OKRs help organizations understand what they want (objectives), what they need to do to have that (initiatives), and how to measure progress (key results)
Larry Page, the former CEO of Alphabet and co-founder of Google, publicly claimed in John Doerr’s book “Measure What Matters” that —
OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of 'organizing the world’s information' perhaps even achievable. They've kept me and the rest of the company on time and on track when it mattered the most.
To learn how to use OKRs for 10x growth in your company too, keep reading!
Table of contents
For the sake of simplicity, we will focus on a short definition of what is OKR. OKR stands for Objectives and Key Results (OKR), a popular leadership tool for setting, distributing, and monitoring short and long term goals and results that align organizational purpose with individual targets across all levels. OKRs are frequently set, regularly tracked, and modified periodically.
John Doerr, one of the most prominent venture capitalists, who introduced Google to OKRs, uses a simple formula for setting OKRs —
I will _______ as measured by _______.
I will (objective) as measured by (key results).
Typically, an OKR framework must have 3 parts to be effective — an objective, 3-4 key results, and a time period for achieving the results.
These constitute the qualitative goals to be achieved on organizational, team, and/or individual levels. Objectives must be aspirational, time-bound, easily understood, actionable, and qualitative.
For each key objective there should be 3-4 clearly defined measurable results that are difficult but achievable and quantifiable. Key results determine whether an objective has been achieved or not.
Former Yahoo CEO Merissa Mayer defines key results by their quantifiability —
“It’s not a Key Result unless it has a number.”
It’s useful to use a metric in key results instead of a binary quantifier. Key results can also be characterized by their levels of difficulty, thus acting as a milestone.
Key Results are often accompanied by a set of initiatives (what will I need to do to get there?) i.e. specific action steps that determine how to achieve Key Results.
Setting a time limit to Key Results and initiatives helps teams keep track of progress on an ongoing basis. Team/departental OKRs are usually set and re-evaluated quarterly to keep it aligned with annual business goals. Whereas, individual OKRs are usually re-evaluated weekly.
Here are some OKR examples for different departments that meet specific business needs.
Having predetermined key results in place gives clarity about how exactly a goal will be achieved, leaving little to no room for confusion. Thus, guiding everyone involved on to a clear course of action.
Here’s what typical OKRs look like for product management, customer success and finance teams.
Setting OKRs can be a quick process, but it requires deliberate planning. Here’s a consolidated list about the characteristics of effective OKRs for any team —
The reason why more and more organizations are moving toward an OKR-based framework is the flexibility of OKR systems. OKRs use shorter goal cycles. It breaks down yearly company goals into quarterly, monthly, or weekly measurable goals. It enables team members to work on projects that make the most impact to the business in that week and pivot at a moment’s notice without additional loss of resources. Thus giving organizations the opportunity to quickly respond to internal and external changes and adapt their processes faster.
Intel contributes their microprocessor win against Motorola to the OKR based model of strategy execution.
The purpose of setting OKRs is to simplify organizational visions into understandable action steps. OKRs thus reduce the time spent on setting goals and utilizing the time and effort toward achieving that goal.
OKRs should be simple, not easy. They should be a stretch to an individual or a team’s ability, but they should not be too complicated to understand. (See the OKR examples above to check how simple OKRs can look like for any department)
OKRs are for creating alignment on an organization level. For most companies, everyone’s OKRs are accessible to everyone else’s. Thus, making the achievement of goals a clear, transparent, collaborative process.
It is useful to brainstorm with team members before setting team OKRs. This instigates a sense of ownership in employees which in turn inspires them later to perform at a higher level to make sure the OKRs are achieved on time. So, give your team members the autonomy to find the right level of difficulty that challenges them and pushes the team for higher productivity.
The OKR framework is so compelling to organizations because it carefully combines all levels of business needs. It addresses long-term top level strategic business goals with short-term quarterly team / departmental goals. Which then can be further combined with more immediate individual weekly OKRs. Thus, OKRs ensure that at any point in time, all organizational effort and resources are aligned toward a specific vision.
OKRs are bi-directional. It requires top-down and bottom-up collaboration. The broader company-wide vision is set by top leadership. However, the team-wide goals are set by individual team members thus making this process a market-based approach toward setting goals. Thus, the OKR framework also utilizes 360° feedback. Typically, around 60% of OKRs are set in unison with managers in a bottom-up approach.
