Goals inspire us to do our best work and achieve what we never thought possible. They also help break down our aspirations into bite-sized tasks, making success more manageable and helping us take action today to set things in motion tomorrow.
But, having goals doesn’t automatically lead you to success. When goals are too easy and attainable, they don’t challenge employees or push them out of their comfort zone. In order for goals to drive results, they need to be ambitious and almost uncomfortable. This forces teams to be creative, try new things, and push themselves to go above and beyond what they thought possible.
Making an effective goal starts with the right framework. One of the most popular goal-setting methods is the objectives and key results, or OKR framework.
Interested in teaching your employees and managers how to create OKRs to define and achieve success? Here’s everything L&D teams need to know about the OKR framework and how to get your employees to adopt this goal-setting method.
What is an OKR?
OKRs is an acronym that stands for objectives and key results. They are used by businesses to set goals at the company, team, and individual level. They include both qualitative and quantitative goals that, together, help companies strategically move forward.
OKRs are typically set at a quarterly cadence, although they can take place over a longer or shorter period of time too.
What’s the difference between an “objective” and a “key result”?
An objective is qualitative. It sets a destination to work towards and tells your team where they want to go.
Here are some examples of objectives:
- Expand customer service hours from 9 AM – 5 PM to 8 AM – 8 PM.
- Hire 5 engineers and 3 product managers by the end of the quarter
- Launch a redesigned website in Q2
A key result is quantitative. It helps you know to what degree you’ve achieved your objective. Key results can be measured in dollars, contacts, growth percentages, or any other measurable KPI that your company focuses on.
Here are a few examples of key results:
- Increase website conversion rate by 10%
- Successfully resolve 30% more customer support tickets
- Increase client NPS by 5%
How many objectives and key results should you have?
At the company level
At the highest level, a company may have one objective and 2-5 key results driving the business forward. For example, one of the company’s top objectives for the year might be “Increase annual revenue from $10M to $20M.” Key results under that might include, “Increase cross-sell revenue by 15%,” “Launch 5 new product offerings this year,” and “Reduce customer churn rate by 10%.”
At the department level
Each department will likely have multiple objectives and key results that should bubble up to the top-level objective. For example, this same company’s sales department’s goals might be, “Hire 4 new sales reps in Q1,” “Increase average deal size from $400K to $500K,” and “Increase sales calls per rep to 7,000 per quarter.”
At the individual level
At the individual level, each team member should also have 2-5 objectives and key results based on their department’s goals. For example, a member of the sales team’s quarterly OKRs might look like, “Call 7,000 prospects this quarter,” “Take at least 400 demo calls this quarter,” and “Improve win-rate by 5%.”
Here you can clearly see how each goal ladders up to the greater company goals, empowering everyone to understand how their contributions impact overall business success.
Common Reasons Employees Might Pushback on Adopting the OKR Framework
Any change your make in your organization will come with some form of opposition. If you’re considering adopting an OKR framework at your company, it’s important to understand what might keep your employees from embracing a new goal-setting method. That can help you address concerns head-on and ensure your training and roll-out process is seamless.
Here are some common reasons employees might be hesitant to embrace an OKR framework and how to quash their concerns head-on:
1. I have a “to-do” list. Isn’t that enough?
Explain that while a to-do list is useful, it’s focused on day-to-day tasks. OKRs should be your larger annual or quarterly goals that guide your day-to-day projects and measure the impact of your contributions to the company.
If employees are particularly attached to their to-do lists, don’t fret. Their to-dos should be directly connected to their objectives, and their objectives should give them a clearer understanding of how they should spend their time to drive the most impact.
Here are some examples of how objectives can inform employee’s day-to-day to-do lists:
|Objective:||Open offices in three new countries by year-end|
|To-do list item 1:||Book 3 office tours this week|
|To-do list item 2:||Write job descriptions for new office manager role|
|To-do list item 3:||Submit job opening to job posting sites|
|To-do list item 4:||Reach out to candidates and schedule phone screens for next week|
|Objective:||Hold 3 webinars to acquire new customers|
|To-do list item 1:||Brainstorm webinar #1 topics with team|
|To-do list item 2:||Reach out to potential speakers|
|To-do list item 3:||Confirm speaker and schedule kick-off call|
|To-do list item 4:||Request promotional assets from the design team|
2. What if I don’t achieve my OKRs? Should I just make easy-to-reach OKRs next time?
If you reach all your OKRs, you’ve likely made them too easy to accomplish. Remind employees that OKRs should be ambitious and push them to do their best work. Easily achievable goals neither help your employees do their best work nor help the business achieve success.
In fact, OKRs should have a 70% achievement rate, according to Google. A good rule of thumb is that they should be just difficult enough to feel uncomfortable. When employees have to stretch to reach an OKR, they grow and learn in the process. Employees should know that failing to reach 100% of their ambitious goals, while commendable, is not expected.
3. So, we just set OKRs in January and then revisit them in December?
If your employees forget about their key results until year-end, they’ll likely not achieve them. Remind them to review their OKRs weekly, monthly, or quarterly, as needed. As business needs and expectations change, OKRs might need to be adapted or changed altogether. Train your managers to check in on OKRs in 1-on-1 meetings, team meetings, department meetings, and performance reviews. Similarly, your executive team should also regularly discuss all-company OKRs in all-hands meetings and review progress towards achieving key results. This can ensure alignment at every level of the organization.
Your managers can really drive the adoption of the OKR framework at your organization, so be sure they’re properly trained on the importance of goal-setting and regularly discuss employee performance with their team. Here are a few ways your company’s managers can ensure OKRs are top of mind for their teams:
- Check-in on employees’ key results in 1-on-1 meetings
- Check-in on team’s key results in each team meeting
- Share a bi-weekly email with the team’s progress
- Give an update on the company-level key results as often as possible
4. Who decides what my objectives and key results should be?
Again, this is where you really need manager buy-in. Typically, managers will collaborate with both their senior leaders and their direct reports to create OKRs that are aligned across the business. All individual OKRs should bubble up to the team’s and all team OKRs should bubble up to the company’s goals.
Here’s an example of cascading OKRs:
At the company-level:
- Objective: Reach 20,000 net new customers by the end of the year
- Key Results: Reduce churn rate by 10%, Increase the onboarding rate of new clients by 15%, Increase new customer sign-ups by 30%
At the marketing department-level:
- Objective: Deliver 100,000 new leads to the sales team by the end of the year.
- Key Result: Increase audience reach by 20%, Increase on-site conversion rate by 5%, Host 5 webinars in Q1 to reach new customers and grow prospect database
At the individual-level of a Paid Performance Manager:
- Objective: Launch 3 new paid campaigns targeting users searching for the company name
- Key Result: Improve ad click-through rate by 2%, Decrease customer acquisition costs by 15%
5. Who needs to know my objectives and key results?
The more transparent OKRs the better. Top-level company OKRs should be available for the entire company to see and regularly referenced during company all-hands meetings. After all, employees are most engaged and motivated when they understand the impact their work has on the company at large.
Team and individual OKRs should also be written down and kept somewhere that employees and managers can easily find and review them, report on progress, and update them, as needed. While some larger organizations might have the budget for an OKR tracking software, you don’t need expensive software to adopt the OKR framework. Your employees can store their OKRs in a Word Document, in Google Sheets, or anywhere they can easily access them. Writing them down somewhere is crucial so your team is held accountable and can report on progress throughout the year.
Want to teach your managers how to adopt the OKR framework and support employee goal-setting? Sign up for a free Hone trial and try our Prioritize The Right Work class to learn how to set effective OKRs and prioritize your team’s tasks to maximize productivity.