OutThink

A five-part series: 1. Introducing OKRs, 2. Preparing for the OKR Journey, 3. Crafting Great OKRs, 4. Driving OKR Alignment, and 5. Managing Effectively with OKRs

Summarized by Bill Gelbaugh from: Objectives and Key Results by Paul R. Niven and Ben Lamorte. With additional material from Measure What Matters, Lattice OKR 101 and Perdoo

CRAFTING: THE PROCESS TO CREATE GREAT OKRs

Having discussed characteristics and tips for creating effective OKRs in part one, we are now ready to commence creating great OKRs.

Create
We recommend not using a large brainstorming group to draft your OKRs. Use a small team. A very small team, most likely two or three people. OKR teams are formed to tackle specific business problems, and to discover creative solutions to problems.  People require deep, time-consuming concentration on the task. It’s not realistic to expect a group of 20 (or more) to drop everything and spend the time necessary to create a draft set of OKRs. However, for two or three people, despite the inevitable demands on their time, and while it may not be convenient, it is possible. The small team you convene can invest the required time to delve into the background necessary to create your OKR: Your place in the competitive environment, scrutinizing your strategy, determining your core capabilities, and so on. These are the raw materials that lead to effective OKRs, and they must be carefully considered.

Whether it’s the corporate level or department, we suggest your small team document two to three objectives with one to three key results each. They should be written at a stretch level (20%-30% beyond what you feel is achievable) to inspire.

Refine
Once your small team has completed their initial draft set of OKRs, submit to the wider team for review prior to the first actual full team meeting/workshop. In attendance for the workshop, we would expect the leadership team if you are working on your corporate level OKRs, or the team-level leadership group if it’s a team set of OKRs. The purpose of the session is to critically examine what has been prepared, have the small team explain their choices, generate debate (a vigorous debate we hope), and ultimately come to an agreement on the set of OKRs you will use for this next quarter.

Align
Much of the work in modern organizations is cross-functional in nature–teams working together to solve problems or create new modes of working that will benefit multiple areas of the business. OKRs created at the team level must be created with this context front of mind. 

The small team or dynamic duo we profiled in the previous steps should take your draft OKRs on a road trip around your organization, discussing dependent OKRs with other team leads. You’ll be liaising with colleagues to discuss how some of your OKRs depend on their best efforts while sharing with other teams how you are uniquely positioned to assist them in meeting their goals.

Scoring will often help you in assessing the level of dependency between you and another team. For example, if you determine that one of your key results is highly dependent on another team’s assistance, your aim in meeting with them is to ensure they acknowledge the dependency and pledge their support, which will then allow you to ratchet up your targets because you’re confident they’ll provide their backing when necessary. The converse is also true; other teams may rely on you to meet their targets and, thus, you’ll work with them to show how you can help.

Finalize
Assuming you’re creating OKRs at the team level, during this step the team lead and partners will confer with their superior (most likely a member of the senior executive team) to receive final approval to use the OKRs in the upcoming quarter. It’s also important to ensure that the executive understands the rationale behind the scoring targets you’ve chosen. The last thing you want when results begin to accumulate is mismatched expectations that lead to confusion and disappointment.

Transmit
There are two components in the final step. First is the fairly rote necessity of loading your OKRs into a software system or whatever product (Google Sheets, Excel, etc.) you deem appropriate to track your results each week. A simple process indeed, but a vital one nonetheless. OKRs must be rigorously and formally cataloged and monitored to insure the integrity of the entire OKR process.

The second task is transmitting the OKRs to your team and beyond. We encourage you to communicate them widely, using a variety of media. One method, sharing them in an in-person venue, such as an all hands or town hall style meeting is strongly recommended for a number of reasons. Chiefly, it provides an opportunity for employees who were not directly involved in OKRs creation to ask questions of those who were there when the critical decisions were made.

THE OKR CRAFTING PROCESS

Following are some practical examples of Objectives, Key Results and Initiatives to help you get started.

For further inspiration, this football team graph is an example of OKRs in action. Starting with OKRs for Head Coach, you can see how objectives and key results for other coaches fall into place to support the overall team objective.

OKR | Football Team Example

HOW MANY OKRs SHOULD WE HAVE?

