When we were brainstorming an introduction to this article that would clarify the OKR method and its role in building an effective company strategy, we were looking for an example of the “Objectives and Key Results” model in action. We were reminded of the first season of the British TV series Miracle Workers, based on the novel What in God’s Name by Simon Rich, which depicts “a heavenly office” life represented by a large company called Heaven Inc. We won’t spoil the plot here; our focus is on one crucial department of this company, responsible for fulfilling people’s prayers. In the series, this department is underperforming. The prayers are handled by an experienced angel, Craig, who is passionate about his job and seems well-suited to it. So why are there so many unanswered prayers on Earth?
The issue lies in the fact that if you ask Craig about his job, he will tell you that he simply processes prayer requests from 9 a.m. to 6 p.m. Craig works solo in the department, and he is unaware of the activities or projects of other Heaven Inc. teams. However, one day, an HR specialist assigns the ambitious Eliza, who has always aspired to make a significant impact, to assist Craig. If you ask Eliza about her role, she will tell you that she strives to make Heaven Inc.’s customers happy. Then it turns out that the fate of the entire planet depends on the timely and high-quality fulfillment of one special earthly request. Now even Craig realizes that his job is much more than just performing everyday tasks. It turns out that he is making a huge contribution to the company’s most important strategic goal of preserving life on Earth, which he didn’t even realize.
The scenario above illustrates that even when employed in a large, world-changing company that influences many critical processes, most employees are unaware of the global goals beyond their tasks and the extent of their contribution towards these goals. In other words, when individuals understand the purpose of their mental and physical efforts, they feel valued, leading to enhanced engagement, teamwork, and personal investment in achieving a shared goal. The OKR (Objectives and Key Results) method aids in altering and broadening employees’ understanding of their daily work. If Heaven Inc. implemented OKRs in Craig’s department, it would look like this:
Objective 1: Enhance employee awareness of their significant contribution to people’s happiness to boost engagement and performance in the department.
Key Results: All employees are aware of the company’s strategic goal and understand their role in its achievement.
Initiatives: Organize motivational sessions for staff highlighting the importance of their role in fulfilling people’s prayers; set up a system of weekly notifications about positive feedback and the level of individual contribution to the realization of these prayers; conduct a survey among employees to assess their awareness of their significance and motivation.
Objective 2: Improve the efficiency of processing people’s prayers.
Key Results: Decrease prayer processing time by 20% compared to the previous period; increase the percentage of successfully fulfilled prayers by 15% compared to the previous quarter.
Initiatives: Conduct training to enhance staff skills in handling the most complex and uncommon prayers; systematize frequent and typical prayers to automate their processing based on successful cases.
Objective 3: Elevate people’s satisfaction levels.
Key Results: Increase the volume of positive feedback by 25% compared to the previous period.
Initiatives: Collect and analyze customers’ feedback; introduce a program of constant communication with customers to selectively receive additional feedback and consider their wishes.
Since everything is a bit clearer, let’s take a closer look at the OKR method.
Basic principles of OKR, or “Measure what matters!”
OKR includes a simple but effective concept of building a strategic goal, as well as methods of focusing on key goals and measurable ways of achieving them.
The OKR system, which is widely used by modern companies, was created by John Doerr based on Andrew Grove’s first goal-setting concepts, which appeared during their joint work at Intel. Later, in 1999, Doerr presented the OKR method to Google’s leaders, where John shared his finalized philosophy of the integral link between goals and key results at a ping-pong table, where the company was holding meetings at the same time. Google’s owners responded positively to Doerr’s OKR framework and adopted it to create new successful cases, and they still use it today. Over time, more and more well-known companies began to use the OKR formula, including LinkedIn, Netflix, Facebook, and Microsoft.
The main components of OKR are “goals” and “key results”. The goal in this context is an ambitious but realistic goal that a company, a team, or even an individual wants to achieve. Key results here are not represented by a list of tasks; they are changes that are a measurable indicator of achieving a strategic goal or approaching it. Here we can also add the concept of a key initiative, a term that, although not included in the OKR acronym, is an integral factor in the implementation of the method, as it refers to all the actions that OKR participants take to achieve goals and key results.
The regular use of OKRs creates a positive habit of identifying and agreeing on project goals, making the goal transparent, shared, and understandable to everyone. Such a model will help everyone focus on achieving something truly meaningful, rather than on routine tasks that cause employees to lose interest and engagement.
Various variants of OKR templates have been created, but they all have common guidelines that are important to mention:
- Focus on what is most important within a defined time frame, or as John Doerr said, “Measure what matters.” In other words, set no more than 2–3 strategic goals per quarter and direct the efforts of all participants toward achieving them.
- Always set a reasonable timeframe for achieving OKRs—neither too short nor too long. An ideal option is to set goals and review them quarterly.
- OKRs require continuous monitoring and reporting. To facilitate this, form a team led by a leader, where each team member is responsible for their key initiative.
- Set your goals slightly higher than expected. When you achieve even 60% success, the actual success rate will be higher, and you’ll gain more knowledge and experience than if you had set a lower bar.
Why has the OKR method become an integral part of successful business processes in today’s reality?
Modern businesses face challenges in uniting teams around common goals. The main difficulty arises because employees often work in different offices, cities, and even countries. Additionally, the hybrid work format—where specialists prefer remote work—has become commonplace. As a result, communication about “live” work events has significantly decreased. People are less aware of their colleagues’ activities or the project problems they’re solving. Workers tend to focus solely on issues related to their specific department.
To optimize processes, companies often hire outsourced employees. These individuals are frequently motivated by rewards for daily tasks, as they lack access to the benefits enjoyed by full-time colleagues. This situation affects their motivation and engagement.
All the above factors affect not only the quality of work but also the retention of talent, as there are far fewer factors that strengthen a specialist’s attachment to the company in a hybrid work format. Ultimately, it is easier for a specialist to break this weak connection by moving to a place that offers stronger corporate interaction.
How does the OKR method address these challenges?
- Tasks organize employees within their specific responsibilities, while goals coordinate the efforts of all teams. In this setup, everyone understands that their contribution is a crucial part of achieving the overall goal.
- The OKR method transforms the mindset of employees, turning them from mere performers into committed business partners who treat the business as their own. This shift means that people focus not on the KPIs of their daily work but on the outcomes that result from meeting these indicators. This approach intensifies the focus on achieving strategic goals, pushing non-priority targets into the background. It promotes a focus on the quality of work rather than the quantity of activities.
- OKR clearly delineates the areas of interaction between teams that previously may not have realized they were working towards the same aims. This method strengthens corporate relationships by fostering a sense of unity among specialists and promoting a team mentality.
Implementing OKR and the Role of HR in Achieving Company Goals
Integrating the OKR method into the company’s DNA requires a comprehensive approach. However, it can become your “elder wand”—the magic key to your business’s sustainability.
Before rushing to implement OKR, understand why you need this system. Leaders should identify all problem areas and formulate a clear answer based on reliable analytical data. An objective assessment of your weaknesses will allow for a more accurate formulation of goals and key results.
We recommend conducting a data collection campaign to assess employees’ understanding of your key project goals. At this stage, it would be beneficial to involve HR specialists. They are experts who understand people and have the tools to reveal how employees perceive the company at this moment.
Begin implementing OKR not for the entire organization immediately, but gradually scale it up. It’s easier to learn how to work with the method in a smaller setting than to cover all your processes at once.
This is the approach that Omar Shahine, Corporate Vice President of Microsoft, once chose when the company first started using OKR, and it worked, so why not adopt this successful experience of gradual integration?
OKRs should serve as a constant beacon guiding your daily operations. It’s not enough to mention OKRs at the beginning of the quarter and then forget about them. Nor is it sufficient to remind people of the OKR every week; it must become a daily habit that inspires and maintains focus. At the same time, don’t assign the entire team the responsibility of maintaining the beacon’s light, because when everyone is responsible for something important, it means that no one is responsible. Choose an OKR leader—a lighthouse keeper—who will guide the light so that your teams—the ship crews—stay on course towards the strategic goal.
Often, HR professionals are chosen for this role. This is unsurprising, as these individuals not only communicate the company’s values and invest significant effort into building an HR strategy and a cohesive team, but they also hold the keys to understanding the employees and the connections between departments. Therefore, it is crucial for HR professionals to understand the OKR methodology, explore its techniques, and learn about specialized systems for setting goals and key results. Moreover, they should embrace the role of a leader.
Explore the modern solution for company goal setting, which will serve as an efficient tool for HR professionals.
One of the most effective goal-setting models and methodologies
When implementing the OKR methodology regularly, it is vital to set up a general model for setting key goals, from the formation of the goal to its integration into the operational framework. We have identified two primary models of goal setting and will explain how their methodologies differ.
