The OKR method has been proving a highly effective way to structure and achieve objectives since the 70s — and its methodology is particularly useful for finance-related fields and departments. Whereas other fields and departments like customer service or marketing may have measurements that are more abstract, and therefore less conducive to creating measurable and trackable metrics, finance departments are great candidates for the implementation of an OKR due to requirement of extensive number crunching and various KPIs. The department which accounts for profitability and revenue for the entire business demands utmost scrutiny. It becomes very essential to measure what really matters.
Let’s look at an example of a finance OKR:
- Objective: Reduce Tax Liability
- Key results
- Increase Tax advantaged investment from 70% to 100%
- Decrease current liabilities from 40% to 10% by the end of quarter 3
- Decrease Depreciation Cost from 40% to 60%
Finance departments have to assess and gauge the expenses, revenue, and cash flow of the company as a whole. Consequently, they have to be accountable for analyzing the financial health of individual departments. This process is made simpler with OKRs and OKR software.
Here’s an interdepartmental Finance OKR example:
- Objective: Improve the budget finalizing process
- Key results
- Finish reviewing and approving departmental expenditures by next week.
- Decrease redundant expenditures by 85% by the end of quarter.
- Review and finish compensation agreements by the end of the quarter.