Individual targets and their implementation are an essential part of many companies today. In most cases, however, these goals are still communicated top-down by superiors to their employees. After a year, you then look at whether the goals have been achieved. However, in times when entrepreneurial methods are becoming more and more agile in order to keep pace with dynamic market developments, it makes sense to adapt the processes of setting and achieving goals to agile developments.
The so-called Objectives and Key Results (OKR) method offers many advantages. This method was originally developed at Intel, but is best known for its application at Google. Today, it is popular in many companies. The method is based on two main components:
1. The term „objective“ refers to a goal-setting, i.e. a process in which one or more people jointly agree on a state that they want to achieve together.
2. The second aspect is the so-called „Key Results“. These are quantifiable, i.e. objectively measurable, variables that are directly linked to the objectives or express them directly.
Objective: Improve customer satisfaction.
Key Result 1: Increased customer satisfaction ratings from 75% to 85%.
Key Result 2: Reduced the average handling time per call from five to four minutes.
Key Result 3: Increase the first-call resolution rate from 70% to 80%.
Team-oriented formulation of objectives
Even with the use of OKRs, the objectives are of course derived from the corporate strategy. However, it is now crucial that they are formulated jointly by the team that will later achieve them. On the one hand, the collective intelligence of the team is accessed, and on the other hand, the objectives are linked to the motivation of the individual members of the team from the very beginning. After all, goals that you have set yourself are pursued with much more motivation than pure guidelines from above. The top-down method does not meet these demands.
Implementation and monitoring of OKRs
After the first planning workshop, in which the objectives and key results for the coming quarter were jointly determined, they meet weekly to assess progress. This is backed up with a percentage so that progress can be specifically named and monitored. After one to two months, the current cycle should then be analyzed in a review meeting. Since it’s an iterative, agile methodology, these review meetings also give you the opportunity to adjust goals that turn out to be unachievable or inappropriate for some reason. At the end of the quarter, there is a retrospective to determine the learning content and experiences of the cycle and to incorporate them into the next planning meeting.
Tools to support the OKR method
In the meantime, there are a number of tools that support the application and implementation of OKRs. It makes sense to use one of these tools to make all objectives and key results and their achievement accessible to all areas.
OKR and corporate culture change
However, the method will only be truly successful if it is accompanied by an entrepreneurial cultural change of openness and transparency. For example, when introducing OKRs in a software company, I found that successful implementation requires a significant degree of transparency. All areas must disclose their objectives, their measures to achieve them and their progress. In addition, the focus is on the goals throughout the year, and everyone knows how the current goals are being achieved. Last but not least, this transparency protects against negative surprises and unpleasant conversations at the end of the year, when it is already too late to turn things around.
Overcoming Resistance and Positive Consequences
However, many companies – and especially management personnel – initially meet these requirements with great skepticism. For this reason, the implementation of OKR is usually accompanied by the aforementioned cultural change – namely exactly when the other structures of the company are not yet up to the requirements for the application of OKR. However, once these prerequisites have been established and become a vital part of the company, there is no turning back: the benefits come to fruition. Redundancies are avoided, ideas are exchanged, the company’s communication culture improves, and support for the achievement of goals arises naturally in meetings. Both economic and social conflicts can be resolved more effectively, quickly and honestly under these conditions. The frustration that comes from the feeling of not being on the same page is replaced by a sense of collective community. This goes hand in hand with motivation, a sense of togetherness and a focus on achieving goals, which together in turn ensure that goals are achieved more effectively. This development, in turn, leads to new motivation and commitment. Theoretically formulated, one could also speak of a „self-stabilizing system“.
OKR: The Game Changer
If this method is introduced together with the willingness to change the entrepreneurial culture, I am convinced that it will be a real game changer. I highly recommend them for more employee satisfaction and engagement and, of course, for better goal achievement!
Tabea Henrich – Senior Consultant