We apply OKR methodology in Neti since 2014. We started from a quarterly planning, but then understood that no ambitious goals can be achieved per quarter. So we switched to semi-annual intervals.
Some goals were easily achieved, the others failed miserably, and the third ones were cancelled or deferred for the future. As a result, we gained a better understanding of how to correctly set, achieve and synchronize the leaders’ goals.
If you also want to see where your company as a whole and its individual managers go, our experience can be useful.
Objectives and Key Results (OKR) is a planning and objective-setting method, developed by Intel.
OKR lets synchronize the goals of company’s leaders, but it will not suit any company. Employees’ creativity is of no use and even harmful in a rigid hierarchical structure, where the order of a supervisor goes down for immediate execution.
In contrast to such, modern holacratic and turquoise companies — Google, Facebook, Oracle, Amazon — promote creativity and provide utmost independence to its employees. Teams and leaders independently set their own goals, which they record in an open document accessible to all. Every company executive sees the priorities of his colleagues, understands where the company as a whole and every single manager go. That is the essence of planning with OKR method.
OKR is an open document where employees describe their priorities for the future period. The methodology developers recommend setting quarterly goals. It appeared too often for us. Now we plan for half a year.
In a document each company executive records his priorities for the coming 6 months. The colleagues see each other’s priorities and this transparency facilitates mutual understanding. If employee studies machine learning, collects feedback from clients and defines business processes, it does not make any sense to ask him about operating profit surplus. On the other hand, if we have similar goals, we can work together in these directions.
An open document with priorities helps employees harmonize their activity for the company to move within the overall framework.
Clear measurable objectives
There should not be many objectives: each executive sets 2-4 objectives for half a year and then assesses the achievement level. Each objective has corresponding key results for correct assessment of achievements. It helps focus on the essentials and avoid vague goals.
Entry to a new market
Clear objective with key results
To enter the European market:
- To visit three European countries, to meet with 5 clients in each;
- To sign 3 new contracts with European companies;
- To get 2 first payments valued at over RUB 100,000
The degree of a clear objective fulfillment is easy to assess. In OKR the level of achievement is measured by the scale 0 – 1. It is advisable that you do not have 1 – the goals should be rather ambitious. 0.8 is a good rating. But if an employee assesses his achievements as 0.9 and 1 regularly, he might be setting very easy goals.
New growth drivers
OKR method exposes the problem of divergent interests of employees and the company. A transparent declaration system lets a supervisor see when an employee is paddling the wrong way. He may, say, copy the same goals from quarter to quarter or his objectives are not directly connected with the company development. It’s a reason to discuss the issue. Not to scold or to break an employee, but understand where his interest is. Perhaps, meet his demands and say let’s try.
One of our employees set the objective to study machine learning for the whole year. He quarterly copied this objective and kept talking to his colleagues about the importance and prospects of machine learning. Eventually, he captured everyone with his fanaticism and in 2018 almost every our executive has the objective “To make the first project in Machine learning” 🙂
Such situations may give birth to new ideas, services and products that then become the company’s growth drivers. This is the one who is passionate about his theme that is able to create a first-class product. The experience shows that if you want to just gain money going against heart, your chances to win the competitive race are very low. Since other teams in the market are burning with the idea and are ready to do what they love for the entire life.
But still the objectives should comply with the company strategy. If they are out of tune with the company values, they should be discussed.
One of our principles – “only happy employees can make the client happy”. If any of new executives set a target of introducing a system of penalties and punishment of employees, we would react immediately. Suppression of our colleagues’ rights disagrees with our view of the world and the company values.
Benefits of using OKR
To get new ideas. Employees of bureaucratic corporations are not used to express their impressions about the company. Their opinion can hardly change the whole system, that’s why there is no sense to waste time and efforts. We, on the contrary, say: let us fall out everything from your head. Let us articulate 2-4 goals of what is interesting to you and to the company, show them to everyone and try to fulfill them together.
To understand what is interesting to employees. If an executive likes working with trainees and training the staff, he won’t be forced to do marketing or bookkeeping. Those, who are interested in sales, set their goals in sales: to develop a favorable offer, to visit a conference and to schedule 4 meetings with clients. Everyone is enthusiastic about his work and the company benefits.
To see who has “burnt”. It happens that an employee slows down; he has less objectives or vague wordings. We accept this understandingly: there occur ups and downs in life and that is normal. Generally, a man recovers and gets down to intensive work before long.
To keep focused. OKR helps concentrate on objectives and excludes chaos. When we worked without OKR we did not know what the headache was about and what the coworkers and executives were aiming at, coming to work. Now we see what is important for everybody, what objectives are aimed by a single executive and help, wherever possible, in achieving these goals.
A concentrated benefit of an executive
We used to discuss interesting ideas by years. Began to think, planned, gathered together, but no one made them a reality. After introduction of OKR we managed to do a lot from a long list that was earlier expressed in words only. Some of examples are:
- For years we dreamt at our meetings: “It would be great to find a seller who knows English as a native speaker”. And only after including this objective to OKR, we focused on it for several months and found that person!
- For years we discussed the idea of a European roadshow (schedule 4-5 meetings and go to a certain country). Immediately after including this objective to OKR we went on roadshow to Bulgaria, Czech Republic and Austria and signed two new contracts three months after.
- First years Neti founders did all the marketing themselves: advertising, souvenirs, PR etc. Doing so, we agreed that we need a separate marketer. After including this objective to OKR and focusing on it for half a year (dozens of interviews with candidates) we found a perfect marketer, freeing up our time for other important tasks.
- Thanks to OKR we managed to develop and launch the system of KPI (metrics).
- Thanks to OKR, we implemented SLA levels and made corresponding amendments to contracts over a short period of time.
- We achieved dozens more of important complicated goals.
OKR methodology helps an executive remember about the goals and focus on the essentials. To succeed in business one should not jump from one theme to another. You should concentrate on an important goal and get the result. Then – on a next one and so on and so forth. Using OKR planning, each executive and manager becomes consistent in achievement of his goals which leads to growth of the company efficiency as a whole.