Ambitious goals are building blocks of continuous growth and expansion of an organization. OKRs are designed to stretch individual abilities to an extent where higher than expected performance is the norm while keeping in mind that overly aggressive goals might lead to frustration and fear of failure.
Moonshot OKRs are great for the goals you believe you can’t reach (yet). Thus, making sure your team is always leaving their comfort zone while ensuring realistic expectations from each member.
Google describes moonshot stretch goals to be a fundamental work philosophy in their 10th point of Ten things we know to be true —
“We set ourselves goals that we know we can’t reach yet, because we know that by stretching to meet them we can get further than we expected.”
Every OKR should directly add value to business results. Wasting resources on low-value projects especially under tight budgets can be highly consequential. Therefore, choose OKRs that provide real tangible value to the business.
Also, be mindful of underutilized resources. As OKRs are ambitious by nature, if a team can achieve 100% of their assigned OKRs without using the entire team’s bandwidth fully, make sure to raise the bar.
As OKRs are aspirational, it is important to use OKRs as a management tool and not as an employee evaluation tool.
For stretch-goals, usually a 70-80% achievement is enough to ensure rapid business growth. In such a scenario, if compensation is dependent on 100% goal achievement, it would only result in decreased morale and increased stress in employees. Instead of financial rewards driving performance, let the aspiration and autonomy behind OKRs drive intrinsic motivation that pushes employees to take risks and reach for high performance.
The benefits of setting clear, specific OKRs is manifold. Right OKRs can supercharge the performance of an organization within a short period of time by optimizing operational inputs.
OKRs are always verifiable. It is a transparent way of announcing what everyone in a department or organization is working on. Objectives and Key Results are indicators of progress. It creates clear personal and public accountability for the achievement of an objective thus pushing employees to higher levels of performance and reduced wasted efforts.
OKRs aid in clear communication by making the goal setting process more focused and disciplined. Objectives and Key Results let employees know what is expected of them in a given period of time. OKRs also communicate what’s not important. Thus enabling managers to allocate resources for the right things.
OKRs connect individual efforts with departmental and team goals which is further connected to organizational vision by another set of OKRs. It makes strategy accessible to everyone within the organization in the form of daily tasks.
When employees have clarity about their roles, assignment, and purpose, and are willing to take risks, set audacious goals, and perform at a higher level, the business thrives.
Unlike any other goal setting model, OKRs transform output-based culture into outcome-based culture. Which in turn creates a culture of accountability, focus, and continuous feedback and builds a highly engaged workforce.
Getting started with Objectives and Key Results is easier when there’s a system. Many organizations prefer an unified platform for this purpose to make setting OKRs a seamless process. However, even if you choose to do it yourself, here’s a few things that will help you set the right OKRs for your business.
Objectives and Key Results help organizations convey strategy in such a way that everyone throughout the organization knows what they need to do to make it happen on time. Setting OKRs requires a permanent mindset shift on all levels — from executives to employees — on how they see, distribute, execute, and measure their work.
Usually, organizations have one person responsible for implementing and managing OKRs. They are assigned the job of making sure that everyone understands the OKRs, is properly trained on how to work on OKRs, and knows how to optimize performance for maximum outcome. This person, often called the Ambassador or Chief of Staff, is responsible for the distribution of the right resources.
Decide on how productivity will be measured on an ongoing basis for each Key Results. Weekly check-ins with managers help in pivoting tactics as early as possible. Instead of just asking for a quantitative progress report, try to understand their attitude and confidence toward the goal.
To make your Objectives and Key Results agile, you need to have a system (preferably a software or tool) in place that helps you shift your OKRs as and when needed. OKR revision is generally done mid-quater. Having one unified platform for all OKRs also helps in revising retrospective OKRs, recognizing patterns, and optimizing for the future.
Company-wide goals usually take an annual approach, while team / departmental goals require quarterly cadence to remain effective in an agile environment. Spotify is known for setting 6 month cadence for strategic OKRs and 6 week cadence for tactical OKRs.
Next step is to find an overarching company-wide goal for your organization. It’s the ultimate goal that would decide every successive Objective and Key Result and activities within the organization. Once the company-wide vision is clear, it’s time to break company strategy down to company OKRs i.e. 3-4 specific targets your company must achieve within the next year.
