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OKR Craze: The Ultimate Practical Guide for HR

OK Rs beach

If we had a pen­ny for every time a HR per­son came to us and said Our CEO read Mea­sure what mat­ters’ by John Doerr and wants us to start using OKRs” we wouldn’t even need to be in the soft­ware busi­ness. Clear Review could retire to sit on the beach and sip on margaritas.

Doing a quick search on Google­Trends real­ly brings this OKR boom to life. Over the last five years, search fre­quen­cy for OKR’, has been climb­ing steadi­ly – worldwide.

So it’s no sur­prise that HR is being asked to imple­ment this new way of objec­tive set­ting by their senior lead­ers. This arti­cle will break down all the basics of OKR’s so you can con­fi­dent­ly assess and imple­ment a new way of objec­tive set­ting in your organization. 

Back­ground and under­stand­ing the basics:


What does OKR stand for?

OKR stands for Objec­tives and Key Results. Objec­tives are over­all goals and Key Results are the mea­sure­ments or mile­stones you need to achieve in order to hit the over­all objec­tive. It’s a way to break down a larg­er goal into its small­er components.

Exam­ple:

Objec­tive: Imple­ment OKRs into our organization 

Key Results:

1. Research and under­stand how OKRs work

2. Test OKRs in HR team for 1 month

3. Find tech­nol­o­gy that sup­ports OKR set­ting and tracking 

4. Train and roll out to the wider organization


Who invent­ed OKRs?

OKRs were invent­ed by Andy Grove, co-founder of Intel in the 1970s using the base mod­el of MBOs (man­age­ment by objec­tives, cre­at­ed by Peter Druck­er in 1954). It wasn’t how­ev­er until the book Mea­sure What Mat­ters’ by John Doerr, pub­lished in 2017, that OKRs real­ly became main­stream. Doerr him­self was taught the OKR method­ol­o­gy by Grove and was the per­son who intro­duced it to Google.


What is the point of OKRs?

As with any goal or objec­tive set­ting method­ol­o­gy, the point of OKRs is to be able to increase the chances of achiev­ing what mat­ters to your orga­ni­za­tion. OKRs are par­tic­u­lar­ly strong at focus­ing and align­ing peo­ple as well as intro­duc­ing — right at the set­ting stage— a clear way to mea­sure success. 


What is the OKR methodology?

At the most basic lev­el, OKR method­ol­o­gy breaks down large objec­tives into mea­sur­able mile­stones. How­ev­er, there are three things that make OKRs dif­fer­ent from nor­mal’ objec­tive setting. 

  1. They need to be set and reviewed reg­u­lar­ly, Doerr sug­gests month­ly or quar­ter­ly at least.
  2. OKRs should be most­ly divorced from com­pen­sa­tion with the focus being on dri­ving per­for­mance itself, rather than on the mea­sure­ment of per­for­mance to dri­ve reward.
  3. OKRs should be aligned and trans­late com­pa­ny goals into team and indi­vid­ual goals.


What is the dif­fer­ence between KPI and OKR?

KPI or Key Per­for­mance Indi­ca­tor is usu­al­ly a pure mea­sure that is used for fore­cast­ing. An exam­ple of a sales KPI might be Num­ber of Meet­ings Sched­uled’ which is an indi­ca­tor of future rev­enue. KPIs tend to not explic­it­ly attach them­selves to the over­all objec­tive Rev­enue goal’ and are used to mea­sure rather than to set out actions. 

OKRs start with your Rev­enue goal as the objec­tive and then set Key Results, which would be the actions or mile­stones that need to hap­pen to reach that goal. OKRs are KPIs with a wider context.

Set­ting and mea­sur­ing OKRs:


How do you write good objec­tives and key results?

A sim­ple struc­ture should help with writ­ing good objec­tives and key results. There are 4 key areas to con­sid­er when writ­ing objec­tives and key results.

