OKRs: achieve your goals with Objectives and Key Results
- 2 July 2022
- Edited 14 March 2023
- 3 min
Large organisations such as Google, Netflix, and Samsung have been using the OKR method for many years. They regard it as a successful method for growth or innovation. This goal-oriented and flexible approach allows you to keep your business on track as an SME owner. Would you like to find out what OKR involves? And how to get started with it? You will find everything you need to know here.
OKRs help you adopt a structured approach to achieving your goals. In addition, you can respond flexibly to changes such as growth within your company and to external developments. This helps you get the most out of your business.
What is the OKR method?
OKR, an acronym for Objectives & Key Results, is a method for working within your organisation. You start out by setting your objective, and subsequently you link these objectives to measurable results (key results).
The OKR method revolves around the following 2 questions:
- What would I like to achieve?
- How will I achieve this?
These questions concern the goals that are important to your organisation. These might be financial goals, or they might be related to working environment, customer satisfaction, or the speed of work. You ask the questions at the company level, team level, and personal level. By working at these 3 levels, you ensure all your employees are working towards the same realistic goal.
Evaluation is a key aspect of the OKR method. In evaluations, you assess progress, celebrate your successes, and provide feedback. This is how you define the objectives more clearly, and make changes where necessary. The main priority is clear communication, so that everyone knows what the organisation is working towards.
Benefits of the OKR method
Closer involvement and internal collaboration
With the OKR method you choose to make results the driver behind everyone’s work. If all activities contribute to achieving these results, you work towards a shared goal. This promotes commitment and internal teamwork among your employees. Committed and engaged employees are more valuable and are less likely to commit fraud.
More focus and clarity
You can create clarity by breaking down your objectives into small, measurable results. All employees are aware of the priorities. Everyone is aware of the status of progress at any time. This makes it easier for you to implement your strategy at any level.
Example: a retailer chooses a specific revenue increase as a goal. He aims to achieve this by selling additional products at various events. This is the foundation of all his ideas. For example, he sells Dutch football-themed items for King’s Day and football events.
A quicker response to change
When using the OKR method, you choose several goals per quarter. This makes your strategy flexible. If there has been a major change in your business, industry, or in society, you can easily adjust your strategy for the next quarter.
Example: a hairdresser suddenly has 2 competitors when 2 new salons open up in his town. He sets a new goal: not to lose his current clients, but to increase their loyalty. He decides to introduce a loyalty card, offering clients a free haircut after 10 cuts.
How does it work?
To get started with the OKR method, you must determine your Objectives, Key Results, and Initiatives at 3 levels:
- company level
- team level
- personal level
You start by setting 3 to 5 objectives. These are the long-term objectives for the organisation, the team, and the individuals. You determine the objectives per year, as well as per quarter. This ensures that you keep the main objective in mind, while remaining flexible in the face of changing circumstances. Effective objectives are tangible, provide direction, and focus on clear actions.
- Effective objective: By the end of the year, I want to have at least 5,000 paying clients.
- Ineffective objective: I want to have as many clients as possible this year.
Next, you set out to achieve the key results for your organisation, your team, and individuals. These are the building blocks which lead to the objectives. Choose 2 to 5 key results per objective. Good key results are measurable, ambitious, and influenceable.
- Effective key results: During the first 3 months of the year, I find 200 paying clients through marketing in local media.
- Ineffective key result: I will use online marketing to reach as many people as possible.
The next step is about achieving the key results: the initiatives. This is the work you must do to influence the key results. ‘Initiatives’ refers to the duties an employee carries out to achieve the key results.
- Effective initiative: I introduce a new discount promotion every month, which I advertise in local weeklies and association magazines.
- Ineffective initiative: Every so often, I introduce a new discount promotion.
If you have trouble setting objectives, use the SMART method.
Convinced? Then it is time to get started! The OKR method enables you to conduct business in a flexible way, while setting strategic objectives. Effective communication is essential in this process. You can do this by continuously evaluating and redefining or modifying your goals. Getting space to provide input will keep all your employees committed. This is how OKR gets you the most out of your organisation.