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The Benefits of Using OKRs - How do OKRs work? Why does it Matter?

The Benefits of Using OKRs - How do OKRs work? Why does it Matter?

The Benefits of OKRs


OKRs are a strategy-execution framework developed by Intel’s Andy Grove and publicized by John Doerr in his book Measure What Matters. The framework was created to suit the agile and rapidly changing business climate of today’s times by aligning teams to strategic priorities, while measuring the growth and progress of the company as a whole. 


OKRs are used to help optimize the bridge between business strategy and execution. It improves overall business performance by setting a rhythm. Thanks to OKRs, companies are able to stretch and achieve super-ambitious goals, and it all boils down to being very mindful about choosing and measuring metrics.


Organizations like Google are known for their functioning on OKR systems to supercharge growth and drive change and innovation. More than 80% of Silicon Valley startups have adopted OKRs and experienced a meteoric rise in their growth. This is a framework that is built on critical thinking, streamlining teams to business objectives, and being thoughtful about how metrics and work is measured. 


OKRs are made up of three separate but interrelated fundamentals;


O - Objectives: What do we need to achieve and why do we need to achieve it?

KR - Key Results: How do we measure success?

Tasks and Initiatives: What do we need to do to get there? 




OKRs work with a simple philosophy - let’s shift the focus from Me to We. It ensures that teams work together to focus their effort on what is most important, in order to make measurable contributions that will drive the company forward.


To get the best out of OKRs, one needs to understand the fundamentals. OKRs are not a performance evaluation tool, nor are they a task list to fill-and-forget. Rather, OKRs celebrate how each employee contributes towards achieving the larger mission and improves the company’s performance by setting a cadence for review, feedback and conversations. The best part is the flexibility of OKRs - they are never set in stone, and they can and should be revised for changing business climates. 


OKRs can and should be revised for changing business climates


The Benefits of OKRs


The OKR framework is both simple and vast, and it comes with many benefits. Most of these benefits are interrelated and affect each other. Let’s take a look at what makes OKRs so special!


How OKRs optimize strategy-execution



How OKRs optimize strategy-execution


1. Clarity:


OKRs bring with them a systematic approach to goal-setting and execution, which provides amazing clarity throughout the company. By focusing on measurable outcomes, any member of the company has a strong understanding of:


  • What defines success, and 
  • How to progress towards it


This clarity helps in keeping everyone engaged and motivated. Each and every member understands what the objective is, why it's important, and can measure exactly how close they are to achieving the outcome.


Having an OKRs software also helps in clarifying the connected tasks. With just one glance, any member of the company can understand what the vital activities are, how far they are from completion, and who is responsible for moving the progress forward. It becomes easier to identify blockers, give feedback and change the method of approach whenever needed and makes strategy-execution efficient, agile, tenacious and flexible.

2. Focus: 


The OKR methodology is built on the principle of focusing on the vital few rather than the trivial many. The framework encourages teams to zero-in on what really matters. 


Just because a company is sustaining BAU metrics and employees are working hard on their tasks, does not mean that the organisation is set on a path to accelerated growth. This is why BAU is not a significant part of OKRs, and Objectives are few yet focused. Here’s where the 3x5 rule of OKRs sets in!


By applying the 3x5 rule of OKRs, companies are able to use the time spent on high-effort-low-impact tasks in a much more efficient way. The 3x5 rule states that OKRs at any level should follow these guidelines - 

  • No more than 3 Objectives per quarter
  • No more than 5 Key Results per Objective


Achieving audacious goals is made easier because OKRs manage the team’s attention. Rather than casting out a net to catch all imaginable goals, the team focuses on spear-fishing to bring home the real winners every OKR cycle. A good Objective keeps the team and organization driven and motivated, the Key Results clearly indicate progress, and the focus of OKRs turn ambitious goals into a habit!


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3. Flexibility:


OKRs are best executed in quarterly cycles. Each Objective is achievable within one business quarter, and long-term outcomes are broken down into shorter goals. This way, OKRs incorporate long-term strategic goals but also allows adjusting to change and trying new methods, while reducing the consequences of risks and waste.

The flexibility of OKRs is taken from Agile management. Agile is a popular project-management approach to driving initiatives/projects in OKRs with focus on continuous progress, incorporating changes in strategies with each iteration, while also moving towards accomplishment.

This helps organizations adapt to changing business climates by regular review of what works and what doesn’t work, and enables changes in the strategy whenever a change is required.