It is important to have representatives from all levels while setting company OKRs. This ensures that company OKRs are feasible, strength-based, and realistic. It also helps the management to understand what resources and support they need to provide their employees to achieve those OKRs on time.
Team OKRs are how each team ensures that the company reaches its business targets for the year. This is where strategic goals are aligned with individual tasks. Team OKRs are set quarterly by team managers with direct inputs from team members and other teams’ leaders. Team OKRs are usually evaluated bi-weekly. Not every company OKR needs to be reflected in every team’s OKRs. It’s possible and natural that one department caters to one specific company OKR.
The primary purpose of Team Objective and Key Results is to help all employees stay focused on their goals despite the distraction of urgent, impromptu work needs.
Individual OKRs are usually the initiatives that each individual team member must complete on a weekly or bi-weekly basis to keep efforts in alignment with company OKRs. It is important to remember that OKRs are not checklists. Weekly, individual OKRs are only for high priority tasks and should not exceed 3. Having clear weekly targets help employees say no to unimportant tasks whenever they need to.
Weekly check-ins are effective tools to continuously track progress on each Key Results and pivoting, adjusting wherever necessary. However, make sure not to make these check-ins as performance evaluation meetings. Scoring progress weekly does nothing for value-based OKRs other than stressing out employees. Focus on measuring progress, removing operational roadblocks and improving results during these check-ins.
Setting and tracking OKRs is a strategic exercise that ensures all tactical and operational Objectives and Key Results point in the direction that individuals and teams must take to achieve organizational mission. Setting OKRs is simple, but not easy.
While rolling out OKRs make sure to avoid these common OKR mistakes for maximum results:
Individual employees are the ones who directly execute business strategies. They know what is actually ambitious yet sustainable based on their own and team’s strengths and weaknesses. Setting bi-directional OKRs help businesses merge executive visions with bottomline operations.
When employees are allowed to set their own OKRs, they are encouraged to think creatively and take calculated risks. Cascading OKRs carry a risk of putting everyone inside an agenda in a highly agile business environment leaving no room for feedback and/or innovation. Thus, limiting opportunities for growth and transformation within the organization.
Don’t use OKRs as a simple task management tool — a never ending to-do list that never gets completed. It is important to measure and allocate resources to what matters most. Each objective in an OKR should only include no more than 2-5 high priority key results. Any more than that and you would end up diluting your resources for minimal results. A general rule of thumb is to ensure that every team member knows their OKRs by heart at all moments.
Key Results must be well thought out. If there’s insufficient Key Results for each Objective, it could lead to unforeseen miss on that OKR. Thus, causing unnecessary delay. Having carefully planned Key Results also helps to understand resource requirements and to correctly estimate how long it might take to complete the project.
The purpose of OKRs is to find strategic, tactical, and operational alignment of efforts. This is why OKRs must be transparent to and aligned with every team, department across all managerial levels. Having company and team Objectives and Key Results in public is a great way to let everyone know how and where their contributions fit into the bigger picture.
OKRs should be a stretch to organizational capabilities. If it is too easy, you will end up forgoing opportunities to grow and underutilizing resources. And if it is too difficult, you will end up stressing or demotivating your employees.
SMART goals are defined as Specific, Measurable, Achievable, Relevant, and Time-bound goals.
The primary difference between SMART goals and OKRs is that the principles of SMART goals only allow to craft the chief objective. They provide the answer to “what should we aim for?”. Whereas, OKRs, on the other hand, give clear and specific directions on where and how to allocate resources to make sure the primary objective gets done on time. OKRs provide the answer to “what should we aim for and how do we get there?”.
Secondly, SMART goals are best for setting individual or the primary organizational goal. While working on day-to-day tasks, employees often lose sight of the bigger picture to understand how their work connects to the bigger purpose. Objective and Key Results framework prevent this by strategically connecting individual and the overarching organizational goal with team and departmental goals. Thus, OKRs help employees to work together in alignment with business strategy at all moments.
Third, SMART goals do not provide a roadmap for continuously tracking progress or the lack of it. OKRs are more insightful to measure performance and build accountability.
Pro-tip: Instead of choosing one or the other, always set OKRs and make them SMART.
