Objectives and Key Results (OKRs for short) are changing how companies define and communicate success. Why not have a read through our free beginners guide to OKRs to get more information on how you can align and grow your company.
The big difference between old ways of managing performance and OKRs is the shift from an annual event – the often-dreaded annual appraisal – to a routine which can benefit both the people who do it and the business it is part of.
Establishing the ideal routine is vital and it must have the right “fit” with your business. A business with a fast-paced sales environment might need daily check ins, one with a more consultative sales approach might only need them weekly or fortnightly. You shouldn’t just gear it around sales though, major international logistics businesses like TNT have them every couple of hours! You’ll know the pace of your business and what works best for you. Don’t be worried about varying the drumbeat from one team to another. For instance, finance might be not quite so fast-paced as customer services.
Most of the high-growth tech businesses I’ve worked with have gone for a weekly routine. They kick the week off with a focused Monday morning check in. This works best when they have a template to discuss. This usually covers progress and confidence against team OKRs, the top “health” metrics of the business, and an agreement on priorities for the week.
When Friday afternoon arrives, they get back together to see how they’ve done. This is when they make sure they learn from what’s not gone to plan, and share a beer over what has. This celebration is vital, as it’s great for the team to feel achievement.
The weekly drumbeat is all about making sure there’s momentum and OKRs are on track. Bbut what about how long an OKR should be set for?
This is where your OKRs “cycle” comes into play
Your cycle is how long you set your OKRs for. Now, keep in mind that OKRs should be ambitious, and a little daunting at first. If they can be completed in a week or a month, they’re probably not that stretching. The businesses I work with usually go for a quarterly cycle for team and individual OKRs, and an annual cycle for business-level OKRs.
Setting up your quarterly cycle gets you into a routine of reviewing and closing OKRs at the start of a new quarter, and launching new ones. This takes practice as it involves discussion at team and senior level. However, you should aim to have your new OKRs launched by the end of week two. Any later and you’re just eating into the new quarter, and focus across the business might be going off the boil.
One last thing about setting OKRs I often get asked (especially in sales teams) is how can you build in monthly targets to a quarterly OKR? Well, so long as it fits my criteria of what makes a good OKR, then try this structure:
Objective – Smash Q1 sales target for Tonka trucks
First Key Result – In January, sell 100
Second Key Result – In February, sell 130
Third Key Result – In March, sell 150
Your instinct will tell what the right drumbeat will be for your business. If it turns out that a different one would work better however, then change it! You make the rules, this is open-source performance management after all.
OKRs represent a performance management methodology which connects the work of individual employees to your company’s overall strategy. Looking to learn more? Read our blog ‘What are OKRS and how can they help my business?’