Have you ever found yourself in a situation where you were working tirelessly but weren’t sure about the direction or impact of your efforts? A lack of focus can undermine even the most dedicated employee. As an integral part of a startup, it’s essential to align your actions with the broader goals of the organization. Herein lies the power of Objectives and Key Results (OKRs) – a performance tracking framework that can guide you and your startup towards systematic progress and success.
OKRs were first introduced at Intel and then popularized by Google in the late 1990s. Today, they are a cornerstone of many successful businesses. A study by Deloitte found that 92% of companies who effectively use OKRs report an increase in employee engagement. This can result in a 21% greater profitability, according to a report by Gallup. Given these numbers, it’s easy to see the transformative power of well-written OKRs.
This blog post will serve as your comprehensive guide to writing effective OKRs, helping you streamline your efforts, measure your progress, and propel your startup to new heights.
Understand the OKR Framework
Before we delve into how to write effective OKRs, it’s important to grasp what they stand for and why they are instrumental.
OKRs consist of two components: the Objective and the Key Results.
Objectives are clear, concise goals that are significant, actionable, and inspiring. They should answer the question, “What do we want to achieve?” Objectives should be set quarterly and should align with your startup’s overall strategy and vision.
Key Results, on the other hand, are measurable outcomes that track the achievement of the objective. They answer the question, “How will we know we’re making progress?” Each objective should typically have 2 to 5 key results.
When you combine an Objective with its Key Results, you get a powerful tool for strategic planning, focus, alignment, and tracking progress. It also helps to facilitate communication and coordination within the startup.
Steps to Writing Effective OKRs
Now that we understand the OKR framework let’s dive into the steps of writing effective OKRs.
1. Define Clear and Inspiring Objectives
Your objective should inspire and motivate your team. It should not merely be a list of tasks, but a statement that stirs up passion and focus in your team. To make an objective inspiring, it needs to be linked to the broader vision of the startup. For instance, an objective like “Increase our user base” is not as inspiring as “Become the preferred choice for online shoppers.”
Objectives should also be clear and specific. A vague objective leaves room for misunderstanding and can lead to misaligned efforts.
2. Set Measurable Key Results
Key results should be quantifiable, achievable, and lead to objective grading. Each key result should be tied to a number or a clear milestone that indicates whether the objective has been achieved.
The key results should be challenging but not impossible. Research from the Harvard Business Review suggests that when people are challenged to do 50 to 70 percent more than they think is possible, they often deliver.
Consider the objective “Become the preferred choice for online shoppers.” A corresponding key result could be “Increase daily active users by 40% in the next quarter.” This key result is measurable (increase daily active users), specific (by 40%), time-bound (in the next quarter), and ambitious yet potentially attainable.
3. Align OKRs with the Startup’s Goals
In a startup environment, it’s vital that every employee’s work is aligned with the larger goals of the company. The OKRs of individual employees, teams, and the startup as a whole should all be interconnected and mutually reinforcing.
Alignment ensures that everyone in the startup is pulling in the same direction, fostering a sense of unity and shared purpose. It can help prevent wasted efforts on tasks that don’t contribute to the startup’s overall objectives.
4. Make OKRs Visible and Review Regularly
OKRs need to be publicly visible to all employees in the startup. This transparency helps create a sense of accountability and allows everyone to understand how their work contributes to the overall goals.
Regularly reviewing your OKRs is critical in measuring progress and making necessary adjustments. Keep track of your key results on a weekly or monthly basis, and have a more thorough review at the end of each quarter.
5. Iterate and Improve
Writing effective OKRs is a skill that gets better with practice. Review the OKRs at the end of each period, learn from what worked and what didn’t, and apply these insights when setting the next round of OKRs. Remember, the aim is continuous improvement and alignment with your startup’s evolving goals.
Writing effective OKRs is more than just a skill; it’s a culture that needs to be cultivated within your startup. When executed correctly, OKRs can drive focus, foster alignment, promote engagement, and ultimately accelerate the growth of your startup.
Bear in mind the Pareto Principle, also known as the 80/20 rule, which states that 80% of outcomes result from 20% of causes. By focusing on the right objectives and tracking them with appropriate key results, you are likely to see significant improvements in your performance and contributions to your startup’s success.
Remember, effective OKRs are not just about achieving goals, they are also about the journey of growth and learning that takes you there. So, as you strive towards writing effective OKRs, also embrace the learning curve and the growth that comes with it.