How OKRs work and how they differ from traditional goals setting methods.
OKRs, which stands for Objectives and Key Results, are a powerful management methodology aimed at achieving results in a practical and visual manner, optimizing the work of employees in a company. This approach is widely used by market giants such as Google and General Electric, with proven results.
💡 To make the most of the potential of OKRs, it is essential to follow two fundamental rules: Objectives should be qualitative and aspirational goals, while Key Results should be S.M.A.R.T. goals (Specific, Measurable, Attainable, Relevant, Time-Based) based on specific indicators that demonstrate the achievement of the objective.
To facilitate understanding, many experts use a simple statement: "I want to ________________, and we will know if we have achieved this goal through the following indicators: _________, __________, and _________."
OKRs are a powerful tool to boost the performance and growth of companies, enabling all team members to be aligned and engaged in achieving the desired results.
👉 The first blank space is filled with your objective, and the second to fourth blanks are filled with the key results.
Let's illustrate the definition with an example:
🟣 Objective: Increase the company's revenue.
Once the objective is established, it's time to define the Key Results, which are indicators that demonstrate whether the goal has been achieved. Key Results should be based, whenever possible, on KPIs (Key Performance Indicators) or key performance indicators. In the mentioned case, the obvious KPI to be used is revenue. Thus, the Key Result could be:
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Accumulated revenue in the quarter of $200 million.
Another option would be to use the revenue growth KPI.
🟣 In this case, the Key Result could be:
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Revenue growth, quarter/quarter, of 50%.
Both Key Results measure the company's growth, but they use different indicators (revenue and revenue growth) to measure it. The OKRs methodology allows for a flexible and adaptable approach, enabling goals to be aligned with the company's strategy and the most relevant metrics to measure progress.
How OKRs Revolutionize Results Management
OKRs are established in a bottom-up manner, starting from individual employees and reaching up to their managers, directors, and the CEO of the company. Moreover, they can also be horizontal, promoting alignment across different areas to achieve a common objective. This collaborative approach enables everyone to work together, engaged in achieving results that benefit the company as a whole.
One of the key characteristics of OKRs is transparency, as all employees have access to the OKRs of any team and member in the company. This transparency facilitates understanding of the goals, allows visualization of performance, and assists leaders in managing their teams effectively.
Another important aspect is that OKR cycles are short, usually ranging between 3 and 4 months. This periodicity allows for quick and effective adaptations based on external events, granting greater flexibility and agility in pursuing results.
It is essential to remember that OKRs are a methodology that values transparency, alignment, and the involvement of all employees in the company, creating an environment conducive to growth and shared success.
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