4. Ambition:

Using the spear-fishing approach of OKRs, companies feel emboldened to set Moonshot or Aspirational Objectives. Moonshot Objectives encourage the organization to dream big, get creative, and find innovative solutions. This, in turn, allows teams to experiment, try new methods and stretch to push beyond their comfort zones. 

Not meeting the expected outcome is also a part of the OKR culture. Failure is welcomed as an opportunity to grow, especially if your aspirational or moonshot KRs are not met. One should not be so afraid to fail that they do not attempt to reach their stretch goals. 

Even if the Moonshot OKR is not completely fulfilled, teams accomplish more than what they thought was even possible and achieve remarkable results!

How OKRs strengthen teams:

How OKRs strengthen team


1. Team Alignment and Collaboration: 

When all employees and teams across the organization can connect their activities to larger organization outcomes, and when they know how their tasks contribute to the progress of organizational goals… that is when alignment sets in.

Alignment is the secret sauce in OKRs. OKRs are vertically and bi-directionally or cross functionally aligned. Alignment also calls out the allegiance each team has to another, and which Key Results need to be achieved to help move another KR within the organization.

With OKRs, leadership styles move from telling + directing to exploratory + participative. This is where you shift gears from ‘hand-me-down’ to ‘connect and align.’ Having alignment not just within teams, but within the entire organization, is what makes OKRs such an amazing framework.


Alignment also brings out the best in the CFR (conversations, recognition and feedback) systems. OKRs and CFRs go hand-in-hand, and CFRs act as the spine to a solid OKR implementation.


2. Autonomy and Accountability: 

OKRs are best set as teams or squads, not by team managers or leadership (although the leadership does get involved in the review process while setting OKRs). Team members can execute projects in their own style, while making contributions that are meaningful to them and that connect them to the organization.

OKRs are achieved on two principles: ownership and commitment.

When there is one clear owner for each Key Result, Milestone or action, that is when OKRs are successful. Having orphan KRs and milestones is not recommended. An owner should be accountable for each KR/milestone and drive the rest of the team towards progress. While ownership is the initiative, accountability is the follow-through. 

Although there is only one owner, committing to OKRs as a team is the best way to diminish fear as teams should be able to push and inspire each other - as compared to one individual being personally responsible for a failure, which may negatively affect confidence and performance.

3. Rhythm and Cadence:

OKRs need regularity and rhythm in order to help teams execute strategy with agility. The typical OKR cycle needs discipline around defining/crafting OKRs, having regular check-ins within teams and with leadership. This regularity and discipline sets the muscle and rhythm for teams to achieve their strategy with speed and rigor.

Weekly OKR Check-in meetings are one of the most important OKR rituals to motivate teams to keep making progress after the initial high of writing OKRs has passed. Check-In meetings are to OKRs, what multiple reps are to building a strong muscle. For continued success with OKRs, teams should get together weekly to discuss the task outcomes, KR progress, review their methods, and discuss plans for the next week. This sets the focus on achieving outcomes at all times.

4. Transparency and a Goal-oriented Culture:

A solid company culture is a result of communication, collaboration and accountability; none of these can be achieved without transparency. OKRs are set in teams and not privately by individuals to ensure this state of transparency throughout the organization. Another way to keep things transparent yet focused is through CFRs (conversations, feedback and recognition).

CFRs are key to having transparency, providing support, and keeping teams inspired by reinforcing teamwork. When OKR Check-in meetings are backed by CFRs, teams get clarity on progress made and the initiatives to focus on. Fitbots has automated features to boost your CFR, where you can give badges of recognition (and more) to teams and individuals.

Something else that creates magic and aids progress to OKRs is Conversation. OKR conversations are specific, focused and outcome-based discussions where teams come together to discuss progress on their outcomes, achievements and learnings. While they celebrate their achievements and wins, much of the conversation is focused on addressing the blockers and finding solutions to decongest the route to achieving your OKRs.

The Final Verdict


OKR is the framework needed to supercharge growth and streamline efficiency in your organization. By using OKRs, your company builds a culture of focus and aligned teamwork. It creates a system where your teams can prioritize outcomes, measure and track progress against goals, and stretch to achieve meteoric growth. Google and Intel are just a couple of examples of the power of OKRs - when executed correctly, of course!

Here are a few case studies of well-implemented OKRs.

 

There are 5 superpowers of OKRs, which if done right help in achieving success with the implementation. These superpowers are Focus, Alignment, Engagement, Cadence and Stretch.

Are you feeling inclined towards digging into this awesome strategy-execution framework? Check out these tips-n-tricks and healthy OKR practices or find more information on our FAQs page!



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