OKR is a goal-setting system that aims to build a hierarchy of goals from the whole company’s level to an employee’s level. Objectives are measurable achievements that provide value to the company or customers, and key results are clear signs that a given goal has been achieved. But the best way to understand what OKR is to look at OKRs examples for a company itself.
OKR purpose
Work according to OKR will allow you to solve the following tasks:
- Build a logical hierarchy of goals in the organization, from the goals of the entire company to personal
- Focus the efforts of all staff in the right direction
- Correctly place accents and realize the most important goals
- Improve communication between departments so that everyone understands each other’s objectives
- Decentralize decision making by helping employees be creative
- Introduce a method of the transparent delegation of authority and responsibility for achieving results
Herewith, it is important to understand what OKRs cannot be applied for:
- This is not a system to monitor and control staff time.
- OKR Results Should Not Become the basis for financial motivation.
- OKR gives subordinates the ability to choose the method of achieving the objective without waiting for the manager’s command or approval.
How is OKR system built?
3-4 key results assess achievement of the objective. If there are fewer results, they can replace the objective, and if there are more results, efforts will be scattered to reach secondary indicators that have no real value. Key results must be ambitious, achievable, and quantifiable through impartial assessment.
The result of the objective is the sum of the scores of the key results. Since both objectives and results must be ambitious, it is normal to achieve them by 65-75-80%. If you regularly get 100% of your objectives, you are not setting ambitious objectives, and OKR has degenerated into an unnecessary obligation. If an objective is consistently 50% met, it indicates a structural problem in the organization that is preventing the OKRs from being achieved.
The objectives must be public. Most of the company’s objectives are formulated by management, but some are taken from the bottom up to increase employee engagement in the OKR implementation process. A set of Objectives is created hierarchically:
The company goals
↓↑
Team goals
↓↑
Individual goals
Key results are measurable and unambiguous indicators of reaching objectives; they determine the right actions. Like objectives, key results are built by the team.
So, starting from the whole company’s main objective, the objectives and key results of other departments are further built. It’s better to have a look at the example to understand how does it look like.
OKR Examples for the company
Objective 1: Develop the global corporate business
Key Results:
- Hit a monthly income of $200,000
- By the end of the quarter, increase online sales by 45%
- Open two new offline stores
Objective 2: Increase the rate of satisfaction of the company’s clients
Key Results:
- Survey 100 clients and get feedback
- Reach NPS 9 from clients
- Boost customer retention up to 97%
- Achieve 80% WAU product engagement
Objective 3: Build brand awareness
Key Results:
- Expand interaction with the media by 20%
- Launch a referral program for clients
- Find 5 new channels for brand PR
Based on these company OKRs, each departments of the company may have the following OKRs.
OKR Example for Development
Objective: Upgrade the performance of the product
Key Results:
- Decrease the number of critical errors by 20%
- Reduce the average application response time to less than 600 ms
- Decrease warning execution time by 7%
- Update database and make the data transfer
Sales Department OKRs
Objective: Boost sales through channel partners
Key Results:
- Hire 30 new channel partners in Asia, Africa, and Europe
- Conduct and complete onboarding of the new channel partners
- Each partner concludes at least 5 new deals
Support Department OKRs Example
Objective: Improve customer service satisfaction
Key Results:
- Raise satisfaction score of customers above 7.0
- Pull down the customer onboarding process to four days
- Decrease average response time from 3 hours to 30 minutes
- Pull down the number of complaints per quarter from 10 to 3
OKR Examples for Marketing
Objective: Increase the level of customer acquisition through social networks by 35%
Key Results:
- Conduct research to identify the three most popular social platforms among representatives of two new target audiences
- Take part in conferences at Clubhouse with industry leaders
- Reply to new comments on Facebook within two hours
- Increase the number of followers on Facebook and Twitter by 30%
For what period are OKRs set?
The term depends on the business. For example, if this is a trade, then most likely, the company has two active sales seasons a year. So, set the objective of the highest level for the year. Subdivisions can develop their own for six months. At the same time, it is allowed to correct them once a quarter. Another option is to synchronize goal setting with the start of the fiscal year.
In general, OKRs are usually set for a quarter or half-year. It is allowed to use a shorter period from one month to three. At the same time, once every two weeks, you can check how much the business has progressed. Change goals depending on your achievements.
OKR is not a magic pill that does all the work for you. It is an ongoing process of finding a balance between ambition and realism in setting goals. It is also important to understand that you should work with the delivered OKRs, and not forget them afterward.