The late screenwriter Nora Ephron left us with a number of Hollywood classics, including When Harry Met Sally, Sleepless in Seattle, and Silkwood. All three were Academy Award-nominated for writing. Before she turned her talents to the screen, Ephron was a journalist, and perhaps her greatest gift in that world was the ability to capture the essence of a story. She learned the importance of identifying a story’s core early on, at Beverly Hills High School, from her Journalism 101 teacher Charlie Simms. Here’s the enduring lesson Simms passed on to Ephron. 

He started the first day of class by explaining the concept of a lead. He explained that a lead (i.e., the leading sentence) contains the why, what, when, and who of the piece. It covers the essential information. Then he gave his students their first assignment; write the lead to a story. He presented the facts of the Story:

    Kenneth L Peters, the principal of Beverly Hills High School, announced today that the entire high school faculty will travel to Sacramento next Thursday for a colloquium in new school methods. Among the speakers will be anthropologist Margaret Mead, college president Dr. Robert Maynard Hutchins, and California Governor Edmund “Pat” Brown.

The students then hammered away on their typewriters outlining their lead. Each attempted to summarize the who, what, where, and why as concisely as possible: “Margaret Mead, Maynard Hutchins, and Governor Brown will address the faculty on…”; “Next Thursday, the high school faculty will…” Simms reviewed the students’ leads and put them aside. He then informed them that they were all wrong. The lead, he said, was “There will be no school Thursday!” In that instant, Ephron realized journalism was not just regurgitating facts but about figuring out the point. It wasn’t enough to know the who, what, when and where; you had to understand what it meant. Moreover, why it mattered.

When it comes to how many OKRs you produce, we recommend you adhere to the tried and true aphorism: less is more.

Ephron later noted that what Simms had taught her worked just as well in life as it does in journalism. It also works great for OKRs. The day you set foot in the conference room with your team to debate and decide on your OKRs, you’re searching for the business equivalent of the “lead.” Just think of the universe of possibilities that awaits you when someone says, “Okay, what are our most important objectives?” You have customer concerns, shareholders or partners, employees, competitors, the list is endless. They are the organizational equivalent of the “why, what, when, and who.” Your challenge is to cut through the clutter and pinpoint exactly what is most important to you, what will have the most impact right now.

When it comes to how many OKRs you produce, we recommend you adhere to the tried and true aphorism: less is more. There is a huge opportunity cost to increasing your inventory of OKRs. Primarily, lack of clarity and focus around what the company’s priorities truly are. When you begin your OKR process, we recommend you generate a small number (a handful most likely) of objectives that are crucial to the execution of your strategy for the year. Then change tactical objectives each quarter to move the strategic objective forward.

A five-part series: 1. Introducing OKRs, 2. Preparing for the OKR Journey, 3. Crafting Great OKRs, 4. Driving OKR Alignment, and 5. Managing Effectively with OKRs.

by Bill Gelbaugh from: Objectives and Key Results by Paul R. Niven and Ben Lamorte. With additional material from Measure What Matters, Lattice OKR 101 and Perdoo.

Having explored the basics of OKRs and prepared for the OKR journey, we are now ready for implementation.  Due to the length of this section, we will be covering the crafting of OKRs in two posts – one this week and one the following Monday.  OKRs are comprised of three components – 1) Objectives, 2) Key Results, and 3) Initiatives.  Where do we begin?  We always start with the objective as it is the cornerstone of successful OKRs. 

CHARACTERISTICS OF EFFECTIVE OBJECTIVES

Inspirational
A well-written objective is more than a short collection of words that string together to describe a business goal. Your objectives should compel people to a higher standard of performance based on the inspirational power of the message. People should be forced to think differently based on the inherent challenge and inspiration of the objective. It’s not enough to say you want to see 10 percent improvement when you know that’s well within your reach. It means you’ll just keep doing the same things, just working ever so slightly harder. However, if I said to you, I need 50 percent improvement in what you’re doing; you’d probably say, “Gosh, in order to do that, I’d have to completely solve this hard problem,” or “I need to completely rethink how I’m addressing X or Y.” That’s what OKRs are supposed to do.

