How to implement OKR
It is impossible to see companies like Google, Intel, Twitter and Dropbox as failed institutions. Among the many policies adopted by each of them individually, is there a characteristic common to all in the form how you plan your goals and your strategy? The OKR methodology (objectives and key results). We understand more and learn how to put it into practice in today’s article …
What is OKR?
The OKR meaning (Objectives and Key Results). Although adopted in large, successful companies, the methodology is still little known. The OKRs are goals or objectives that you want to achieve, followed by metrics that indicate whether the results have been achieved or not.
How to implement OKR?
It is advisable to implement the objectives in short and in phases, until everyone feels comfortable with the methodology. Setting the quarterly OKRs is a good way to encourage the team, give feedback over time, so that everyone can suggest improvements, and earn points for the effort.
The idea of implementing any new methodology is to make changes in phases, starting with the senior team and gradually spreading in the learning cycles. Following all suggestions it is very difficult that even the team is not taken away to achieve the established goals.
In this sense, it might make sense at first not to implement individual OKRs, so that the whole team remains focused on 100% of the company OKRs and teams as a whole. Having said that, let’s see one step at a time and the timing that can help you implement key goals and results in your business …
Step by Step
1 – Determine what the organization’s main objective is for the year
2 – Divide, for the next quarter, what are the most important goals (up to 3)
3 – Create 3 out of 5 (maximum) results for a quarter goal
4 – Measure the key weekly results
5 – Follow the company’s key monthly results
6 – At the end of the quarter (before the next one starts), repeat steps 2 and 3
Example of OKR
To make tangible a better way for you is an example of the key objectives and results of a fictitious software company as a service (SaaS). Just to contextualize, let’s imagine that they invoice R $ 100,000 of recurring monthly income, has a dropout rate (unsubscribe rate customers) of 2% and the average ticket is $ 2,000, ranging from R $ 1,000 R $ 3,000.
In this case, we could have the following OKR:
Purpose – Increase recurring revenue
- Main Result 1 – Increase monthly recurring revenue by 30%
- Main Result 2 – Reduce the dropout rate to 1%
- Main Result 3 – Increase the average ticket to $ 2,500
As you can see, all the results are measurable, rather demanding and will be pursued in the next quarter. This leads us to understand a little more about the main characteristics of the objectives and key results …
- Short cycles – The objectives must be annual and quarterly
- Transparency – Must be publicly available for any company
- Measurement – So you can track and see if you are approaching or not
- Ambitious goals – Goals should leave the team uncomfortable (in a good way)
- Focusing – Few goals with few goals, OKRs should determine the relevance of what should be done