The Road to Agile Business Best Practices For Adopting Objectives and Key Results (OKRs)

Business Strategy

December 20, 2020

The Road to Agile Business Best Practices For Adopting Objectives and Key Results (OKRs)

Leverage OKRs (Objectives & key results) to deliver better focus, accountability and transparency across your organisation, teams and individuals.

Companies today often struggle with a lack of focus around growth due to a myriad of reasons— new employees, different and conflicting priorities, shiny object syndrome, overwhelming operational workload, lack of (management) transparency, poorly defined organisation mission and vision (or lack of), etc. By introducing OKRs, startups and tech enterprises including Google have driven and accelerated on their business growth. You can now leverage this agile-centric management technique too. But with any new management technique, it takes time to take root; solidify before you should start thinking of scaling. In other words, think big, but start small.

Determine Organisation-wide OKRs

Before your team and you can start setting individual and team objectives, company objectives need to be set. At the end of the day, employees and teams are there to help company achieve its objectives. A fairly common approach is for your company to set both annual and quarterly objectives.

Annual objectives: The annual company objectives should be the most important and ambitious ones that will help your company fulfill its mission and execute against its vision.
Quarterly objectives: Once you have your mission, vision and annual objectives in place, defining the objectives for your first quarter should be pretty straightforward. Quarterly objectives should be aligned to annual objectives, but more tactical. For example:
1. Sales lifecycle in 15 days or lesser (Currently at 30 days on average)
2. Improve MQL (marketing qualified leads) by 25%
3. Deliver a new vertical (F&B) solution for busy restaurant operators

Derive Team & Individual OKRs

Once you have set the overall company mission and vision, including the annual and quarterly objectives for your company, what is now left is to see how your team will help achieve its company objectives.

There are three fundamental ways in which OKRs can be set below. However, most companies will end up using some hybrid of the three approaches since it is ideal to strike a balance between the need for managers to drive their teams, and the need of individuals to own their journeys.

Top-down: All objectives are set by a manager or a supervisor. In some cases, CEO sets the OKRs for the entire organization.
Bottom-up: Employees set their own OKRs based on what they think should get accomplished. To make this work, company OKRs, mission and vision should be clearly defined.
Lateral: Manager or supervisor and employee negotiate OKRs. Typically, manager will say something like “I need to achieve X and Y in this quarter, how can you help me?”

Ensure the process takes root— from the top to the most junior associates in the company.

Set Cadence
1. A person or a team should have up to 3 objectives per planning period..
2. For what time period will the OKRs be set? Typically, companies use quarters. First, most businesses already operate on the business or fiscal quarters, so often it feels natural. Secondly, many people claim that three months is an optimum time in which an ambitious objective could be accomplished.
Check-ins
1. How often should OKR owners update their key results? Generally acceptable practice is once a week and, for whatever reason, most companies choose Friday.
2. To drive performance and accountability, the progress on OKRs needs to be reviewed regularly. Most companies set up short meetings every week (typically Friday) to discuss the progress against objectives and set priorities for next week. It is important to note that those meetings should not be all-hands meetings, but rather each team should have their own meeting.
Maximum number of Objectives and Key results
1. What is the maximum number of objectives a team or individual may own? While, general practice is three, in the beginning we advise that this number is set to one. Remember, think big but start small. Let this new idea take root.
2. For each objective, what is the maximum number of key results? Some companies don’t limit those, but in our experience three works best, while five is still acceptable. If an objective seems to require more than five, try breaking it up into two objectives instead.
Retrospective meeting cadence (All-hands standup)
1. Once the planning period finishes, you should organize an all-hands meeting to discuss the results. This is often overlooked in companies which tend to move quickly and always look forward.
2. The all-hands review of the past OKRs session is tremendously important for several reasons:
  1. It demonstrates how serious a company is about OKRs.
  2. If things get done but no one notices, it doesn’t really matter.
  3. It is a chance to give credit to people that excelled at their OKRs
  4. It is a learning opportunity for people and company as a whole, to see where things didn’t go well and how they could be improved

In Summary

OKRs, which stands for Objectives (what you want to achieve) and Key Results (how you plan to measure that you have achieved your objective) are often implemented when businesses are experiencing high-growth or undergoing a lot of changes. Objectives are… always qualitative and aspirational. They are something that you, your team, or your organization aim to achieve (and should not contain numbers). On the other hand, Key Results are always quantitative. They will tell you if you have achieved your objective, so they should be measurable to avoid any doubt. OKRs bring many benefits to a business. Some of the more common ones are: