, the goal has tangible outcomes that can be used to measure success. Now it is time to put theory to action. The key to OKR strategy implementation is to consistently communicate, refine, and reevaluate goals.
The OKR framework can open up lines of communication within your company. There is room to reflect on the goals not achieved and provide a better approach for the next quarter. If your team makes a habit of checking in on each other for a certain goal creates an atmosphere of openness.
Because OKRs are strategically aligned, each employee can understand the role they have to play and can ask for clarification. It is easier for you to pinpoint the cause for successful goal achievement and a failed one. You will encourage behavior that brings success and work your way around those that don’t work with your team.
Unfortunately, aligning goals once and then taking a hands-off approach to management isn’t the best way to ensure success. That’s why the OKR framework encourages weekly check-ins and periodic meetings that help teams refine their alignments and account for any lagging targets.
Leaders should provide consistent and constructive feedback on goal execution, and team members should be ready to take an agile approach to their execution. Staying aligned is a weekly effort, and it is necessary to ensure success.
Reevaluation takes place at the end of the quarter. Your team will look back to learn what to implement for the next OKR. A general review of the quarter and the progress will give an idea of what goals to set next. During this time, it’s important to check if your team was able to stay fully aligned throughout the quarter. If not, find out why, and get ready to make the necessary adjustments in the next quarter.
OKR is an efficient method to align your team with regard to the company’s strategic goals. Industry-leading companies use this framework for a reason– it doesn’t complicate success. In fact, it simplifies it. With OKRs, your team will have clearer paths to achieve the company goals.
OKRs can help you and your team maintain full strategic alignment throughout the quarter. Want to find out more about how an OKR management software can help you stay aligned throughout your quarter? Book a free demo with the OKR experts at Profit.co today and learn how Profit connects your high-level strategy with quarterly OKRs and daily tasks– all on one intuitive platform.