Many people confuse OKRs with KPIs. However, OKRs are forward-moving, fast-changing milestones that an organization seeks to achieve in order to excel. Whereas KPIs are generally standard benchmarks for gauging performance over time.
SUPER TIP: To learn more about how KPIs and OKRs differ from each other and how you can use them together, read this.
Objectives and Key Results are critical for organizations to clearly distinguish between strategy, tactics, and operations. It also helps everyone in the organization to clearly understand what they want (objectives), what they need to do to have that (initiatives), and how to measure progress (key results).
OKRs help organizations to stay grounded in reality while shooting for the moon, to plan for the future while staying focused on immediate goals. Setting OKRs requires careful planning but it takes far less time to do so than traditional goal-setting methods.
Don’t treat OKRs like new year resolutions that you set once and then forget. You must follow it up with all team members at regular intervals and make sure that resources are being used for the right things at the right time.
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The right compensation management practices and policies can make or break your employee experience. Of course, there is merit in linking compensation and performance to drive organizational success, it can lead to several questions and implementation problems as well.
Read on to get all your compensation management related questions answered.
Let’s start with the very basic question of why fair compensation is important and the merits it brings along. It is no surprise that if you are paid more and are compensated according to your efforts, you are likely to give in your 100% and stay with an organization longer. However, there are other factors that support fair compensation:
Thus, fair compensation as a part of compensation linked performance management has the potential to facilitate better employee outcomes such as engagement, experience and performance.
To make compensation fair and inclusive in all aspects, it needs to have a clear foundation. Most organizations have relied on performance reviews as a way of reflecting on performance as a means of compensation decisions. However, there are several competing views both for and against tying compensation to performance reviews.
Clearly, there are both sides to the story.
The most favorable outcome will be to keep performance as one of the parameters for compensation, but not the sole foundation.
Additionally, as one of the best practices, performance reviews can be conducted on a regular basis, where some are only developmental in nature and others can be tied to compensation management.
As discussed, focusing only on performance reviews for compensation management needs a relook. Working with growing organizations, we have curated a list of the top five performance and compensation management practices you can leverage:
Ensure that your compensation structure aligns with the market trends so your employees don’t feel underpaid and leave.
Provide complete transparency and clarity to your employees on what constitutes high levels of performance and what it will take to earn a raise or appraisal.
Have specific, well defined and measurable criteria for the compensation strategy to ensure that there is complete transparency.
Salary in hand or the pay check your employees receive is accompanied by a range of benefits that are a part of the compensation structure and cost to the company, but are often overlooked by employees. Make sure they are widely communicated.
Ensure that there is a base pay range for every role and profile with variable additions based on candidate competencies.
The idea of fair compensation and linking compensation and performance management, leads to a very interesting concept of distributive justice. On a broad level, distributive justice essentially focuses on ensuring that the compensation received by employees is fair and equitable and is based on objective and rational grounds which are uniform for all. Here are a few ways to ensure distributive justice:
Measure potential and market value of the employee in addition to experience and expertise to ensure distributive justice for high potential employees
Another interesting component of compensation and performance management that you must acquaint yourself with is pay transparency. Essentially pay transparency refers to how openly or freely employees within an organization can discuss their compensation with others.
This is not only limited to the check they take home but other perks and benefits they are entitled to. Invariably, many platforms today also enable individuals to anonymously share their salaries online and get insights from others doing the same. However, there are diverse views on when it comes to pay transparency for an organization.
Those who advocate for pay transparency believe that it can enable large scale impact for the organization across performance management.
However, there is a flip side to pay transparency too with some common pitfalls that need to be addressed proactively.
In the last section of this article, we will focus on how managers play an integral role in compensation and performance management and the best practices to guide managers to have effective compensation conversations with their team members.
Almost 58% organizations do not train managers on pay communications
This startling statistic clearly highlights how despite the apparent importance of compensation management, the focus on ensuring a seamless process is rather limited. However, organizations today can play a leading role in enabling their managers to have better pay communication and conversations by following these tips:
It is quite evident that compensation and performance management are intrinsically interlinked and if leveraged well, compensation has great potential to not only drive performance, but also facilitate engagement, retention and much more.
However, to ensure the same, you need to have a very structured, transparent and fair compensation strategy and policy. Furthermore, you must, don’t forget to invest in training your managers to bridge any gaps and constantly gauge and address employee pulse — to ensure fair compensation for all.
Talent development is critical for growing organizations which see the workforce as their biggest asset. Focus on developing their talent stack not only leads to a pleasant employee experience, it also augments the overall performance and productivity for an organization.
While you may come across many ways to facilitate talent development, leveraging the competency framework can help you move the needle very quickly.
Let's see how.
Before moving directly to how you can implement the competency framework, let’s quickly understand the 5 stages of talent development.
The first stage involves planning for your talent needs based on your organizational priorities and creating the position profile based on the skills, attitudes and other competencies.
Based on the position profile, you need to start attracting talent for the position. You can do so by spreading the word in the right networks, through job portal platforms, etc. The objective is to ensure that you are reaching out to the right network. You can also explore the right candidate for the position internally to considerably save hiring and training costs.
Once you have identified the right person, the next stage of talent development is extending the offer to the person after a thorough background check as well as a competency and expectation match. It also requires creating personalized onboarding plans for the first 30-60-90 days of the candidate’s journey within the organization. Read our guide to employee onboarding to learn more about onboarding do’s and don’ts.
The main focus of talent development starts with providing the right development and learning opportunities to your workforce. This can involve upskilling for both technical and soft skills, leadership building or any development intervention based on the need of the role and position.
Finally, talent development involves undertaking initiatives to retain your talent. While learning opportunities are important, facilitating engagement, wellness, motivation, etc. all contribute to employee retention.
If you are wondering how the competency framework aligns with talent development, you need to start by decoding what the framework actually stands for.
Put simply, a competency framework is a set of behaviors, skills, abilities and attributes that an organization considers imperative for creating a high performance culture.
The competency framework can be implemented at all stages of the talent development or the employee lifecycle within an organization. The idea is to ensure that certain core competencies are kept at the heart of the decision making that in any way impact the workforce.
Competency framework based talent development is very important for employee retention. Talent development practices when undertaken effectively have the potential to encourage team members to stay with the organization for long and at the same time become ambassadors to help attract high quality peers.
Here are the top reasons why competency framework based talent development matters:
Now that we have covered the basics of talent development and competency framework, let’s understand how leveraging the latter to advance the former can create a far reaching impact for organizations.
The first step is to create a competency framework which involves identifying the key competencies which will be instrumental in guiding all decisions around talent development. Depending on the nature of your organization, there can be categories within the competency framework that you seek to focus on. Your competency framework should focus on behaviors, skills and attributes which are critical for performance and overall success. The following steps can help you create a competency framework for talent development:
The responsibility of creating the competency framework is collective. It starts with involving the executive leadership to ensure alignment with the vision, people managers to ensure they are ideal for the culture you are trying to build and functional managers to ensure inclusion of right competencies for each role and position. Furthermore, involving those on the ground can be fruitful as they have the best idea of what competencies are critical and others which are good to have.
Once the competency framework for talent development is ready, the next step is to align it with your recruitment process to ensure precise and effective hiring. There are a few steps along the way:
The onus of implementing the competency framework during selection lies primarily with the HR team and recruiters who assess the candidates with different tests and assessments. Team managers and leaders also play a role in assessing functional competencies and fit.
Irrespective of whether an employee is onboarded before or after you have implemented the competency framework for recruitment, you need to ensure competency based performance management and development opportunities.
From a talent development perspective, the focus of the competency framework should equally be on developing employees for their next or subsequent role based on the specific competencies for the same.
The onus of aligning performance and development with the competency framework lies with team managers as they are best able to determine the performance gaps. Furthermore, employees with their managers can identify competency gaps for better performance and focus on the right learning and development interventions to bridge the same.
Finally, the competency framework must also impact the subsequent rungs of talent development where an employee moves up the ladder from one position to the next. Based on the organizational matrix and competencies for each level, you need to identify key attributes that differentiate one level from another and ensure the same is communicated to your employees.
In a nutshell, it is quite evident that the competency framework can inform and advance every stage of talent development for fast growing organizations. If you implement such a framework across the employee lifecycle, you will significantly reduce your chances of a wrong hire and will be able to nurture a workforce that aligns on the vision, goals and overall organizational culture.
A clear competency based talent development approach can help you achieve high levels of performance which is observable and measurable.
While most people managers are able to create a business case for setting OKRs as well as for the adoption of an OKR software by leveraging industry benchmarks and best practices, there is a need to explicitly decode the return on investment of using an OKR tool as well.
Unless they are able to clearly illustrate how the return achieved using a goal management software is greater than the investment, it becomes difficult to sustain the adoption and get long-term leadership buy-in.
Continue reading to strengthen your business case on the same.
Let’s quickly understand how the OKR framework is integral for an organization, especially high growth companies. Most fast growing organizations have competing priorities they need to focus on with limited resources at hand.
Therefore, simply setting goals by adopting a top-down approach without supporting parameters can lead to confusion and incompetence. OKRs help drive away this ambiguity by linking measurable key results for each objective and facilitating a collaborative approach to achieving goals.
Here are the top three benefits of implementing OKRs in an effective manner:
OKRs enable employees and leadership to have a very clear focus on what needs to be accomplished and what work is out of scope. The idea is to have complete clarity on —
The last part is extremely important as it helps create a sharp focus and set priorities straight.
93% of employees don’t really understand what their organization is trying to accomplish in order to align with their own work.
This illustrates that there is a big absence of clarity and focus amongst employees when it comes to what needs to be accomplished, which stands in the way of creating a high performance culture. Therefore, OKRs can help reduce such uncertainty and ambiguity, making it easy for the workforce to concentrate on what matters.
Taking cue from the first point, the second benefit or purpose of implementing OKRs foris a need for clarity of expectations and overall team and organizational alignment. In case of fast growing organizations, there is an overlapping of roles and responsibilities and a lack of clarity on expectations from each employee. This leads to lower than average outcomes, productivity and revenue growth and data backs the same.
97% of employees and executives believe lack of alignment within a team impacts the outcome of a task or project. Whereas, companies that regularly exceeded revenue goals were 2.3X more likely to report high levels of alignment.
By ensuring organization-wide goal visibility, OKRs help teams to decode what is expected out of each team member and their respective contribution towards achievement of the shared goals. Thus, increasing alignment and collaboration.
Finally, setting and implementing OKRs is often a collaborative process. Employees get involved in and participate during the entire OKR process and feel engaged in the same. This greater involvement and participation leads to deeper levels of engagement and ownership of key results which drive impact.
OKRs also enable employees to also gauge their performance and measure their progress in an effective manner. This motivates them to get more involved in achieving the common weekly, quarterly and annual goals. This higher level of engagement directly impacts key organizational parameters such as retention, productivity, profitability, etc.
The business case for OKRs is very clear. However, for companies that are scaling up, with limited bandwidth and competing priorities, often setting OKRs itself gets left behind due to other business priorities.
If an organization focuses on a manual approach to the OKR system, there are several steps which require a lot of time and effort including setting and writing, implementing, tracking, grading, evaluating and modifying OKRs.
Fortunately, today there are OKR tools in the market, which can help automate all of these aspects to help simplify the OKR journey. The right goal management software can help you maximize the realization of the return on investment for your OKRs. Following are the top five ways in which an OKR software makes a measurable difference on the bottomline —
First, an OKR tool can help organizations document or record the OKRs in a way that is visible and accessible to all. There is supporting evidence to show that what gets documented has a higher chance of being achieved, as what is out of sight is often out of mind.
Individuals are 42% more likely to achieve goals when they are physically recorded.
Therefore, the OKR tool can enable organizations to clearly define the business and team OKRs in a written manner which can be reflected on, seen again and again to create instant recall for employees.
OKR tools are great for creating alignment and accountability. On the alignment front, the OKR software can help achieve high levels of strategic alignment on what is the responsibility of each team member across organizations towards the key business goal achievement.
Highly aligned companies grow revenue 58% faster and are 72% more profitable than their misaligned counterparts.
The dashboard of a good OKR software can help you constantly gauge the level of goal achievement, ensure that team members are aligned on different phases as well as keep a track of when their responsibility is due. It creates high levels of transparency.
Moreover, greater alignment leads to high levels of accountability. Generally, since there is a lack of alignment on responsibilities, there is an accompanying lack of ownership and accountability, and most employees shirk away from taking accountability.
