OKR Payoffs can be expressed using the acronym FACTS, and illustrated in the following picture.
A key guideline when practicing OKRs is to limit the number of objectives to 3-4 per person and limit the number of key results to 2-5 per objective. This guideline is in place to bring exceptional focus to what you are trying to accomplish. This also forces you to prioritize and pick the key results that matter the most at that point.
Again, by design, OKRs are public and available to everyone in the company. Because of that transparency, it makes it easier for employees to align with the appropriate objectives of others that they are either impacting or impacted by. When you are able to express alignments and are able to visualize them, every employee can understand and realize the impact they are having beyond themselves, or their teams, or departments.
While OKRs are set at every level of the organization, through dialog and discussions, every employee sets up their own OKRs. They do get assigned OKRs by managers, but for the most part everyone comes up with their OKRs. As documented in the IKEA Effect, every employee will show a lot more commitment to achieving their OKRs, since they came up with them.
This is one of those key differences between the traditional performance reviews and OKRs. You check in pretty much every week. You can use any kind of review methodology. The Progress, Plan and Problems (PPP) methodology is widely used and supported by Profit. Its very effective if employee checks in for all their OKRs and then complete their PPP assessment.
Assuming the features are of equal size, which of the following is better?
- Someone commits to delivering 3 features and delivers 4 features
- Someone commits to delivering 10 features and delivers 8 features
The answer is obvious.
However, traditional management systems encourage #1, while OKR encourages #2. If you achieve 100% of your OKRs, it most likely means that you are not setting aggressive enough targets for yourself. The ideal level of achievement is 65%.