Tricks of the Trade Venture Partner Series: Never Overlook Objectives and Key Results
More often than not I find myself reminding executive teams to set and stick to Objectives and Key Results (OKRs) as a way of tracking and bettering their employees and their quality of life. Intel (where OKRs were invented), Google, Zynga and other companies are right in putting weight behind these efforts. OKRs often take a quarter or two to work out the kinks and in that time, those uncommitted to the practice generally push them to the bottom of the priority list. This is an error for the health and sustainability of any business.
For both businesses and individuals, OKRs are important, but different. To give a frame of reference consider this:
What is an OKR?
OKRs are essentially just bottoms up processes for defining quarterly objectives. They include both the realistic and the stretch or ambitious goals for an individual, business unit and company. They drive retention through personal goal setting and instill in employees a holistic sense of pride in the work and personal life they manage themselves. They allow direction to be communicated across a whole company.
Example, Company OKRs
Objective: Be the #1 company for X
Key Result: Grow customer base by 25%
Key Result: Survey, 75% of current customers happy
Key Result: Launch Feature X to 10 customer
Stretch Goal: Grow to 100 paying customers
Example, Business Unit OKRs
Objective: Hire a great engineering team
Key Result: Look at 700 candidate resumes
Key Result: Interview 70 candidates
Key Result: Hire VP of Engineering
Stretch Goal: Hire 7 candidates
Work / life balance actually only requires 1 to-do list
By setting OKRs that range from a project task to a personal goal of hitting the gym 4x per week, you’re encouraging overall task management within your ranks. OKRs shouldn’t be simply business or personal. By being both, they factor in the detachment from work that truly drives creativity. By encouraging accountability in all facets, you’re empowering your employees to value themselves in a way that is critical for your collective success.
Example, Individual OKRs
Objective: Be the #1 company for X
Key Result: Spec out white label solution by 1/7
Key Result: Working prototype of white label by 1/14
Stretch Goal: Launch to 2 customers by EOQ
Objective: Achieve work/life balance
Key Result: Catch 5:20pm train 3 days a week
Stretch Goal: Go to the gym 4 days a week
Low effort to maintain
Once the initial effort is made to get OKRs in place, they truly require limited effort to maintain. While true objectives take longer to figure out, many OKRs stay the same over time while the result will change as projects roll on. My advice is to do whatever you have to – force it if you have to – to get it to work the first time and then it will become natural. Quarterly is not my directive but regularity is, so find what cadence works for you and then stick to it. At the end of the day, management at the highest level must buy in to the practice of OKRs as everyone’s must align with the company’s larger goals. By scoring each result on a 0-1 scale each quarter (with 0.7 representing a satisfactory grade), your team will know when they’re being evaluated, how they’re being measured and if they’re not performing.
If your company is in a place where writing things down and sharing cross-functionally is valuable, then yes, OKRs are a good thing to put in place. Watch accountability rise.