Is your SaaS running on OKRs yet? If not, it’s about time to start looking into what the leading SaaS goal-setting framework can offer your organization.
Many times OKRs are implemented with a diffuse target of increased productivity and results, topics often on management’s mind. As an OKR consultant, I usually get engaged at this stage and I can happily say that OKRs can help with both of these!
What is more seldom known however is that OKRs can work as a very targeted tool to achieve very specific organizational challenges as well, and that the choice of a challenge to approach can have a large impact on how OKRs should be implemented. Most of my engagements end up focusing on a more specific set of goals to ensure the maximum impact of establishing a goal-setting framework in the organization.
Here I will take you through four core challenges OKRs can help you address – and what to think about as you implement OKRs with a specific challenge in mind.
- OKR is a goal-setting framework that while helping organizations achieve increased productivity and results can address specific challenges as well
- With a clear choice of challenges to address, your OKR implementation will have a much higher chance of success
- The four core challenges addressed in this article are:
- Strategic alignment – requires a focus on strategic OKRs as well as communication and collaboration
- Employee engagement – requires a focus on the process of OKR creation
- Shifting from task to impact focus – requires strict rules in OKR creation as well as space for discussions
- Focus – requires strict rules and tough discussions
- While OKRs can help organizations achieve an overall higher level of performance, having a clear goal in mind while implementing the framework can lead to a more targeted as well as measurable impact
Getting to strategic alignment
Strategic alignment and strategy implementation are two extremely challenging topics, and unfortunately, they often get too little attention – many times due to the challenges in measuring their success.
OKRs help with both implementation and alignment through their nature as a conveyor of clear and concise goals that get aligned in the organization through the process of creating and following up on them.
It all starts with getting the overall strategy for a set time period down into two to four clear strategic OKRs. These should be clear reflections of the set strategy and convey the core topics covered in the usual strategy PowerPoint.
Armed with a strong set of strategic OKRs, getting to alignment is all about establishing a good process for getting the strategic OKRs out into the organization. The creation of OKRs in individual teams can take many shapes, what is absolutely necessary here is that it starts with a review of the strategic OKRs together with a discussion on the particular team’s role in the overall organization. All strategic key results need to be considered by each team, looking for a fit between the team’s purpose and metric in the key result – is there something we can do to achieve a movement here?
In this way, OKR implementations with a strong focus on getting the strategic OKRs right together with a clear structure for the teams to follow in creating their OKRs will achieve a higher level of strategic alignment.
Building employee engagement with OKRs
Employee engagement is a science in itself and OKRs will not solve all parts of the puzzle in getting it right. What it however can help with is to create a sense of empowerment in letting employees take an active part in formulating their own goals. The shift from checking off boxes in someone else’s checklist to active work towards personally committed goals can be a major driver of engagement.
What do you need to focus on in your OKR implementation to achieve engagement then? It all comes down to the creation of team OKRs. The more you let the team members take control of this process, the stronger engagement can be achieved. Just splitting out parts of your strategic OKRs to each team will not cut it here. The team needs to be empowered to look at the strategic OKRs and have a strong say in their own objectives as well as key results. The same goes for the level of ambition in each key result – you should use stretch goals but be reminded that there is a cliff where team members will perceive goals as impossible. When this point is reached, goals turn from engaging to demotivating.
With each team having a clear purpose and expectations, you will be surprised at how well teams set their own objectives and align them to the strategic ones.
From task to impact focus
Everyday work execution comes down to checking off a long list of tasks. Work is simply activities done – that in the best case have good outcomes and eventually impact. This reality has the unfortunate side effect that it becomes natural to talk about activities as impact and judge team and individual performance on activities completed, while in reality, it’s usually the impact of the activities the organization is after.
This story repeats itself in the crafting of OKRs. Lacking good outcomes or impact metrics, teams start to put activities as key results to track and achieve a certain level of activity. In some specific cases where outcomes can be directly connected to the volume of activity, these key results can be quite productive. In most cases, however, creating activity goals has the major risk of the team focusing on completing tasks instead of achieving results.
OKRs can help with this if you adhere to a strict policy in the formulation of key results. Simply put down the foot and say that a key result needs to measure an outcome or result of an activity and not the activity itself. Exceptions will need to be granted, the goal here is to have the teams take one extra round of discussion on each key result to see if there is an outcome behind the suggested activity that could be measured instead. Getting from activities to outcomes often leads to teams finding new and more efficient paths to their goals.
Limiting focus achieves results
Focus is a general organizational challenge that can take many forms. Sometimes it comes down to wanting to follow too many opportunities or simply being opportunistic and not adhering to the set strategy. At other times, it’s all about trying to do too much at the same time.
Both of these challenges lead to worse execution compared to the power of clearly choosing a path (ignoring some opportunities) or of following opportunities in sequence instead of all at the same time (having the patience to let some opportunities wait).
OKR is by design a limiting framework that requires focus to work well. Implementations with a target to make the organization more focused should strive for stricter rules in how many objectives can be set at each level and how many key results each of these should have. Two to three strategic objectives with two to three key results each is a good rule of thumb here and the same applies to team-level OKRs. Have in mind however that it is not only the number of key results that drive focus, the more specific the key results the more focus you will achieve (compare the focus gained from a key result such as ‘total revenue’ compared to ‘revenue from newly launched product X in market Y’).
Implementing a goal-setting framework without a goal in mind
There are more challenges that are addressed by different aspects of the OKR framework, but I believe these four have the most potential for impact in an organization.
No matter if you are just starting out with your implementation or if you have run with OKRs for several years, there is always value in pausing for a moment and making sure that your implementation has a clear goal and is continuously pushing towards it.
How crazy it even may sound, many OKR implementations themself lack a clear measurable goal. Starting off with a challenge you would like to solve is a great way to get your program off to a strong, and measurable, start!