84% of the workforce describes itself as “trying but failing” or “avoiding” accountability, even when employees know what to fix.
A goal management software like SuperBeings allows you to integrate OKRs with regular meetings and check-ins to keep track of progress. Thus, driving a culture of accountability.
It is very common for companies to set OKRs and then evaluate them only at the end of the quarter/year. There is a lack of mid-term tracking which makes it difficult to gauge whether the progress is aligned with the key results or not.
40% of people that write down goals don’t check whether they’ve achieved them. Moreover, only 5.9% of companies communicate goals daily.
An OKR software can help you address this concern by facilitating day-to-day OKR progress tracking. A daily dashboard and history of 1:1 and team check-ins on OKRs, can help organizations track developments over time.
It can also help identify and resolve any performance issues that stand in the way of goal achievement preemptively. At the same time, even if organizations are tracking and monitoring OKR progress, doing so with a manual process is inefficient. An OKR tool can automate most of these processes to enable HR and people managers to spend more time on driving results.
Another major concern that organizations face when it comes to OKRs is being prepared and ready for the same. Many line managers and others struggle with writing effective OKRs. Many organizations believe setting OKRs once is enough. However, that is far from the truth.
Research says, companies that set performance goals quarterly can generate 31% more returns than those reassessing annually.
Using an OKR software can help eliminate all these challenges.
Finally, an OKR software can promote high levels of collaboration for goal achievement. For many organizations, the inability to collaborate leads to low levels of results, diminishing the ROI for OKRs.
86% of employees and executives cite lack of collaboration or ineffective communication for workplace failures.
Using a good OKR software makes collaboration seamless by aligning cross-functional projects and tracking cumulative progress. Invariably, an increase in degree of collaboration is a direct ROI of an OKR tool which can create far reaching impact.
In this final section of the article, we will talk about the key parameters that can help you gauge the ROI of an OKR software. While the above mentioned are primary impact areas, most of them have a qualitative aspect to them.
Gauging the ROI requires backing of data points from employee experience and business results, which the following parameters can help explain.
Organizations should start by gauging whether or not transparency and alignment on goals has increased. This can be measured using employee pulse surveys to understand their opinion on how well they have visibility of goals and clarity on what they need to work towards. Therefore, the first ROI parameter for an OKR software is to identify the increase in level of transparency to ensure everyone is working in the same direction and there are no gaps or overlap in efforts.
The main purpose of an OKR tool is to facilitate the effective and efficient achievement of the goals set by an organization. Thus, the next parameter to measure ROI should revolve around the degree and time period of goal achievement.
You can start by comparing the degree of goal achievement by leveraging OKR grading to see if there is a significant improvement in percentage terms as compared to pre-OKR tool period. Second, it is important to gauge whether or not the goals/key results have been achieved in a shorter period of time or not. Since the OKR platform facilitates better alignment, collaboration, tracking, etc., it can help organizations achieve or realize the goals faster.
Third, there are several administrative overheads that accompany the setting and implementation of goals/OKRs. These include tracking, grading, etc. for managers and providing inputs on the part of employees. The ROI of an OKR software can be gauged by mapping whether or not these overheads come down.
The next parameter for ROI calculation is to measure the change or increase in revenue after the adoption of an OKR software. Since an OKR tool seeks to enable organizations to achieve their goals faster, cost effectively and to a greater extent, there should be an increase in the revenue realized.
According to Larry Page, co-founder, Google claims that “OKRs have helped lead us to 10X growth, many times over.”
Finally, gauging the value of employee parameters like retention/turnover, productivity, engagement, etc, can cumulatively be leveraged to capture the ROI of an OKR tool. There are several ways to gauge these workforce parameters, along with factors like eNPS, etc. which have a direct business impact. Calculating them can help measure the ROI of the OKR tool for an organization.
It is evident that adoption of an intelligent OKR software is not only good to have, but integral for organizational success. Using the right tool has a direct business impact which can be measured in numbers using the ROI parameters mentioned in this article.
There are both qualitative and quantitative aspects to measuring the ROI and a balanced approach to both can empower organizations to align individual performance with business goals.
If you are considering implementing the right OKR software in your business, try out SuperBeings free 21 day trial. Book today. (No credit card or commitment required)