OKRs - What are they and why they are important to your organization
Apr 12, 2021|
What are OKRs and why adopt them in your organization?
Establishing a clear vision for the organization and prioritizing work on what matters to achieve the vision is a fundamental characteristic of the Agile mindset. The vision is supported by a set of goals or objectives that may be challenging but are deemed achievable by the organization. Objectives provide business value and are supported by the initiatives taken by the organization. Metrics are put in place to measure the results of the initiatives and to assess progress towards the successful achievement of the vision.
How do we measure success?
Objectives and Key Results (OKR) is a methodology to connect each one of the goals or objectives that support the organization’s vision to at least three but no more than five quantifiable and measurable results. Measurable results indicate how close is the organization to achieve the set objective. Objectives should be challenging, qualitative, actionable and have a target due date (ex. End of quarter). Results should be quantitative, specific and measured frequently, ideally weekly.
KPIs vs OKRs
Key Performance Indicators (KPIs) measure the day-to-day business as usual performance required to keep the doors open. OKRs, on the other hand, look to the future. OKRs provide a framework to identify how to improve the organization by exploring the art of the possible.
Examples of OKRs
Objective: Increase product market share 10% by the end of the quarter.
Key Results (good):
- Conduct 3 focus groups to identify new product features that will enhance the customer experience of our widget
- Implement 2 of the new features identified by the focus groups
- Increase marketing budget by 20%
Key Results (bad):
- Fix known product defects to improve customer experience
- Promote product in social media
- Increase marketing budget
Objective: Increase customer satisfaction 25% by the end of the year.
- Identify the top 10 accounts and request their feedback on three features they like about the product and three features that need to improve
- Implement quality control program to cut product defects by 50%
- Upskill workforce by having each team member complete 80 hours of training per quarter
Key Results (bad):
- Conduct customer satisfaction surveys and share results with your leadership team
- Fix product defects
- Train the team on new technologies
Pulling it all together
Identify objectives aligned to the organization’s vision. Define quantifiable results and continuously
measure them to assess progress towards achieving the objectives. Inspect progress, communicate and empower knowledgeable team members to adjust initiatives accordingly and reach objectives.