Getting everyone at your company to align around the same high-level goal can feel like a fool’s errand.
For a start, many younger employees are resistant to a top-down management style that imposes objectives. On top of that, most companies pivoted to remote working this past year, creating communication challenges. Finally, employees want to feel like they’re working towards professional development, not just pursuing company growth.
But this doesn’t mean fast-growing companies shouldn’t align their workforce around a common vision—far from it. They just need to make sure they take these factors into account when setting organizational goals.
That’s why many successful, fast-growing companies have embraced the OKR (Objectives and Key Results) system. In this post you’ll learn:
We’ll even throw in our OKR template to help get you started.
OKRs stand for ‘Objectives and Key Results.’ Put simply, they offer a measurable goal-setting framework to align employees around a central company vision.
Credit for inventing the OKR system goes to Andy Grove of Intel, where he pioneered the concept in the late 60s while building on the work of his predecessor Peter Drucker. Since then, giants like Google, Facebook, LinkedIn and Dropbox have adopted the system to help steer their growth in the right direction.
The concept of OKRs was born out of the observation that business outputs could be studied and improved scientifically—think of Ford and his process for building cars. So, what’s so special about the OKR system?
The OKR system recognizes employees should have a say in where their company should go, and how it should get there. This is a departure from the traditional top-down approaches to management, and is intended to empower workers and cultivate buy-in. This is particularly important for fast-growing companies.
Other than its ambitious and quantifiable aspects, another reason OKRs work so well for hypergrowth start-ups is its bottom-up approach. Research shows that employees—especially younger generations—need to feel that their personal opinion and development is taken into account at work.
Unfortunately, as effective as the OKR system is, most companies fail to make it work in practice.
There are a few common mistakes to avoid when implementing OKRs.
With these common misconceptions out of the way, let’s take a closer look at how we were able to roll out OKRs in a matter of months at 360Learning.
Two years ago, we found ourselves at the critical juncture of growing so fast that we needed an objective-setting framework better-suited to fast growth. We knew it was time to get serious about performance management, and decided to embrace the OKR system.
Our Director of Operations and McKinsey veteran led the charge. He used the following three-step system:
Even if your teams are familiar with the OKR system, they might not understand it in the exact same way. To get everyone on the same page, we devoted a course to understanding and writing OKRs during our employee onboarding process.
Every new employee must pass this course. To do so, they need to write their own, real-life OKRs for their first quarter at 360Learning—it’s a chance for them to put into practice what they learned in theory.
People often go through their weekly to-do list, only opening an OKR reporting file once a month—or less—to scribble some disconnected progress notes. This is a missed opportunity. Instead, it’s essential that the OKRs are embedded in your team and company culture and anchored in daily activities.
At 360Learning, this meant integrating our OKRs into our tech stack of tools:
This circles back to point one: educating all newcomers about OKRs at your company. But what about your existing employees? What if you’ve been using another kind of goal-setting framework all this time, or none at all? To gain buy-in and limit resistance, you’ll need a change management plan.
For us, that meant going slowly and providing results step-by-step. We launched a month-long pilot program before implementing the system in earnest, and we made sure to communicate the observed benefits loud and clear to everyone.
So, that’s our process for how to introduce OKRs at a high level. But what about the nuts and bolts of actually defining these OKRs on an ongoing basis?
Here’s the approach we took for writing OKRs that made sense for our business:
This is the most top-down part of the whole process, but it’s necessary to ensure global alignment. Your board, CEO, and other C-suite members should communicate their high level objectives for the company.
For example, this might be: ‘become the best project management software in the United States,’ or ‘help businesses reduce their carbon footprint by 50% in the next decade.’ This company-wide vision will be the bedrock for the rest of your OKRs.
We added this extra step to try and narrow the gap between objectives at the company and individual level. ‘Team objectives’ are, as they sound, the goals for a certain department. They should answer the question: where do I want to go? For instance for a SaaS marketing team, it could be, ‘crack the APAC market within one year.’
There should be a strong bottom-up element to setting team objectives. Team members should be encouraged to suggest their own ideas, and work with their manager to settle on the right ones.
Just like team objectives, these should answer the same question—but on an individual level. Again, a bottom-up approach here is key. If we follow the same example as above, an individual objective could be, ‘grow the team by 50% in Q2’, ‘establish our brand narrative within 6 months,’ or something similar.
As opposed to objectives, key results are by definition quantifiable. Objectives answer the question, ‘where do I want to go’? Instead, key results answer the question, ‘how do I know I am there?’ That could be, 'reaching the top ten spot for an SEO ranking,’ ‘generating a certain amount of leads within the quarter,’ or ‘boosting website traffic by 30% in a given month.’
This was another step we added to make our objectives even more granular and straightforward to execute. An initiative answers the question, ‘what do I need to do to reach a key result?’
Each person should have a small list of projects that are independent and can be delivered in a short period of time (a week or two, max). Good examples would be: ‘Post four blog articles a week,’ or, ‘host three webinars per quarter.’
The most granular piece to the OKR framework are daily to-do lists. These are the everyday activities you can keep track of on Trello (as we do) or whatever tool you have in place, to accomplish your initiatives.
The main thing to remember is to keep your objectives qualitative and aspirational, and your key results quantifiable. This way, you have the freedom to iterate on your initiatives and to-do lists to make sure they’re contributing to acing your key results.
Though OKRs should be a top-down as well as bottom-up exercise, managers have a key role to play in facilitating buy-in and making sure the OKRs have a positive impact on your company’s performance. Here are a few tips to get this right.
As we’ve seen, creating buy-in for the OKR framework is key. Managers play a big part in promoting this buy-in. Instead of just ‘announcing’ there’s going to be a new goal-setting system in town, involve your teammates in a more collaborative approach. Try and get a discussion going, and offer full transparency and opportunities to share ideas.
Employees want their business to do well, but they also want to reach their own personal or professional growth goals. Ideally, OKRs are aligned not only between company and team objectives, but also between professional development goals for individuals. As much as is possible, open this line of discussion with your team.
Many of these types of discussions about OKR ideas and professional development will happen during your one-to-ones. The more productive these meetings are, the more likely you are to write better OKRs that stick and promote company growth. Your direct reports are the experts on their scopes, so let them lead. Structure the meeting and take notes to help you stay focused and aligned.
The OKR system offers companies in all industries a way to set high-level goals and align every division, team, and individual for maximum growth. Unfortunately, a lot of companies don’t know where to begin with the OKR system.
The steps outlined in this post can help your business implement the OKR system and drive better organizational performance. All you need to do is adapt it to suit your objectives and the particular needs of your teams.
Thinking about bringing OKRs to your organization? Here’s our very own Google Sheet OKR template we use at 360Learning! Have a go—you might only be one task away from implementing the best goal-setting framework your company has ever seen.
For the true deep-dive, check out the webinar replay that inspired this article, below: