OKRs for Operations Teams

Operations departments (supply chain and warehouse) can make excellent use of the OKR method from the broadest and highest-level implementations right down to the individual team member. The OKR method requires the use and application of measurable, trackable progress indicators, and operations processes are highly conducive to identifying objectives and key results well-suited for OKR. Here we will have a look at few examples as to how your operations department can make use of OKR from the top down.

At first glance, customer care may not seem particularly conducive to the OKR method. OKRs require the identification of quantifiable, measurable metrics and metrics in order to implement key results that can be regularly tracked and reported upon. So how does your customer service department quantify something as abstract as satisfaction?

Though it may seem too abstract, in reality, there are myriad ways for your customer service department to make good use of the OKR method. By identifying the company’s overall purpose, mission and vision, your customer service department can identify areas that can, indeed, be quantified and therefore conducive to the OKR. Here we will examine a few ways to do so.

Example #1: Increase Customer Satisfaction

Let’s start with the most obvious and relevant objective. The people you place in your customer service departments are deliberately chosen for their ability to communicate with — and often to placate — the customers who communicate with your company. Given that customers often contact companies for the purposes of resolving an issue or getting their questions answered, it follows that customer satisfaction is the driving force behind the people you place in customer service.

So for the purposes of developing an OKR, what does that look like on paper? Maybe something like this, to start with:

Objective: Increase customer satisfaction.

  • Key result 1: Implement a customer satisfaction survey prompt to every call via the toll-free line.
  • Key result 2: Increase customer retention from the previous quarter.
  • Key result 3: Gather and analyze data as to the most frequent reasons customers contact with an issue.

All of these key results can be quantified, measured and tracked, and serve to focus your customer service department’s energy toward a unified objective.

So, you can start with what is shown above and slowly move over to a structured OKR like the one shown below:

Example #2: Improve Automated Customer Service Portals

Many customer service departments have reduced the cost of their service by employing the use of automated portals like phone lines and auto-generated emails. An OKR written to improve on those measures may look something like this:

Objective: Improve automated customer service portals

  • Key result 1: Conduct polls and focus groups to identify customer expectations.
  • Key result 2: Implement new online customer service portals for self-service options.
  • Key result 3: Publish new literature educating customers about their self-service options and how to use automated portals.

This OKR begins with a qualitative, somewhat abstract but still ambitious overall objective that specifies a clear purpose. The key results support the overall goal in various ways, and can be accomplished solely within your customer service department, or maybe better reached by collaborating with other departments like your research department for conduct focus groups, or your IT department to implement online solutions toward customer service.

One of the myriad benefits of the OKR method is that it can be customized to the needs of your company and the department to which it applies. Your customer service department can make good use of its OKR to improve the way in which your customers view your company as a whole.

At first glance, logic and reason dictate that the structure of OKRs make them a great tool by which to determine incentives and payouts.

The OKR method is a highly structured implementation that relies heavily on the identification and application of clearly defined, quantified and measurable results. The use of the OKR method must necessarily allow for regular tracking and reporting, and must necessarily involve reviewing the performance of specific departments, teams, and at times, individuals.

All of these things make the OKR method sound like a no-duh way to drive incentives for the people participating. So why is this one of the most frequently asked questions among management members and leadership?

Here’s the thing: the way that things look on paper and the way that things actually are, are frequently two very different things.

It’s a common mistake among leadership figures: it’s really easy to think that what is most logically sound and rational must certainly be what is best. But anyone in customer care would beg to differ: the element of human nature must always weigh into these matters, even when what you’re looking at is as concrete and quantifiable as a series of metrics.

In Reality, Your Incentives and Your OKRs Should be Related, but Completely Separate.

The OKRs that you establish within your company track measurable progress toward a goal, it’s true. But consider this: is on-paper achievement the only metric by which you gauge an employee’s effectiveness?

Every organization has created its own metrics for expectations. It’s the way in which we communicate to our employees what is considered acceptable, what’s considered a minimally required performance, and what is considered exceptional. We provide quantifiable metrics so that both the employee and leadership can gauge performance and identify areas of improvement.
For departments like sales, that’s easy and obvious. Bring in x in sales per week. Don’t bring in less than y. If you bring in more than z, you get a bonus. Simple enough.

But have you ever been around an employee whose numbers are always exceptional — but who drives his teammates away, to other departments or even to other companies? Or an employee whose metrics are pretty good, but who regularly micromanages her coworkers and employs the use of abusive language in inter-department email exchanges?
How much value do you place on the functional performance of an individual in conjunction with his on-paper performance?
This is not a new idea — individual performance management is an established system employed across myriad industries and organizations to gauge employees’ production in any department whose performance can be quantified in any way — which, really, is every department.

Leaderships establishes a baseline for each individual in order to clearly communicate what’s expected of the role, what is considered unacceptable and what kind of output warrants positive attention. This enables both the individual and the leadership in place to identify areas of strength and weakness so that the individual can be put in positions that leverage his strengths and receive training and correction toward reducing the weaknesses.

This should ideally be clarified on day one — right from the very start, every employee should be provided with robust and comprehensive information as to performance expectations in his role, and regularly updated when these expectations change. Every time that individual makes a lateral or upward movement, he should receive an update as to this information. It’s a basic function of leadership: to provide the education, information, resources, tools, and education everyone needs to be successful.
An employee’s individual, on-paper performance against metrics should account for a large portion of his overall performance. But really, it should only account for about sixty percent.

Because that’s just one part of a performance, isn’t it?

There are myriad other factors that weigh into how an employee really adds to the team or department to which they belong. Other factors that belong to a group metric referred to as functional performance may include how the individual communicates with his coworkers and leadership figures, whether he supports the overall strategy of his department or team, and how he behaves when presented with an opportunity to make a tough decision.

These aspects of performance are not nearly as neatly quantifiable as the metrics we use to write our OKRs — but they are just as important to the individual’s contribution to his team’s performance and overall function as a group. And these aspects of performance should account for about a quarter of how you gauge the individual’s overall performance.

The remaining factors toward gauging performance relate to how the individual supports the overarching mission and vision of your company as a whole. This pertains more to how that employee behaves on a personal level, both inside and outside of the work environment.

That might sound strange as you read it but reflect back on the last couple of months of business news, or even entertainment news. If an actress makes a very ill-informed public statement, well, her TV show may just be canceled overnight. If a company executive is discovered to have engaged in illicit activity, even on his own time and his own dime — that may very well cost him his job. So an employee’s behavior should account for a small part of his performance management as it related to your organization’s values as a whole.

The reality is, performance is a result of myriad factors, only some of which are metrics.

How an individual contributes to the progress of your OKR is a great indicator as to his job performance, and should certainly be accounted for when allocating incentives when the time comes. But your OKR should most certainly not be the driving factor as to how incentives are allotted. Your OKR can inform incentives — but should not determine incentives.

This is a lesson hard learned in many organizations that made the mistake of introducing the OKR method as an incentive-driving new implementation. What these companies then saw was human nature for what it is. Manipulated progress reports, sandbagged or sabotaged efforts, heated rivalries among teams that should be collaborative partners — some companies learned first-hand why OKRs should be separate from incentive programs and structures. Learn from other people’s mistakes.

Doing things right is important. But doing the right things is vital.


Doing things right is important. But doing the right things is vital.