The first model, known as the top-down model, is common in companies where goal setting is initiated by top management. Top managers set up the key goal and communicate it to department heads, who then distribute the goal throughout the company. The advantage of this model is that executives are no longer responsible for the risk and can focus on achieving the goal, trusting the chosen vector. However, this method is most effective when top management first discusses its decisions with the entire team and identifies goals, considering the opinions of employees. Without personal involvement, specialists may feel detached from the OKR, perceiving that they are fulfilling someone else’s goal rather than contributing to a shared aim.
In contrast, let’s examine the bottom-up model, where goal setting is initiated by the employees themselves. This methodology is based on the premise that the employees who will be responsible for the relevant key initiatives will form the goals, as they are the specialists who best understand the daily processes. The proposed goals are then approved by senior management, presented to top management, and ratified by all OKR participants. This model is favored by Microsoft, as it does not restrict the creative aspect of the goal setting process. Instead, it adds value for employees, enhances their engagement, and fosters their creativity and innovative solutions.
For those seeking a compromise, it is recommended to balance the two models, with 50% of OKRs being “top-down” and the other 50% being “bottom-up”. This approach aims to find a balance that is comfortable for everyone.
Effective tools for constructing OKRs and flexibly managing strategic goals
It is advisable to delegate the construction of the hierarchy of roles in your OKR system to specialists primarily involved in team building and fostering relationships within the company, namely, HR specialists. If the processes in your HR department are people-oriented, communication should not pose a problem. Moreover, HR professionals typically already have effective practices that will aid in the more efficient implementation of the OKR method. This includes a well-established system of surveys, questionnaires, training, and employee development.
A successful solution that includes ready-made templates and convenient tools for working with OKR participants is SMART HCM & LMS, a system developed by SMART business based on Microsoft technologies. The system’s advantages include its coverage of many of the HR department’s tasks related to team building, as it offers automated solutions for recruiting, onboarding, training, and analytics. You can easily and quickly create a database of OKR participants, define their roles in the system, and then readily make the necessary changes.
So, if your busy HR specialist also serves as an OKR leader, SMART HCM & LMS will handle routine tasks, allowing the specialist to focus on the main thing: people. In addition, ready-made training modules can be easily adapted to quickly familiarize employees with the details of implementation and the intricacies of working with OKR. You will be able to assess the level of innovation adoption in teams, analyze attitudes towards a chosen strategic goal, or collect opinions to help define key goals.
OKR values consistency, so it requires constant monitoring, and SMART HCM & LMS will assume some of these responsibilities. For example, on days when you have less time to communicate with your teams, use the extensive functionality of the tools and set up automatic reminders about the key goals of the participants.
Boost the motivation of your OKR participants by creating your own reward system with engaging game mechanics. This will foster healthy competition, enhance engagement, and increase participants’ desire to reach key goals without being tied to financial rewards, which is also an important principle of John Doerr’s OKR.
The SMART HCM & LMS system has a simple and intuitive interface that allows you to easily perform complex tasks, such as generating and uploading analytical data related to key employee results. And since we’ve already touched on the topic of analyzing OKR results, we would like to note that this method is also useful for evaluating and summarizing results. One of the founders of the method, Andrew Grove, advises a simple “yes or no” approach, where we simply check “yes” or “no” next to each of our KR1, KR2, and KR3, depending on whether we have achieved the goal. This analysis, or any other alternative, can be easily implemented in SMART HCM & LMS.
Don’t waste your energy on routine tasks—invest your resources in achieving goals
In summary, we want to emphasize that OKRs are primarily about gaining the right perspective on your actions, applicable not only in your professional life but also in your personal life. Suppose you’ve been feeling stressed lately or suspect you’re nearing burnout. Consider your nervous system as a large corporation responsible for emotions, and try to manage the situation by applying the OKR formula:
Objective: Improve your emotional health.
Key Results: The time it took to fall asleep decreased by 20%. You managed to identify one of the causes of frequent anxiety and started working on its solution by developing an individual plan with a psychologist.
Initiatives: Visit a psychologist once a week for 3 months; practice Zen meditation before bed at 9:30 p.m. for 3 months; start a gratitude and feelings diary and write down positive moments and words of gratitude for them every day.
Of course, you can have any goals and desired key results, but the main thing you need to do is use this system. Then everything will work out.
Begin building your own “Heaven Inc.”—your dream company—by implementing an OKR goal-setting strategy right now. The SMART HCM & LMS platform will serve as a useful tool to help you realize your plans more efficiently and easily.
