Key Tips For Embracing The OKR Philosophy

How creating a clear framework for measuring goals helps companies realise their vision

Startup executives dream of rapid growth. Successful funding rounds, product launches and growing brand recognition make your company a desirable place to work, and before you know it, your 20-strong founding team has grown exponentially, reaching 200. Specialist teams support executives and bring their unique talents and capabilities to bear, enabling the firm to grow outwards in directions its founders had never anticipated. 
 

When the number of employees in a workplace grows so fast, companies face two main problems. Let’s call them alignment and accountability. The question of alignment is one of a shared vision: what are we all aiming for? Inculcating a workplace to adopt common goals is frequently time-consuming and while the concept might sound vague, it is essential to foster positive internal communication. Accountability, meanwhile, is the issue of who is responsible for what. How many times have you heard new and even not-so-new employees asking, ‘Who in the office is responsible for…?’? Now imagine how cacophonous those questions sound when 90% of the workplace has been at the company for less than a year.

Responding to the twin challenges of alignment and accountability requires a strategy. These issues can become very disruptive, very fast, if they’re not addressed with a holistic solution. Alignment and accountability are essential components of HR management, especially in companies focused on a specific issue, and company-wide OKRs are crucial as a means of achieving those goals.

OKR (Objectives and Key Results) is a framework for defining, measuring, monitoring and following up on objectives within an organisation. As a theory, OKR was introduced in the 1970s and 1980s and its methods were popularised at Intel, later being rolled out across a number of other leading tech firms. 

The basic format is very simple. You take an objective and say: I will do X, as measured by Y. The goal must describe both what you are going to achieve, and how you are going to measure that you have achieved it. The Objective is what you are going to achieve, and the Key Results are the way you’re going to know if you’re getting there. For example, an Objective can be, ‘We will delight our customers’, and one of the accompanying Key Results could be ‘increasing our Net Promotor Score to 75%’. When Google was using OKR while launching its first web browser, its Key Result was 20 million Chrome users within a year (which it didn’t achieve). But by revising its targets, Google targeted 100 million Chrome users within three years of operation – which it easily surpassed.

In order to work properly, Key Results must be measurable and must describe outcomes rather than activities. For instance, ‘Be nicer to customers’ cannot be a Key Result, because it’s not measurable. Once we make that goal a bit more precise, by saying ‘Reduce the number of complaints about customer service to less than one per week’, we have a measurable Key Result. ‘Spend at least five hours training the customer service team on using FooDesk’ is also not a Key Result, because it’s an activity rather than an outcome. We can make it into a Key Result by specifying the outcome: ‘Get no more than two support requests from customer service per week about how to use FooDesk’. That also empowers teams, because it gives them greater flexibility in determining how to go about achieving their aims, removing the need for micro-management.

OKRs have to be transparent. Everyone at the company should have access to everyone else’s OKRs and current results. When different teams are collaborating on a project, each team should have OKRs that can be clearly communicated across different groups, while quarterly reviews are also essential to ensure that OKRs are followed upon.

But the ‘what’ and the ‘how’ isn’t the whole story behind OKR. The ‘why’ is an essential component as well. According to John Doerr, who introduced OKR to Google and is considered the theory’s greatest advocate, ‘truly transformational teams combine their ambitions to their passions and their purpose.’ When running a company that seeks to offer incentives for embodying certain values, OKR can be used as a means of instilling accountability and encouraging teams to live up to their goals. 

A team of 20 employees isn’t too small to start rolling out OKRs. Once bosses bring new team members on board with the OKR methodology, individual employees and teams are can begin to build their own OKRs and spread them throughout their company. Companies can make OKR part of their routine, for instance by going over objectives and values at weekly kickoff meetings or by regularly talking through company-wide annual OKRs at team briefings. If you harness this methodology properly then you can inspire and motivate a team of exceptional people to achieve great things. You can keep creative energy aligned towards a common goal, and you can lay the foundation for a truly outstanding business.

Sam Fromson is the Co-Founder and COO of yulife, the company pioneering a new type of life insurance by encouraging holders to live their best lives. Sam trained as a rabbi, worked as an investor and led business development and operations at an alternative lender. He holds an MA from University of Cambridge in Material Science. Visit www.yulife.com  Connect Sam Fromson Follow @yulife