So, you’ve read our guide about what an OKR is. At this point, you may be asking yourself, 'what are the best practices for running an effective OKR program?'
From working with companies of 20 employees up to 300, there are a few common threads we’ve identified. In this post, we’ll cover five essential traits that we have seen successful companies use to drive their OKR framework and overall growth. If you’re looking to create an impact on your company’s direction, you’re in the right place.
1. Getting the Executive Team to Buy-In
Making sure the entire leadership team understands Why you are using OKRs and How they can drive growth is critical to success. If OKRs are going to help your team close the gap toward your next round of funding or drive your next big product release, it’s important that there is buy-in from the top down in your organization.
Not every member of your executive team needs to be an OKR expert. They should, however, understand the framework enough so that they can lead their individual teams and set effective goals that align with the company’s overall vision for growth.
What we recommend
If you’re just starting out with OKRs, have your executive team create two to three OKRs for the next quarter that will help you get comfortable with the framework. After a quarter or two of the executive team using OKRs, everyone should start to feel comfortable enough to begin introducing their teams to the framework and expanding OKRs across the company.
One way to get everyone familiar with OKRs is to have the leadership team read Measure What Matters by John Doerr. He’s the individual who originally introduced Google to OKRs in 1999. The book outlines the power of OKRs and provides some practical case studies from several companies on how they used the framework to explosively grow.
Don’t have time to read an entire book? Check out our 5 minute read, outlining what an OKR is.
2. Use the 3 by 5 Rule
By now, you’ve probably heard how powerful OKRs can be as an operating framework a few times. But you know what else they can be? Challenging. That’s why we recommend the 3 by 5 rule.
The 3 by 5 rule is twofold. When setting objectives as a company, department, or team, remember to only focus-on three to five objectives for the given timeframe. Additionally, for every Objective you set, limit it to three to five Key Results that you’ll use to determine success. Confused? Let’s break it down a little further.
Why it’s important to only set 3 to 5 Objectives
By limiting your company/department/team’s goals between three and five Objectives, you’ll be able to narrow your focus and ensure everyone understands what they should be working on, when they should be working on it, and why it’s important.
OKRs are an effective tool for employees to use as a guiding force when they ask themselves, “What should I be working on right now?” Keeping Objectives between three and five may seem like you’re not thinking big enough, but over time you’ll find that tightening your focus will ensure every project, sale, or piece of code your team delivers on is pushing the business forward.
How keeping Objectives to 3 to 5 Key Results drives success
Key Results will look a little bit different for each individual Objective. Many of your Objective’s Key Results will be very similar to the Key Performance Indicators (KPIs) your team was already tracking in Salesforce, Quickbooks, JIRA, or other systems of record you are using to track performance. They can also be more strategic, such as Create a Content Calendar for Q3 or Develop Employee On-Boarding Experience Package.
Limiting your Key Results to between 3-5 will help you identify what are the essential drivers to success your team should be thinking about. These are going to be the metrics that drive growth for your business. It’s important that the Key Results are top of mind for your employees and they know how the results are pacing to the goals you set as an organization.
Want to make sure your team’s Key Results are always fresh? Learn how our Operations Platform eliminates manual data updates and starts automating your results.
3. Establish your Length and Check-In Frequency
One of the reasons that OKRs flat out work is that they are time based. By defining parameters for when something needs to be done, it forces action and creates an impact for your team.
What’s worked exceptionally well for our partners is to begin by setting annual OKRs that will help drive your growth path for the next twelve months. Once you’ve determined the 3 to 5 Objectives for the year, you can start to break them down quarter by quarter. Your quarterly OKRs should be related to your annual Objectives. Think of them as stepping stones toward your goals for the year.
When to update your OKRs
Life at a startup moves fast. You’ll want to establish a check-in cadence for how you’re performing on your OKRs. This can be a simple Green/Yellow/Red status update. Rather than waiting until the end of the quarter to see how you did, we recommend weekly or bi-weekly check-ins to see how your team is pacing toward success. At a minimum, you should be updating your OKRs once a month to make adjustments with your team.
You can use these check-ins to not only track progress, but to take a step back and ask the question, “Is what I’m focused on still relevant and important to the business?” With the global events of COVID-19, most businesses had to adjust their goals based on the new reality we all faced. Establishing a regular check-in cadence will also keep OKRs front and center for your team. If you’re interested in hearing how other high growth start-ups track their pace each quarter, you can always talk to one of our OKR experts.
4. Review, Reflect, Create
So your leadership team is bought-in, you’ve used the 3 by 5 rule to set your OKRs, and you have even established a rhythm for tracking your success. The next piece you’ll want to think about is how you review your OKRs at the end of the quarter.
Your regular updates, whether they were weekly, bi-weekly, or monthly, will make this process easier. When reviewing your OKRs, there are two questions you should ask yourself:
- How close did I come to the goals I had originally set?
- How can I use my performance from this past quarter to set new OKRs for the next quarter?
For the first question, it’s important to grade your performance. This will help you understand whether or not you set the bar too high or too low for your team. If every single OKR was successful, you should consider upping the stakes for your team. If you find out that most of your OKRs didn’t perform well, that’s okay too. You can adjust your new goals for the next quarter.
Not every OKR needs to be hit. While it would be amazing to find out every single OKR your team had set was blown out of the water, it’s probably not a realistic expectation for your business. The important thing to remember is that OKRs should help propel your business forward. If an OKR challenged your team by pushing them out of their comfort zone AND you saw increased results, you can consider it a success.
5. Just. Get. Started.
OKRs are more of an art than an exact science. It’s important for everyone to put their own spice and flavor on the framework. Determine what works for your team. At the end of the day, your business is unique and finding out what drives success will only help you repeat the wins over and over until you are a well oiled machine.
You can’t do any of this though if you simply don’t get started. OKRs have proven to help build some of the most successful companies we know and celebrate today. Google, Facebook, Spotify, and many more use the OKR framework because they know it pushes their business forward. If you want to start measuring what matters to your business, you can always reach out to our team for advice on where to get started.
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