It’s not enough to say you want to see 10 percent improvement when you know that’s well within your reach.

Qualitative
Objectives should represent what you hope to accomplish, and therefore, be expressed in words and not numbers. The use of numbers will be thoroughly covered with key results.

Attainable
It’s no accident that this item appears directly below our call for inspirational objectives. Finding the balance between inspiration and reality is one of the foremost trials of creating objectives that work. We encourage you to push the limits of employees’ imaginations when setting objectives, but please be cognizant of the fact that limits exist.

Doable in a Quarter
Assuming you’re creating objectives each quarter, you’ll want to advance something that can, indeed, be accomplished during the subsequent three months. If, after drafting an objective, the collective wisdom of the team suspects it will take a year to realize, then perhaps what you’ve developed is closer to a strategy or even a vision.

Controllable by the Team
Whoever drafts the objective, whether it’s at the corporate, business unit, department, team, or individual level, must be able to control the outcome. If, at the conclusion of the quarter, your objective has not been reached and your first temptation is to say, “Well, sales didn’t deliver, so we missed our objective,” you’re missing the spirit of the exercise.

Provide Business Value
Your objectives should be translated from your strategy and directed toward creating tangible value for the enterprise if achieved. If there is no promise of a business benefit at the end of the day, there is little need to expend the resources necessary to accomplish the objective.

TIPS FOR CREATING GREAT OBJECTIVES

Avoid the Status Quo
Your aim is to always identify new objectives that tug at the edges of your capabilities. Therefore, you should avoid those that simply recite what you’re already doing, for example: “Maintain market share” or “Keep training employees.” If you can accomplish an objective with virtually no change in the way you’re working, it is most likely going to prove to be wholly ineffective in moving your business forward.

Use Clarifying Questions
Often, the best way to cut the confusion is to simply and sincerely ask, “What do you mean by…?” If, for example, someone offers that you must “Create value for our customers,” assume the role of an OKR anthropologist and try to ascertain the specifics of that comment. Are they referring to a particular segment of customers? All customers? What does value mean in this context? Escalating from abstractions to specifications will help you unearth the true objective that requires your focus.

Frame Objectives in Positive Language
Ideally, you and your team should feel compelled to work towards achieving the objectives you set. Therefore, you should carefully consider how you frame them. As an example, let’s say you want to improve your eating habits. When designing an objective you have two choices. You could say, “Reduce the amount of junk food I eat.” Alternatively, you might term it this way: “Eat more calories from healthy food.” Choosing the latter will force you to research healthy foods, identify those you’d like to experiment with, and ultimately provide a greater likelihood of success.

Start With a Verb
Very basic advice, but frequently ignored. An objective is a concise statement outlining a broad qualitative goal designed to propel the organization forward in a desired direction. That implies action. Thus it’s crucial that every objective begins with a verb to denote the action and desired direction. Does the company want to maximize loyalty, build loyalty, leverage loyalty? Each of these is quite different and would drive diverse actions. Action verbs are what bring your objectives to life.

What’s Holding You Back?
There is real power in recognizing and overcoming challenges to improve your situation. When considering possible objectives ask yourself what problems are holding you back from executing your strategy. Taking an unvarnished look at the problems that separate you from the successful execution is a great starting point in the creation of objectives.

When considering possible objectives ask yourself what problems are holding you back from executing your strategy.

Use Plain Language
While you don’t want to shy away from using words that accurately convey the essence of the objective, you should err on the side of choosing language that everyone can immediately understand to generate widespread comprehension of the objective and why it’s important. We also suggest sparing use of acronyms. Should you include any, ensure everyone is aware of their meaning.

CHARACTERISTICS OF EFFECTIVE KEY RESULTS

Key results are defined as a quantitative statement that measures the achievement of a given objective. If the objective asks, “What do we want to do?” the key result asks, “How will we know if we’ve met our objective?” Sounds easy enough, especially since tracking results is something that comes almost naturally to most of us now, given the rise of Fitbits and other wearable devices. However, creating effective key results for your business, those that accurately gauge progress on your objectives can prove elusive

Aspirational
The results of years of goal science research are quite clear and compelling: Setting the bar high leads to improved performance and enhanced satisfaction at work. Conversely, should you decide to draft easy to attain results, you can expect achievement, but subsequent motivation and energy levels will most likely fall. So, when drafting your key results we urge you to stretch the limits in order to challenge your teams to think differently. However, ensure the results are ultimately achievable.

