Why use Objectives and Key Results?
Companies around the world are using OKRs, but why?
Having a clear vision, and then communicating it to the whole company has been crucial to the spectacular rise of many of the world's biggest companies. Their secret? They all used OKRs: Google, Netflix, Twitter, Spotify, Amazon, and our birthplace OVO Energy.
Those companies knew that to flourish in the complex world of business - through all its moving parts - OKRs would keep them on time, and on track when it mattered most.
As remote working becomes more commonplace, using a methodology like OKRs to align your teams, focus on what really matters and quickly adapt to market changes has never been more important.
So, why use OKRs?
There are lots of goal-setting or management frameworks and tools out there - SMART, KPIs, or 4DX. Like OKRs, many will include a specific structure and rules around setting goals, timeframes, and alignment. But there are some areas where OKRs excel:
1OKRs turn a vision into workable chunks
This is what sets OKRs apart. They allow you to break your most audacious vision down into workable chunks - objectives - that everyone is inspired to achieve.
2OKRs provide clear progress tracking
As we’ll see in the next section, there’s a crystal clear connection between each goal and the ways you decide to measure your success in achieving it.
3OKRs are simple for teams
Many goal-setting frameworks are designed for Senior Leadership teams. As a result, they can be quite complex, or concentrate only on the wider vision rather than the work to be done to achieve it. The 3 simple elements of OKRs - Objectives, Key Results and Initiatives - can be easily understood and used by everyone in a company.
4OKRs connect the work to the vision
Unlike KPIs, you aren’t measuring what’s already in place, or what needs improving. OKRs help you to deliver your most ambitious vision because every objective or goal is connected to it.
What are OKRs?
Objectives and Key Results are a goal-setting framework that help you to set, prioritise, track and deliver goals that link to your vision and strategy.
It can be broken down into 2 simple questions, which are:
- Where do I want to go?
- How will I know when I have got there?
Objectives, Key Results and Initiatives
OKRs have three important parts: the Objective, or goal you set, the Key Results which measure your progress, and the Initiatives which describe what you’ll do to get there.
This all aligns to the wider strategy or vision, usually from the top down. This is known as a cascade. It's this connection or 'alignment' that makes them such a powerful tool. Cascading OKRs helps to provide focus and clarity, as each team sees how the work they are delivering connects to the strategic goals of the business.
What is your team doing at the moment to achieve your vision?
These are inspirational statements of intent about a customer or business outcome. Crucially, each one connects to your strategy.
How do you know when you’ve achieved your Objective?
There are around 3-5 Key Results assigned to each Objective. Think of them as success criteria. They have to be written as a metric or number, or some kind of unit that's measurable. This eliminates opinion when you're working out whether you've met the objective!
How do you adapt to challenges and learn along the way?
A set of Initiatives sit under each Key Result. These are sometimes referred to as the ‘how’ because each Initiative describes what your day-to-day work will be to help you achieve the Key Result.
Along with the examples below, we also have a useful article on how to write OKRs.
- Objective: Achieve record online sales.
- Key Result: Hit £100,000 quarterly profits.
- Initiative: Launch ‘refer a friend’ campaign to a small subset of our customers.
- Objective: Create a simple, yet powerful website.
- Key Result: Average time spent on website increases by 35%.
- Initiative: Conduct a series of small workshops with a cross-section of customers.
Are OKRs right for you?
OKRs combined with Initiatives are a great solution to many issues:
We're not adaptable
We're too slow
We're not focused
We focus too much on single outputs - like building a new website - rather than customer or business outcomes.
We don’t share learnings and end up making the same mistakes, or constantly just reinvent the wheel.
We work in silos - we don’t collaborate across departments. This means we waste too much effort and time on things that don’t work.
We’re not nimble enough to respond to changes in the market and we don’t change our approach when things go off-track. We’re missing opportunities.
It’s hard to know what everyone is working on, or how it aligns with the strategy.
We’re trying to work remotely, but now we spend time on endless video calls mostly updating each other on progress.
How can OKRs help?
We've helped many businesses to transform how they work. Adopting the OKR methodology and using powerful software to track and manage them can yield incredible results.
Learn and adapt
Focus on priorities
Clearly highlight which OKRs are most important so everyone is moving in the same direction.
Experiment with different initiatives to see which has the most impact on your Key Results.
The alignment, progress and activity of all OKRs is available for everyone to see.
Progress is made where it really matters, and everyone understands what they should be focused on and why.
Quickly identify successful initiatives, and stop wasting time on those that are not working.
Engaged employees who can make quick decisions and take action to drive progress.
How we proved Just3Things works (3 mins)
How we proved Just3Things works
Developed from within OVO Energy, Just3Things was instrumental in maintaining the company's competitive advantage as it rapidly scaled from 5 to over 5,000 people spread over 6 offices. The software saved OVO more than £3m a year in lost productivity and endless meetings.