Let’s take a step back. Before we dive into how to use the OKR framework let’s look at why and how using OKRs will help your organisation grow. By setting OKRs, you’re focusing on the priority projects which will help to fuel your business growth. They also allow you to improve cross-functional communication and strategic alignment.
OKRs are all about growth. Here at TBG, we always advocate that OKRs should only be used for growth, change or innovation projects and not for day-to-day business activities. One common misconception is that OKRs can and should be used across every team and every function. Today we explore this concept and offer alternative methods to help support your run rate activity.
OKRs vs KPIs
Fueling organisational growth is what the OKR goal setting process is all about. OKRs shine a light on the priorities and activities that will enable growth. This is important to note, as many organisations try to create too many OKRs for every member of the team. Therefore, floodlighting rather than spotlighting on the key growth initiatives.
Whilst growth, change and innovation projects are exciting and lead to growth it’s important not to take your eye off the ball when it comes to business as usual activity. Your business as usual activity forms the solid foundation for OKRs to be effective.
KPIs are a great way of monitoring your business as usual activity, and also allow you to track whether a KPI potentially needs to be given OKR focus if it is failing or needs adapting to ensure future growth. For example, if one of your KPIs is organic visits to your website per month, but you see a significant and sustained dip in the performance of this KPI it might be time to give it some more dedicated focus in the form of an OKR.
How to set business goals that push boundaries
When it comes to growth it’s all about pushing yourself and your teams to go the extra mile. We’re talking stretch, to achieve real growth your teams must be striving for goals that stretch them rather than keep them comfortable.
Focusing on stretch when setting team goals and OKRs encourages your staff to think differently and creatively to try and achieve the stretch you are looking for. Typically, we define a stretch goal as one that is intentionally difficult to achieve. These are set alongside regular business objectives to encourage growth.
Creating a work culture that encourages stretch & growth
As we’ve mentioned OKRs are all about focusing and stretching your teams to reach for the stars and achieve fantastic growth results. There are a number of elements you should carefully consider when asking your teams to go above and beyond.
A collaborative, positive work culture is essential for OKR success. Without it, your team will not feel comfortable enough to step outside their comfort zone and strive for growth. In order to find out whether your internal culture is ready for OKR implementation you’ll need to consider the following points:
- Do your teams feel safe enough to stretch or is failure not an option in your work environment? Your teams need to feel safe enough to fail, if this isn’t an option in your workplace, teams are naturally going to include less stretch when they set OKRs.
- Don’t link key result success to compensation payments. By linking key result success to compensation or bonus payments you are encouraging a lack of stretch as team members will want to achieve their key results 100% of the time.
- Create an organisational culture where your teams feel safe enough to share their worries and confidence levels when it comes to OKR projects. You don’t want to reach the end of an OKR cycle not knowing that your teams needed support a month ago to help them reach their key result.
By providing a safe work environment and space where your teams can collaboratively share their thoughts and ideas, you are encouraging a spotlight on business growth strategies and offering them a safe environment to deliver on those projects.
Use OKR reviews to monitor your progress
It’s not enough to set OKRs, sit back and wait for your business to magically grow overnight. You’ll need to carry out regular check-ins as part of the OKR goal setting process to ensure that your business stays on track to achieving its goals. Fortunately, OKR reviews can help you to do just that.
This involves using confidence ratings to assess how close or far away you are from OKR completion. Your team members can lead this review process with the right OKR training, or alternatively, you could implement OKR software within your organisation to provide company-wide visibility on your progress.
Some of the world’s leading organisations are using OKRs to help them achieve consistent growth. This includes the likes of Google, Spotify, Amazon, Slack and many more successful global brands. Want to join them? Get in touch with the team to start your OKR journey.