Quantitative
Objectives are always qualitative, representing a desired action, while key results are necessarily quantitative so that we can apply numbers to determine whether or not we’ve met the objective. It could be a raw number (number of new visitors to your website), dollar amount (revenue from new products), percentage (percentage of repeat customers), or any other form of quantitative representation. Progress on key results should never be a matter of opinion, that’s why numbers are so powerful.

Specific
Clarifying terms and concepts, and ensuring shared understanding, is critical when writing key results should you hope to foster communication among teams and avoid unnecessary and damaging ambiguity.

Owned
Those responsible for delivering key results must be actively engaged in the process, principally in the creation. You will always be more prepared (and disposed) to execute on something that you helped create, since you molded your intentions based on a common understanding of the desired result, and your willingness to find innovative ways of achieving it.

Progress-Based
Harvard Professor Teresa Amabile has written extensively about what she terms “The Progress Principle.” It suggests that: Of all the things that can boost emotions, motivation, and perceptions during a workday, the single most important is making progress in meaningful work. Moreover, the more frequently people experience that sense of progress, the more likely they are to be creatively productive in the long run.

Vertically and Horizontally Aligned 
We would underscore the importance of ensuring your key results are vertically aligned by reviewing them within your team and leadership, and horizontally aligned by sharing and reviewing with teams upon whom you depend, or who depend on you. 

Drive the Right Behavior 
There are a number of pithy statements relating to measuring performance; perhaps the best-known being, “You get what you measure.” That is often the case. Once you shine a metaphorical light on anything, you will necessarily be drawn to it, and increase the attention paid toward it. We suggest you think carefully about the behavior each key result you generate may engender in people.

TIPS FOR CREATING KEY RESULTS

Key, Not All
This exercise is not an excuse to demonstrate how overworked and overburdened you are by cataloging every conceivable action you’re considering for the next quarter. On the contrary, it’s a strategic endeavor focused on highlighting and maximizing the most critical value drivers of your business. Maintain exclusive emphasis on identifying the key results that denote the most actual progress on your objectives.

This exercise is not an excuse to demonstrate how overworked and overburdened you are by cataloging every conceivable action you’re considering for the next quarter.

Describe Results, Not Tasks
Related to the item above, your goal is to isolate key results, not create a list of tasks or activities. To clarify our terms, when we say task we’re referring to something that can typically be accomplished in a day or two; that would reside comfortably on a to-do list. “E-mail a prospect” or “Meet with the new VP of Sales,” are tasks, not key results. Whereas, “Add twenty-five qualified opportunities to the pipeline” is a key result. To distinguish between a task and key result, look at the verb you assign. If you find yourself using “help,” “participate,” “assess” or other relatively passive verbs (passive in this context at least) you’re most likely offering up tasks rather than key results. If that’s the case, move up the value ladder by asking, “Why are we helping, or participating, or assessing?” What is the outcome? Once you do that, a more solid key result featuring an action-oriented verb is likely to emerge.

Use Positive Language
We shared this advice when discussing how to create objectives and it holds equally well here. Bigger is better with key results. Rather than offering “Lower error rate to 10 percent,” consider the messaging power inherent in: “Increase accuracy to 90 percent.” The positive framing will enhance motivation and increase commitment.

Bigger is better with key results.

Keep Them Simple and Clear
Creating robust key results doesn’t mean you should require a Ph.D. to decipher them.

Be Sure to Assign an Owner
There is a well-known phenomenon in social psychology literature termed diffusion of responsibility. Distilled to its essence, it suggests that people are less likely to take action or assume responsibility when others are present. The quintessential example is someone suffering a heart attack on a busy urban street with nobody stopping to help, because they all assume someone else will. In less dramatic fashion, key results may suffer the same fate if an owner is not assigned (i.e., since no one individual is ultimately responsible for the result, no action is taken and the goal languishes).

