OKRs: How organisations can keep focused as they grow
Life is distracting. You get 50 new emails a day. Maybe there are already 10 waiting in your inbox before you even wake up.
You could easily spend months on something that doesn’t matter, or on something that doesn’t make you happy. Most of the time, the problem isn’t even your job or your colleagues. It’s because you aren’t clear on your objectives and you can’t isolate what matters from what
doesn’t. Knowing your objectives is like having a North Star you can follow.
This principle is at the core of the “Objectives & Key Results” (OKRs) system, which was made popular by Google. The company reached a stage in its development, about a year into its existence, when it needed a better way to manage itself as it kept
growing. They chose OKRs and have been using them ever since. OKRs had actually been around for a long time under other names, like strategic
But to this day, this incredibly
powerful tool, although increasingly popular, remains misunderstood.
OKRs is often confused with key performance indexes, or KPIs. KPIs tell you how you’re doing. It’s a benchmark. But the O in OKR, which stands for objectives, leads to the question, “What are we trying to accomplish?” It starts at the top, where the answer might be something like, “Make our shareholders more money”. Then it gets passed on to the level below, where the OKR for the head of
marketing, for example, might be, “Be the number one brand in our field”.
In the end, every level of the
company defines concrete objectives that support the top-level objective.
That’s why at Google, employees’ OKRs are accessible by all their
colleagues. You can look up the CEO’s OKR or your boss’s at any time. This allows employees to know why they’re coming to work in the morning. Everyone knows how their OKRs feed into the company’s.
This isn’t to say KPIs are bad. Actually, KPIs and OKRs work really well together. KPIs allow you to benchmark how you’re performing on your OKRs. But OKRs force you to ask, “Why?” Are you pursuing objectives what will “move the needle” for your company? Are you supporting the business’s growth?
Before even jumping into OKRs, start-ups and large organisations alike should therefore be careful that they’ve worked out the fundamentals of their strategy. But even when that is clear, there are four common failures to watch out for when implementing OKRs.
One, not being clear enough and not being accountable enough. Two, not knowing who owns the OKRs. Three, leadership not following up. And four, choosing the wrong
The objectives should not be too easy – they should be inspiring. Moreover, the reason behind each objective should be clear. Let’s say your objective for your website is “achieving a 20 per cent conversion rate”. Why? Why does this matter? If I ask a company “why” and they can’t answer, then the objective is wrong.
This is why OKRs aren’t a standalone topic. They are an extension of growth. OKRs force you to focus on the tangible things you need to accomplish to say you have met your objective. And if every team in your company does that, everything falls under the same objective. That’s the beauty of this
system. Everyone is accountable and everyone works in unison.
Hai Habot is a tech executive from Silicon Valley. Has been practising and teaching OKR at top accelerator programmes, including Google Launchpad and dtac accelerate.