MBA217: Objectives and Key Results

Paul Niven helps us to understand Objectives and Key Results (OKRs), a goal-setting tool to set ambitious goals with measurable results. Show Notes Objectives and Key Results (OKRs) is a goal-setting system to help drive strategic execution. It’s a critical thinking framework and ongoing discipline to focus efforts to drive the company forward. In short, OKRs help your organization align and achieve important goals. OKRs go beyond simple goal setting in that there is a build-in approach for reflection and ongoing improvement. Many organizations use a dual cadence. That means that the highest level of the organization, they have longer term OKRs (typically annual) to set context. From there, other areas set 90-day OKRs that allow for frequent inspection and help to achieve the longer term OKRs. Teams will often use weekly check-ins and mid-quarter reviews to ensure we’re focused and achieving results. Objectives When crafting an OKR, start with the objective. An objective is a statement of a broad qualitative goal designed to propel the organization forward in a desired direction. It’s what the organization aspires to be. There’s an art and science to creating a good objective. There are three components to an effectively worded objective. Objectives should start with a verb. By their nature, objectives are action oriented. The objective should state what we aspire to do. Effective objectives should state the ‘why’ or ‘so that’. It explains why we want to do what we’re trying to achieve. Key Results The Key Results portion of the OKR tell us how we’ll measure progress and how we’ll know if we’ve achieved the objective. These are quantitative statements. There are two types of key results; metrics and milestones. When using a metric, it’s important to show the level of stretch by describing it in the format of “from X to Y”. For example, a Key Result may be “Increase click-through rate on the website from 27% to 43%”. Showing the amount of change in this way sets the context of the goal. Sometimes to get to a metric, we need to use a milestone Key Result. A milestone turns a binary activity into a Key Result. It’s an activity that will drive progress for the metric Key Result. An example of a milestone Key Result is “Build sales page on the website”. There are two conditions for milestone key results. They should be accompanied by a date (deadline) and it should be complimented with a metric key result. Common Challenges One of the common pitfalls with using ORKs is that the Key Results may have a lack of specificity. The use of generic words such as “launch” or “implement”. These vague words make it difficult for people to align because they may have different interpretations of what these words mean. The more specific and clear you make the goal, the more likely you are to achieve it. Another problem is that people often turn their OKRs into a long, uncoordinated list. To address this, make a story out of your OKRs. Once you have the objective, think about what the first thing you’ll need to do or measure to achieve that outcome and then the next and the next. Alternatively, start with the metric Key Result and work backwards from that measurable outcome. Listen to the full episode to understand how to use OKRs to stay aligned and achieve ambitious goals. Homework Learn more about OKRs and try it yourself by using the OKR formula to set a goal either for your next project or in your personal life. Links Paul’s website OKRsTraining.com Paul Niven Paul Niven is a management consultant, author, and noted speaker on the subjects of Strategy, Strategy Execution, Objectives and Key Results (OKRs), and Balanced Scorecard. Paul is the founder of both OKRsTraining.com and The Senalosa Group. The companies have assisted over two-hundred organizations around across the globe effectively execute their strategy. Thank you for listening to the program To get more valuable content to enhance your skills and advance your career, you can subscribe on iTunes. Also, reviews on iTunes are highly appreciated! I read each review and it helps keep me motivated to continue to bring you valuable content each week. The post MBA217: Objectives and Key Results appeared first on Mastering Business Analysis.