CHARACTERISTICS OF EFFECTIVE INITIATIVES

Initiatives are where the rubber meets the road, the fun begins, and the actual work gets done.  They are the tasks that move you in a meaningful way towards achieving your Key Results and Objective.  The best way to get started is to ask:

“What tasks (initiatives) will accomplish this with the most efficacy?” 

Once you have answered this question, a few key steps will have you on your way to creating successful initiatives.

“What tasks (initiatives) will accomplish this with the most efficacy?”

Set a Strategy
Be sure your team is working on the right initiatives, and that there is a direct line of sight with accomplishing your objective.  Determine where greater efficiencies can be created, or the steps needed to produce a better result or achieve specific outcomes.  Also be sure to discuss obstacles or challenges you might face.  If making significant change, consider if the team might benefit from training or a dedicated roundtable discussion.

Secure Buy In
Each team, unit, or group of people should be developing and working on initiatives in a coordinated fashion.  All members of the team have a legitimate say in prioritizing initiatives, thereby increasing their level of vested interest in the process.  Inclusion and transparency fuel collaboration, alignment, and ultimately the execution of strategy.

Make a Plan
Determine who will be championing individual tasks, if they will need additional team members to support, and the time frame to complete each task, “Who” will do “What” by “When”.

Execute
With strategy, buy in, and plan in hand, your team is now ready to carry out their initiatives.  They are the ones who are accountable for executing the plan.  Meetings should be set quarterly, monthly, and/or weekly for managers/leaders and teams to review progress and celebrate milestones achieved along the way.  There may be a lot to accomplish, but the goal is to foster communication and collaboration, and have fun too.  OKRs are designed to be inclusive and inspirational, leading to greater success in achieving your objectives. 

A five-part series: 1. Introducing Objectives & Key Results (OKRs), 2. Preparing for the OKR Journey, 3. Crafting Great OKRs, 4. Driving OKR Alignment, and 5. Managing Effectively with OKRs.

Summarized by Bill Gelbaugh from: Objectives and Key Results by Paul R. Niven and Ben Lamorte, with additional material from Measure What Matters, Lattice OKR 101 and Perdoo.

THE PLANNING PHASE

Ready to get started with Objectives and Key Results (OKRs)?  Part one of our blog series discussed why your company might want to adopt OKRs.  Our second post is all about planning.  As with any new venture, a little preparation goes a long way in ensuring successful implementation.   It is also vital to note implementation is a journey, not an event.  This guide is written to help home builders, trade contractors, suppliers, architects, engineers, and others in the housing industry adapt OKRs to your company’s culture.  We are all unique, and most of us do not have a Silicon Valley mindset, so adaptation is key.  There are some basic questions though that every company should begin with to get started on the right path:   

Who is Going to Champion OKRs?
There must be a sponsoring executive (and team) who feels passionate about and committed to your company’s OKR strategy roll-out. It’s important to understand that no initiative will survive without first having this executive sponsorship.

What is the Most Critical First Step?
A critical first step is to have your team buy into and support any OKR program. Then comes a deeper dive into the OKR framework, philosophy, goals, and vocabulary. Note: you should have a deep enough understanding to review OKRs with your team by the end of this series.

What Matters Most?
OKRs should always solve specific critical business issues you face now. OKRs demand that you isolate the most fundamental priorities and dedicate your focus to that limited subset of variables involved in running any company.

How Will We Create Transparency?
OKRs should ideally be transparent throughout the organization, meaning everyone can see what others measure and provide feedback and input. This transparency fuels collaboration, alignment, and ultimately the execution of strategy.

How Will We Live our OKRs?
The real power of the OKR system is figuring out how to live OKRs every day as a team. OKRs are best achieved if they are baked into the company’s daily, weekly, and quarterly cadence, from initial planning, to status updates, to company dashboards.

THE DEVELOPMENT PHASE

Once you have answered these questions, here are the concrete steps you’ll take to create your first OKR or set of OKRs and review initial results. Your development plan will, of course, depend on where you decide to start initiating your OKRs. For this discussion, we’ll assume you’re going to begin with a set of OKRs at the corporate level only. 

Develop or confirm the mission, vision, and strategy: Your OKRs should be translated from your annual strategy, drive the achievement of your vision, and be in alignment with your overall mission. These are critical enablers of success and, as such, should be solidly in place before you begin.

