Agile enterprises are progressively implementing a new approach for goal setting which is quite modestly called OKR (Objectives and Key Results). Unlike usual top-down methods of planning, OKR is a simple, fast-cadence, bottom-up process that engages with the team’s perspective and creativity.
So what is the big difference from traditional planning methods? In OKRs goals are set, tracked, and re-evaluated frequently – commonly quarterly. A distinctive OKR environment is bi-directional, and up to 60% of the goals are set bottom-up, rather than flowing down, thus creating a more engaging environment for the teams setting the goals.
Peter Drucker was the first person who thought of the concept of MBO (Management by Objectives), way back in 1954. In 1968, Andy Grove a co-founder Intel termed it as OKR and tweaked the MBO framework. In a huge testimonial of success, OKR is used by Google even today. Besides Google, other prominent OKR users, include Spotify, Twitter, LinkedIn, Airbnb, Walmart, Target, The Guardian, Dun and Bradstreet, and ING Bank. In other words, OKR is quietly taking over the corporate world driven by the trends of Agile, Lean Startup, Digital Transformation and Continuous Performance Management.
It’s common to think what worked for Google might not necessarily work for me too. Besides the sheer size of Google it’s even hard to emulate its cultural traits of transparency. Not every Company is ready for that level of openness and autonomy. I would suggest that OKR should not be seen as monolithic, one-size fits all, but as an approach with customizable building blocks that can be deployed by any company of any size. OKR can transform the way you set goals and manage them. In my opinion, OKR is a synchronization opportunity which every company regardless of its size should seize. OKR consists of two components – one is Objectives which is a quantified narrative of what you wish to achieve, and the other, Key Results, is the score board, of what we achieve.
The benefits of OKR are as below:
- Agility enables shorter goal cycles that in turn enable faster adjustments of goals and even allow faster adaptation to change and innovation.
- Alignment and shared cooperation improve collaboration among teams and eliminate competing initiatives.
- OKR simply speeds up the time for goal setting.
- Transparency and simplicity help in clear communication.
- OKR’s bottom-up approach raises employee engagement.
- Autonomy and accountability increase as teams receive clear directions and can choose how to achieve them.
- Reduced number of goals enhances focus and employee initiative in the company.
Finally, OKR will actually animate your workforce with the feeling of progress that they bring to your company. Momentum is the essence of business growth and moral alike. Your employees will also see the larger picture and themselves as participants in the company’s achievements. It will give everyone a place of pride in your company, as performers can be quickly appreciated.
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#OKR #accountability #employeeengagement #objectives
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