Hello Friends, Welcome to another article. In this article, we will provide a comprehensive guide to OKRs, including what they are, the history of OKRs and the benefits of using them.
What is OKR? Definition
The acronym OKR stands for “Objectives and Key Results”, a popular goal-setting methodology used by individuals, teams, companies and organisations to set clear and measurable goals and track their results. Its main usage is to connect company, team and personal objectives to measurable results. OKRs are typically set quarterly or annually and are reviewed and updated regularly.
OKR methodology is used by popular companies like Google, Linkedin and Twitter to help manage their teams and reach their goals. An OKR typically consists of Objectives, Key Results and Initiatives, and we will learn about them one by one.
What is an Objective?
An Objective is like a description of the goal that you want to achieve in the future. The characteristics of Objectives are that they should be specific, time-bound and shouldn’t be too technical so that everyone can understand.
Examples of objectives include:
- Increasing the Brand Awareness
- Launching a New Product
What is a Key Result?
A Key Result is the measurable outcome you need to deliver to achieve your objective. It breaks down your OKR’s objective into quantifiable metrics and helps you track the progress towards achieving your goals within a specific time frame.
For example, if your objective is to increase brand awareness, then the key results could include:
- Increase the website traffic
- Increase the social media followers etc.
What is an Initiative?
Initiatives are all the projects and actions you need to deliver to achieve one or more of the key results of your OKR’s objective.
For example, if your objective is to increase brand awareness, then possible initiatives include:
- Focusing on content marketing
- Launching social media campaigns to increase followers etc.
History of OKR
The history of the OKR can be traced back to 1954 when Peter Drucker introduced the MBO (Management by Objectives) methodology for improving organisational performance and published the book “The Practice of Management”. The MBO typically involves:
- Reviewing organisational goals.
- Setting worker objectives.
- Monitoring progress.
- Evaluating and giving the reward.
Later, in 1974 Andy Grove, CEO at intel, took the idea of MBO from Peter Drucker, upgraded it with the concept of Key Results, and invented the OKR framework. The main purpose of adding key results was to measure your progress towards the objective by breaking down the objective into quantifiable metrics, ensuring that the team is moving in the right direction to achieve those goals.
OKRs were quickly adopted by many other organisations and technology companies like Google, Oracle, and LinkedIn to help them achieve their goals and drive growth.
Over the years, OKRs have evolved to become an important performance management tool in many organisations.
Benefits of OKR
Better Performance and Increased Sales
With the current research, which shows the differences between the group of employees using the OKR technique and those not, those using the OKR technique have been significantly effective at their job and resulted in better performance and increased sales.
If you are searching for OKRs software, Fitbots is a great option to consider, which provides coaching, software, and certification and helps align and engage teams to outcomes that matter most.
Organisation wide Transparency and Improved Communication
For your company to run smoothly and have everyone working cohesively, it’s important to allow transparency and open communication throughout the entire organisation. OKRs make it easy to manage achievement and execution with greater transparency and improved communication.
According to the best practices, around 60% of OKRs should be set by team members rather than just the managers. This allows for a higher level of employee engagement and ownership, which in turn creates a stronger sense that everyone has personal accountability for their Objectives and is more motivated to achieve them.
A bi-directional goal-setting approach through OKRs connects employees with the company’s objectives, thereby increasing engagement. This allows employees to see how their individual efforts contribute to the organization as a whole, fostering a greater sense of ownership and helping to increase motivation and productivity.