Create your corporate-level objective(s) and key results: There are several options for this step: using a small team, gathering input from employees through surveys that will later be used in a workshop, or conducting executive interviews, or simply drafting objectives during a leadership workshop.

Present OKRs to the company: We suggest using multiple media here: Share electronically, post to your intranet, and most importantly, communicate in person (perhaps at an all-hands meeting) so that you can facilitate a dialog surrounding the OKRs you chose and why.

Provide OKRs education: We’ve previously noted the seductive simplicity of OKRs, and that ease of understanding will often prompt organizations to skip this vital step. However, consider this education with a capital E, during which you’ll not only provide fundamentals on the model but share why you’re choosing to use OKRs now, success stories from other firms, and what people can expect during the journey.

Plan to monitor OKRs: You don’t “set and forget” OKRs; you must monitor them with an OKR Scorecard using a quarterly, monthly, and weekly schedule (or whatever cadence you choose).

Report results at the end of the quarter: Score your OKRs and communicate the entire organization’s results. As with everything discussed above, we’ll return to this topic with much more information later in this series.

THE STRATEGY ALIGNMENT PHASE

OKRs should never be created in a vacuum but must reflect the company’s purpose, desired long-term goals, and plan to defend market space successfully. In other words, they should translate your mission, vision, and strategy into action.

Consider your mission to be the compass by which you guide your organization.

Unlike visions and strategies that may be achieved over time, you never really fulfill your mission. It acts as a beacon for your work, constantly pursued but never quite reached. Consider your mission to be the compass by which you guide your organization. Having a clear mission and aligning OKRs—monthly, quarterly, and yearly—helps ensure that work performed in the short term meets the long-term purpose of the organization.

Long-Term Vision
A powerful company mission determines your core purpose as an organization. Based on the mission, you now require a statement that defines more specifically where we want to go in the future. The vision statement does just that, signifying the critical transition from the unwavering mission to the spirited and dynamic world of strategy.

Without a clear and compelling vision to guide all employees’ actions, you may wind up with a workforce lacking direction.

A vision statement provides a word picture of what the organization intends ultimately to become—5, 10, or 15 years in the future. This statement should not be abstract—it should contain as concrete a picture of the desired state as possible and provide the basis for formulating annual strategies and OKRs. Without a clear and compelling vision to guide all employees’ actions, you may wind up with a workforce lacking direction and thus unable to profit from any strategy or OKRs you create no matter how well-conceived.

Annual Strategy
An annual strategy is critical to your OKRs as it provides the initial context for creation.

All OKRs should be directly translated from your strategy—your game plan for successfully creating or defending aggressively contested market space.

One huge benefit of OKRs is the power of, “NO.”  A core strategy supplies boundaries, helping you determine what not to do when faced with a sea of opportunities, which is every bit as important as deciding what to do. It also enables you to choose viable options, remain focused, align your entire organization, and make necessary commitments to execute. Your strategy development should answer the questions: What are our preferred markets? Who are our optimal customers? What are their most critical needs?  By answering these questions, you will be able to set OKRs that move your company forward in a meaningful way. 

Ready to get started developing your OKRs?  With your company having a clear picture of your most critical objectives, and how you will successfully adapt OKRs to fit your corporate culture, you are now ready to act!  Our next post is all about crafting great OKRs. 

Next up… CRAFTING GREAT OKRS! 

Understanding why you would want to adopt OKRs

A five-part series: 1. Introducing OKRs, 2. Preparing for the OKR Journey, 3. Crafting Great OKRs, 4. Driving OKR Alignment, and 5. Managing Effectively with OKRs 

Summarized by Bill Gelbaugh from Objectives and Key Results by Paul R. Niven and Ben Lamorte. With additional material from Measure What Matters, Lattice OKR 101 and Perdoo. 

Why a series of blog posts about Objectives and Key Results, or OKRs? After all, aren’t OKRs just a goal-setting methodology? Well, yes, kind of, but more than that, they are a strategy-to-execution tool. When Silicon Valley startups discovered OKRs were behind the meteoric rise of companies such as Google, LinkedIn, Twitter and Amazon, a plethora of companies decided to adopt OKRs, hoping to catch even a fraction of that success. 

