What Your Executive Team Needs to Know About OKRs (Objectives and Key Results)

With the recent success of the best-selling business book Measure What Matters by John Doerr, OKRs have become a hot topic for executives trying to bridge the gap between Strategy and Execution. For years, I have set corporate goals with my executive team and have strived to execute them, sometimes with great success and sometimes not. The process of setting corporate goals and leveraging them to make meaningful progress on key organizational strategies was often subjective and sometimes difficult to measure.

While we were generally pleased with our strategic execution during the 20 plus years of our business, we wanted to move toward a more objective (and metric based) way of measuring our strategic goal progress. After reading Measure What Matters with our leadership team, we decided to pursue an OKR implementation strategy and discovered a practical approach through a book by Paul Niven and Ben Lamorte called Objectives and Key Results: Driving Focus, Alignment and Engagement. Utilizing Niven’s Training (OKRsTraining.com), the OKR approach to organizational goal-setting has helped us gain deeper insights into the execution of our most important business strategies.

A Better Solution for Corporate Goals

Prior to implementing the OKR approach to corporate goals, employees, teams, and departments aligned to our corporate strategic goals would often report progress in terms of percent complete but couldn’t substantially justify it with real data. This created inconsistencies across the organization in terms of our visibility of execution on a particular strategy.  

The Key Results of the OKR methodology are intended to be metric-based whenever possible, which drives a more disciplined approach for setting goals with clear outcomes and better communication while executing strategy. Holding weekly OKR data reviews at the executive level gives us much greater insights into what is being achieved as related to achieving corporate strategy.

Organizational Benefits for Implementing OKRs

OKRs provide clarity to the entire organization on  our top priorities by detailing why our strategies are important and how employees can align to help us better execute the defined strategy. They serve as the foundation of our Continuous Performance Conversations which happen every week throughout the company. Using OKRs not only helps us as a senior leadership team, it also helps every employee define and discuss their own unique contributions to the corporate strategy. This approach to organizational OKRs leads to more meaningful conversations for teams and individual contributions. OKRs have led to more engaged employees who feel more empowered because they understand the value of their role and their individual contributions.

The Challenge of Implementing OKRs at an Organizational Level

OKRs may seems simple, but they require a lot of discipline in executing a strategy effectively. There are additional challenges as well when it comes to communication, training,  accountability, and  continual refinement of the OKRs--especially if the OKR process is new to your organization.  This is in addition to the challenge of balancing strategic execution with the day job of getting things done to keep the business operating.

Implementing OKRs can be a significant change management initiative. It’s important to help people understand that you’re not just changing the terminology of goal-setting, or bringing in a new fad, but rather your organization will be using a disciplined  approach to pursuing objectives that are important to the company while generating more meaning for the individual employees.  Even so, the prospect of this or any significant change can lead to unrest or uncertainty among your employees. Change management has to be taken into account in your implementation plan to make sure the initiative takes hold.

At our company, we formed two small teams: a change leadership team and a change input team. The change leadership team helped to create company-wide communications and a training plan. The change input team worked with many teams, managers, and individuals, to solicit feedback about the process at every level of the organization. The change input team is critical to understanding the real level of effort needed to fully implement the change, while keeping a realistic mindset about the expected impact on business results.   

One of our keys to success was investing in training using an experienced OKR  consultant to help guide us. Paul Niven, author of the book Objectives and Key Results,  first trained our senior leadership team  on OKRs. Having a clear understanding of the purpose of OKRs and how they work from an executive level and was an important step to ensuring the initiative would be successful. Niven then facilitated our annual strategic planning session and helped us roll out the plan, including OKR training to  employees across the organization.  The process of getting OKRs fully implemented into the operations of the company can take anywhere from 6 months to a year, depending on the size of your organization and management of the implementation process.

OKRs Increase Collaboration Between Senior Leaders

Developing our Annual Strategic Plan – After OKRs training with our consultant, the most important thing we changed in our annual strategic planning was to have our senior leaders break into small teams of 3 to work on every section of the strategy. This approach allowed for each sub-team to work on EVERY area of the Balanced Scorecard.  Each team brainstormed and then collaborated and negotiated with the other teams to come up with the best OKRs for each corporate perspective in Finance, Customer, Process, Learning and Growth. 

The way we execute our OKRs with success is to establish continuous performance cycles that start with a performance agreement between each employee and their manager to clarify expectations of the OKRs. This is followed-up with weekly or bi-weekly check-in meetings between managers and their employees throughout the cycle using Inspire, which provides full transparency and the opportunity to coach and collaborate throughout the company in real-time. At the senior management level, the executive team gets together each Monday for a quick status meeting to discuss alignment and coaching opportunities, then meets again at the end of the week with business unit leaders to discuss progress, risks or issues. Finally, a deep dive data review is held monthly with all senior leaders to ensure the corporate OKRs are on track to meet the intended outcomes by the end of the performance cycle.

In summary, OKRs can result in a more effective approach to executing strategy for your organization. Before moving to this approach, my recommendation is to ensure your executive team is aware and committed to the challenges and benefits, and the change management associated with it.

For more information on OKRs and the differences between other goal-setting methodologies, download our whitepaper “Setting and Reaching OKRs Through the 5 Phases of Performance”.