Although the OKR method may seem simple, in practice it’s easy to make mistakes that can determine their outcome. Through trial and error, Finiata has learned to successfully utilize the OKR method to achieve business goals, while finding solutions to avoid common mistakes.
See what conclusions Finiata has drawn from implementing the OKR method.
What OKRs are NOT
Treating OKRs as a to-do list. OKRs are not used to list tasks that need to be done. It’s a tool for working on and achieving your strategy. Rather, focus on what you want to achieve and then adjust the appropriate set of actions.
Using OKRs as a performance review. This method is designed to unite employees and teams, define common goals, and pursue them together – not to rigorously evaluate results. The OKR can indicate whether you are moving towards a goal, but it does not measure performance.
Implementing only parts of the OKR method. Either do it all the way or don’t do it at all. If one team in an organization does not apply the method – then as a whole company you won’t be able to take part in the overall pursuit of company goals.
Setting individual goals. OKR is a method for organizations and teams, not individuals. The goals it contains must relate to a larger whole and be generic, with which the entire company can identify.
Achieving goals at any cost. Implementing the OKR method is about setting and tracking objectives – but they are more of a direction and guide than a very specific plan to be executed. Your job is to show whether the company is going in the right direction or not, not to present numbers or detailed data.
Set the right objectives and key results
While we already know what OKRs are not, let’s focus on setting up positive examples to see how to avoid these mistakes. Their creation requires defining the objective and selecting the appropriate key results.
Examples of good objectives:
Objective: Rock the US market!
Objective: Be a great place to work!
Objective: Make our customers love our support team.
They are ambitious yet realistic in execution and aligned, and therefore are in line with the art of the OKR method.
Let’s add key results to the last example (assuming a three months timeline).
Objective: Make our customers love our support team.
Key result: <60h within customer calls (total time);
Key result: Total response time to customer calls of 1200h;
Key result: Average customer support rating of 95%+;
The proposed key results are measurable, specific, realistic, and time-bound.
These are the main characteristics of OKRs. However, to get the full picture of how they are being met, come up with initiatives that will help achieve the desired outcomes.
Initiative: Survey 10 customers for detailed feedback;
Initiative: Publish a FAQ;
Initiative: Launch in-app live chat;
From these examples, you can see how to set a proper goal and what key outcomes to choose for it so that the achievement of that goal can be measured., You should also have a better understanding of the kinds of initiatives you can take to achieve the goal.
What are the most common mistakes while applying OKRs?
Objective vs. Subject. The objective shouldn’t be too general and must be focused on what you want to achieve. For example – “Improve Customer Experience” is not a valid objective because it’s not a description of the desired state. This can headline the entire endeavor, but not a specific goal.
OKRs are not a gut feeling. A goal like “Better customer engagement” wouldn’t be a good goal because it’s too subjective and difficult to measure.
Adopting OKRs as a binary action item. OKRs are a strategy process. They lead to a change in mindset. We start small, we learn, we iterate, we do better next time. It’s not about adopting an OKRs strategic plan but following an OKRs strategy process.
KPIs are not OKRs. KPIs measure the performance of processes that are already in place; whereas OKRs are a strategy method for the future.
Think agility. If a goal is no longer relevant to your business – abandon it. This is not a tactic where you absolutely have to do something to the end. Also, deciding to abandon a particular goal can be a great opportunity to see where you are in achieving the strategy.
KRs need to be something easy to measure and track. If that’s not the case, then they’re not good OKRs. Key results can’t be too complicated, because you want every employee to use them. They shouldn’t require arcane knowledge to understand.
The perfect OKR process is not about achieving 100%. Good OKRs will likely not be achieved totally. That’s because although they’re meant to be realistic, they also need to be ambitious. If the team achieves them fully and too quickly, it can mean they are too easy.
It always pays to remember that OKRs are the direction you want to go, not a to-do list.
What to avoid when creating OKRs
We’ve already shown a good example, so now let’s take a look at what not to do.
Objective: To introduce the new employee benefits package.
Why is this a bad objective? Because it’s an initiative, not a goal. It’s not the state you want to achieve, it’s a task to be performed.
What would negative examples of key results look like?
Key Result: Complete rollout by June 1.
Key Result: Train employees on the new benefits platform.
Key Result: Update company portal with the new benefits information.
These are poor examples of key results because they are all initiatives with either no results or results that can’t be measured. The first example also has a specific due date, which is a no-no.
So how can we turn this bad example of an OKR into a good one?
Objective: Improve the onboarding process for new employees.
Key Result: The top (i.e. fastest) 10 hires of this quarter will have a total (i.e. sum) time-to-first task delivery of 1000 hours.
- OKRs are not a list of tasks, but the direction of the organization’s strategy development.
- Objectives and key results must be understood by all members of the organization.
- Don’t confuse an objective with an initiative. The objective should be a description of the desired state to be achieved.
- OKRs refer to the future, not the present.