This first post will share how the best companies use OKRs to create focus, alignment, contribution, and velocity. To capture the magic of OKRs, we will start by covering the basics; the OKR framework, the philosophy behind OKRs, the four goals of OKRs, and the incredible benefits your organization may be missing out on by not adopting OKRs.

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Good questions inform. Great questions transform.
—Ken Coleman

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LET’S START WITH A QUESTION – FOUR, TECHNICALLY!

During our OKR journey here at Outhouse, we have discovered four great questions that help us set successful OKRs:

What do we want most to achieve?
What is the right Objective for our current goals and challenges?

How do we want to measure success?
What measurements would best show our progress and success?

What initiatives would get us there?
Are we working on the right Initiatives to achieve this Objective?

What is the most efficient way to accomplish this?
Are we getting these initiatives completed as efficiently as possible?

Is your Objective to create a thriving business? What do you mean by thriving? Is it growing your user base? By how much? Might it be climbing revenues? By how much? Retention? For how long? Combining an aspirational objective, quantitative results, and focused initiatives creates inspiring, measurable, and achievable goals. 

A great goal is a powerful tool; however, it’s not enough. A leader needs a way to ensure that their organization lives that goal. The real power of the OKR system is figuring out how to live that goal every day as a team. OKRs are best achieved if they are baked into the daily, weekly, and quarterly cadence of a company, from planning meetings and status updates to celebrating accomplishments along the way. 

Ready to begin implementing OKRs at your company?  Let’s get started with the basics!

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FRAMEWORK 

OKRs are built around three elements: 

Objective: Where do we want to go? 

Key Results: What are the results we need to get there?

Initiatives: What do we need to do to achieve those results? 

The Objective is the goal of the company, team, or individual. Key Results are the measurable results needed to accomplish the Objective. Initiatives are the tasks you need to perform to achieve your results (i.e., the “to-do list”). This framework is repeated from the top of the organization on down. Starting with an overall company Objective, each group or team sets their OKRs, and individual employees often have OKRs as well. This cascading interplay of goals is what keeps a group of people aligned. 

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PHILOSOPHY 

OKRs have a unique belief system around set goals that distinguishes them from other goal-setting methodologies. 

Ambitious
Objectives are meant to be inspiring, set just beyond the threshold of what seems possible. Achieving less than 100% is not considered a sign of failure. The goal is to achieve as much as possible.

Measurable
Key Results are tied to tangible milestones and outcomes.

Transparent
OKRs are viewable across the organization, from the CEO down to the Intern.

This unique approach to goal setting was developed by Andy Grove at Intel and passed down to John Doerr, who brought the company strategy to Google. Today, thousands of organizations from Spotify to the United States Navy use OKRs as one of their main management tools. 

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Today, thousands of organizations from Spotify to the United States Navy use OKRs as one of their main management tools.

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GOALS 

Developing a focused strategy and making certain everyone is rowing in the same direction and are contributing play key roles in OKR goal setting.  Another prominent feature is organization-wide transparency.

Focusing efforts
OKRs are not, and should never be, considered a master checklist of tasks that need to be completed. They are designed to be far more strategic. The model aims to identify the most critical business objectives and to gauge accountability through quantitative key results. Strategy pundits are fond of noting that strategy is as much about what not to do as it is about what to do. So it is with OKRs. You must be disciplined in determining what makes the final cut. 

Ensuring employees work together
OKRs must be structured and used to maximize employees working together in focused collaboration and alignment. One of the ways this is facilitated is through the inherent transparency of OKRs, which are shared widely so that everyone, from top to bottom, can see objectives and key results throughout the organization. 

Making measurable contributions
Key results are typically (and almost exclusively) quantitative in nature. Whenever possible, we want to avoid subjectivity and note with precision how the business is advancing based on the achievement of our OKRs. 

Driving the company forward
The ultimate arbiter of success is the achievement of your goals.  

BENEFITS 

A popular saying is, “the simpler, the better,” and that is the key to the tremendous benefits that come from implementing OKRs.

