Boost Your Team’s Performance: The Complete Guide to OKR Goal Setting
Running a business without a clear goal is like driving your car aimlessly around town, hoping to end up somewhere good.
With no idea of what good looks like, you’ll spend too much time driving in circles without ever knowing where you’ll end up. Teams with no clear goals usually run out of time/money/motivation before they even see results.
This is where OKRs can help.
What is OKR?
OKR (Objective & Key Results) is a simple & effective goal-setting method that lets you define clear goals that can be easily understood, measured, and and tracked. Every OKR consists of these 2 components:
Objective: The exciting goal you’d like to achieve. You can treat this as your destination.
Key Results: Measurable criteria to indicate when you’ve achieved your objective. These criteria lets you know exactly what needs to happen to reach your destination.
Benefits of OKRs
OKRs represent your true north. That is, the ultimate goal that you and your team must work towards. Imagine having clear goals as your destination. This means knowing exactly what you’re aiming for. Naturally you’ll spend way less time doing useless work, and more time working on things that matter.
Having clear goals help knowing how far you’ve gone. With a goal to start with, at the end of your journey you’d know exactly if you got there, fell short, or ended up further. Your goals also give meaning. They give you something to be excited about and look forward to.
Additionally, here are other benefits you can get from OKRs:
Increased transparency and your team’s goals
Increased team productivity from knowing clear work priorities
More engaged teams from having clear sense of direction and achievements
Goals consistently tracked and achieved
How to write good OKRs
There are a few characteristics for both Objectives and Key Results that would make up a good OKR. By following these characteristics as a guide when writing OKRs, you can increase the effectiveness of your OKRs and have a higher chance of achieving your goals.
The table below provides an overview of the characteristics.
Example of a good OKR
From the above criteria, here’s an example of a well-formed OKR. Imagine your company wants to build a supercar that runs entirely on renewable energy so it can reach blazing fast speed while still being friendly to the environment.
This is what your OKR might look like.
OBJECTIVE
To build the world’s first environmentally-friendly supercar that brings the green-speed experience.
KEY RESULTS
Can accelerate 0 - 100km/h in 3 seconds
Reach top speed of 500km/h
Less than 30g/km of CO2 emission
From the example above, you can see how the objective and key results complement each other to bring clear and specific definition of what the team is aiming for. Note how the objective is written in a way that it’s inspiring, and would excite your team to contribute to achieve the goal. While the key results show exactly how the objective is translated into tangible and measurable outcome.
An objective without key results is just a fluffy plan that does nothing. Key results without an objective is just a list of outputs without a clear impact of how or why they’re important.
Linking initiatives to OKRs
Initiatives are the activities/work you do to reach your key results, and ultimately achieve your objective. If we go back to the OKR example above, here are examples of some initiatives the team would come up with.
Build new durable and lightweight car frame using recycled plastic
Build new engine that is resistant to extreme heat using vibranium
Develop new frictionless wheel system
Develop new energy source for the car using salt water and sunlight
Aligning Team Goals to Company Goals
One of the main advantage of OKR is that it simplifies the way you can align the goals and initiatives at the team level, to the company’s goals.
For example, let’s say you’re part of an Austrailan E-Commerce startup that wants to expand their reach and increase their market share for the year ahead. Here are examples of what the company OKR may look like, along with departmental/team OKR that aligns with the company goal.
Company-wide OKR (Yearly)
OBJECTIVE
Become top 5 e-commerce platform in Australia.
KEY RESULTS
Increase market share from 10% to 12%
Increase product revenue by 12%
PRODUCT TEAM OKR (Quarterly)
OBJECTIVE
To deliver a safe, trusted, and enjoyable platform for people to shop.
KEY RESULTS
Increase userbase by 7%
Increase product conversion rate by 5%
Improve customer satisfaction from 3.4 to 4.5
Increase MAU by 20%
Decrease churn rate by 15%
INITIATIVES
Simplify checkout process
Introduce loyalty program and gamification
Revamp pricing & package structure to include smaller product denominations
Roll-out rich knowledge-base for customer self-help
Install new servers to reduce downtime
Marketing Team OKR (Quarterly)
OBJECTIVE
To spread viral awareness of the company’s platform in an engaging and informative way.
KEY RESULTS
Increase website traffic by 20%
Increase company insights subscriber by 30%
Increase audience engagement by 15%
Increase CTR for ads to >8%
Maintain less than 2% unsubscribe rate
INITIATIVES
Run 3 paid partnership ads with Youtube influencers
Introduce daily educational contents on social channels
Sponsor 3 charity events
Run special product promotions
Introduce weekly podcast
HR Team OKR (Quarterly)
OBJECTIVE
To recruit world class talents and build a productive and enjoyable working culture.
KEY RESULTS
Increase employee satisfaction rate by 10%
Decrease employee turnover to 5%
Increase onboarding satisfaction rate by 10%
Increase internal promotion rate to 70%
INITIATIVES
Partner with 3 new recruitment agencies to find top talents
Adopt new HR management tool
Introduce regular employee social gathering
Revamp onboarding process to be more efficient
Conclusion
Teams with no clear goals will run out of time/money/motivation before they even see results. With OKR, you can define clear goals that can be easily understood, measured, and and tracked by everyone in your team.
A well-written OKR can serve as your true north. Knowing exactly what you’re aiming for will significantly cut down the times you spend on working on useless things, and lets you focus on the most important things. OKRs can also be used to align company-wide goals to team-level goals to ensure everyone in your team is working towards common goals.
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Looking for ways to boost your team’s performance? We can help.
Talk to us today to find out how we can provide the right approach for you.
Cover photo: unsplash/@spacex
