OKR Methodology: What it is and How to Apply it

Category: OKR University.

What is the OKR Methodology?

OKR methodology is what an organization adopts to align the organization, teams and people working in one direction towards a common organizational goal. OKRs are used by several big companies like Google, Amazon, LinkedIn and Netflix, to name a few. Google adopted the OKR way within one year of its inception. While there are many reasons for the company’s success, Google attributes its success to OKRs.

kenneth-blanchard-Quotes

The key to successful leadership today is influence, not authority.

Kenneth Blanchard, author of The One Minute Manager

The OKR methodology tells users where they want to get to (Objective), how they can get there (Key Results), and what they need to do (Key Actions) to accomplish that Objective.

How to Implement the OKR Methodology

To be able to adopt the OKR methodology, it is important to understand how it works and how it is structured.

These are the top four steps to help implement and get the most out of the OKR methodology:

1. Define an Annual Objective

Depending on your organization’s OKR strategy, step one is sometimes skipped. If it suits your organization, you can define an annual objective. This is going to be the ‘lofty’, overarching objective for every employee and team in the organization. While setting this objective, think about what the expectations are for the company for the next year. What achievements will lead the organization in the right direction and allow it to continue to grow and succeed? This objective should emanate from the company’s mission and vision.

2. Setting Quarterly Objectives

After the annual Objective or objectives have been defined, the quarterly objectives need to be established. There should be around three or four quarterly, high-quality objectives; these quarterly objectives act as smaller objectives that add up to ultimately attain the larger objective. Ideally, these smaller objectives should be more inspiring, and not so much driven by metrics.

Setting goals takes work. Brainstorming for ideas for goal setting can help come up with multiple objectives, and then choose the important ones amongst them by applying a prioritization process.

3. Defining Key Results

Once the goals have been prioritized and set, come key results. Defining key results ensures that you can measure your progress towards your goals. While defining key results, bear in mind that it measures success, and therefore, they need to be ambitious, which is why they must contain KPI metrics.

OKR-methodology

Why the OKR methodology works

Of all the productivity methods, strategies and systems available, the OKR methodology stands out as one of the better ones. Following are some of the indicators that the OKR framework works:

  • It is a tested method and known to have been successful in the past
  • It supplements performance management with quantifiable data
  • It increases employees’ sense of ownership and purpose towards work

1. OKRs are a tested method and known to have been successful in the past

It is a tested methodology that big corporate giants the likes of Google, Amazon, Microsoft, Intel, Netflix (to name a few) have adopted. It has been around from even before; it first came into the limelight in Management by Objectives by Peter Drucker back in 1954.

But it gained prominence when Google adopted it in 1999, a year after its existence.

2. OKRs supplement performance management with quantifiable data

While key result outcomes are meant to be ambitious, they can be indicators of performance. You should not use the percentage of a key result that has been completed, or OKR completion itself to measure performance— instead, use check-ins to see what kind of work and effort employees have been putting in. At the end of the day, it’s the quality of work that one puts in that brings profit and growth.

Having an OKR framework in place will ensure that teams and individuals are focusing on what truly matters for the organization, and they are closely tracking their progress. This makes it easier to review performance and progress. From every mistake made, there will be some learnings that emanate from following the OKR framework, that will help adjust the strategy and motivate the team or individual to keep trying and keep getting better as they go along.

3. OKRs increase employees’ sense of ownership and purpose towards work

The OKR framework allows teams to decide on their individual OKR, which gives them a sense of ownership and purpose in relation to work. This increased employee engagement motivates them to take responsibility and as a result, it encourages employee autonomy.

Since employees choose their OKRs themselves, there is more interest in and commitment to goals, and a higher likelihood that employees will accomplish their OKRs. But do bear in mind although employees choose their own OKRs, establishing them has to be a collaborative effort done with their managers and other teams within the organization

Examples of OKRs

Setting OKRs and managing OKR progress is one of the most difficult, and most rewarding aspects of this framework. Below are some examples of how OKRs are structured within a team.

For more guidance on how you can set OKRs in your organization, you can get started on Profit.co’s OKR management software for free today!

Annual Objective: Increase visibility and improve brand positioning

Advantages of the OKR Methodology

Following are some of the benefits of OKRs:

  • OKRs enable teamwork
  • OKRs help teams focus on what is truly important, and not just what seems important
  • OKRs help teams accomplish objectives in a structured and organized manner
  • OKRs help minimize crisis or unexpected situations

In Conclusion

It can be difficult to implement OKRs, but given how useful it is to organizations, one can safely say that OKRs are the key to success in today’s business world. Teams should be be patient when applying this framework within their organization, and follow the suggested guidelines so that OKRs can help them achieve more, more efficiently.

To learn how your business specifically can benefit from the OKR framework and Profit.co’s OKR management software, book a free demo with our team of OKR experts today!

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