OKRs Are Easy to Understand – Increasing Buy-in and Use 
Consider OKRs the “In-N-Out of managing your performance.” One of the most significant benefits of the framework is its sheer simplicity, and that begins with the taxonomy—of just three elements: objectives, key results, and initiatives. Other approaches to managing performance and executing strategy tend to be awash in jargon. This can confuse employees already under siege from missions, visions, core values, KPIs, etc.  

OKRs Demand You Focus on What Matters Most
OKRs demand that you isolate the most fundamental priorities and dedicate your focus to that limited subset of potential variables involved in running the company. OKRs are a great way to help everyone understand what’s important and how you’re going to measure what’s important. It’s essentially a great way to communicate strategy, measure strategy, and accomplish strategy. By putting a spotlight on your absolute priorities, you’re winning on two fronts: Identifying what matters most, and by default, providing yourself with the appropriate ammunition to say no to the many initiatives that, while tempting, are not in line with your goals. 

OKRs Shorter Cadence Fosters Agility and Change-Readiness
While there is room for customization with every implementation, most OKR practitioners will set goals quarterly. This frequent establishment of priorities is vital. As the pace of change within and outside businesses accelerates, new information must be captured, analyzed, and transformed into knowledge that can be used to innovate and potentially alter the strategy or business plan. Doing so is immensely difficult if you’re only setting annual goals. 

OKRs Transparency Promotes Cross-Function Alignment
An effective OKR program works on several levels: There are corporate-level objectives and key results in place. Departments or business units have OKRs, and individuals may have OKRs. The composition of OKRs at each level is not confined to their provincial interests. On the contrary, a well-developed set of OKRs should include objectives and key results that foster (and demonstrate) collaboration with other teams on whom they rely, or conversely, depend on them to drive results. OKRs should ideally be transparent throughout the organization, meaning everyone can see what others are measuring and provide feedback and input. This transparency fuels collaboration, alignment, and, ultimately, the execution of strategy. 

OKRs Facilitate Conversation and Drive Engagement
An essential distinction of the OKR model is its focus on inclusivity. They are not a top-down exercise with goals handed down, as if on stone tablets, to lower-level units and departments who are expected to execute dutifully, regardless of their opinion. It is expected that individuals will have a legitimate say in the objectives and key results chosen, reflecting a mix of top-down and bottom-up goal setting. Having the opportunity to meaningfully contribute to what you will be held accountable for goes a long way in enhancing engagement. Moreover, when results are tabulated later, the chance to engage in a meaningful discussion, conducted in a spirit of inquiry, boosts morale. It may also demonstrate to superiors an employee’s readiness for the next level on the corporate ladder. 

OKRs Promote Visionary Thinking and a Growth Mindset
Carol Dweck, a Stanford professor, known for her work on motivation and, more specifically, mindset, posits that people can be divided into two camps. Some individuals believe their success results from innate ability and are said to have a “fixed” mindset. Others feel success is a result of hard work, tenacity, and determination. They are said to possess a “growth” mindset. Fixed mindset individuals fear failure because they feel it’s an assault on their basic abilities. Those with a growth mindset embrace failure and recognize it as an opportunity for learning and improvement. 

Organizations may be similarly classified using this distinction. Those who “suffer” from a fixed mindset will often forgo opportunities that involve risk, motivated primarily by a fear of failure. OKR organizations, on the other hand, embody the growth paradigm, relish failure, embrace a spirit of failing fast, and learn quickly. We believe that to compete in today’s global economy, all companies must adopt a growth mindset. Doing so means stepping out of any predefined comfort zone and creating audacious goals. 

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IN SUMMARY

With so many visionary, intelligent, and creative people here at Outhouse, there has never been a shortage of great ideas.  What we realized over time is we needed a better way to organize, prioritize and execute.  With renderings, virtual tours, animations, visualizers, and other interactive platforms for home builders constantly evolving, it is easy to fall into a pattern of starting too many projects.  OKRs allow employees to continue to push the envelope on innovation while forcing us to choose, strategize, and focus our collective efforts on executing those ideas that will have the greatest impact on our company and our clients.  We believe your company will benefit from implementing OKRs as well.

Next up… PREPARING FOR OUR OKR JOURNEY!