  1. Objec­tive – This is the goal itself. It should be easy to under­stand and should feed into an over­all com­pa­ny or team objective.
  2. Key Results – Key results come in two forms. They are either deliv­er­ables or mile­stones. A deliv­er­able is some­thing that needs to be done/​delivered in order to reach the objec­tive and a mile­stone is an indi­ca­tor of progress.
  3. Dead­lines – OKRs have to be time-bound. Most orga­ni­za­tions that we know set and com­plete their OKRs on a quar­ter­ly basis, so your dead­lines for each Key Result and the over­all OKR need to reflect that. You can choose if you want one dead­line for the over­all OKR or if you would like to add in dead­lines for Key Results too.
  4. Col­lab­o­ra­tors – Is this goal some­thing you can achieve your­self? Writ­ing down the people/​departments that you need to involve to achieve the OKR is essen­tial at the plan­ning stage. This helps to cre­ate trans­paren­cy and buy-in ahead of start­ing on the objective.


How mea­sur­able should OKRs be?

If at the end of the month or quar­ter (when you review your OKRs) you aren’t sure if the OKR was achieved, your OKR was not spe­cif­ic enough. In the cre­ation stage ensure that you know how you will be able to mea­sure the suc­cess of both the objec­tive and the key results. There are cas­es where objec­tives might not be mea­sur­able so this means the key results have to be, either in mile­stone or deliv­er­able forms.

How many OKRs should you have?

OKRs are there to help organ­i­sa­tions focus their efforts in short 1 – 3 month sprints. John Doerr rec­om­mends to keep things sim­ple and to have 5 – 7 objec­tives with 3 – 5 key results. More could mean you’re either bit­ing off too much or are being too gran­u­lar, and less could mean that your objec­tives are not spe­cif­ic enough.


Team vs indi­vid­ual objectives?

If you are tru­ly rolling out OKRs on a com­pa­ny-wide lev­el, then there will be three lev­els of objec­tives to con­sid­er — orga­ni­za­tion wide, team-wide and indi­vid­ual. Some teams may not need indi­vid­ual OKRs as they are the col­lab­o­ra­tors on the key results. The need for indi­vid­ual OKRs is often dic­tat­ed by the type of work the per­son does.

HR spe­cif­ic process­es and OKRs:


How do I keep peo­ple account­able when it comes to their OKRs?

OKRs should be part of a wider con­tin­u­ous per­for­mance man­age­ment approach and rep­re­sent actu­al pri­or­i­ties. If you set your OKRs well, they will become a part of every­day work. OKRs shouldn’t be an end of quar­ter tick-box exer­cise, they should be dis­cussed reg­u­lar­ly in check-ins so you can iden­ti­fy block­ers and also re-eval­u­ate if they are still rel­e­vant. Using tech­nol­o­gy to track progress and gain vis­i­bil­i­ty will increase accountability.

Last­ly ensur­ing that senior lead­ers buy into the method­ol­o­gy, fol­low-up and respect the OKRs that are set will inevitably increase the take-up and account­abil­i­ty across the organization.


What is the best OKR software? 

Don’t get car­ried away with the pseu­do-sci­ence of OKR-spe­cif­ic soft­ware. The ben­e­fits of OKRs come from set­ting clear objec­tives and actu­al­ly being able to take action and mea­sure progress. 

We like Clear Review for the objec­tive set­ting func­tion­al­i­ty, but there are lots of tech­nolo­gies out there you can use — Word, Trel­lo or more spe­cialised tech. Remem­ber the best tech­nol­o­gy is a tech­nol­o­gy that peo­ple want to use. It needs to be sim­ple, some­thing that you can log into and just use and one that is flex­i­ble enough to meet what your teams need. 

Book a free demo of Clear Review


Should OKRs be tied to pay and reward?

Extrin­sic moti­va­tors i.e. pay, have his­tor­i­cal­ly tak­en prece­dence in work­places because they appear eas­i­er to con­trol and influ­ence. Dan­gle a car­rot of more pay and prospects if peo­ple per­form well and pro­duc­tiv­i­ty should increase. Right? Sad­ly not. Research (and bit­ter expe­ri­ence) has shown us that this rarely happens.

We need to look to intrin­sic moti­va­tors. Dan Pink’s 2010 best-sell­ing book Dri­ve” set out an approach to intrin­sic moti­va­tion based on three elements:

  • Auton­o­my – the desire to direct our own lives
  • Mas­tery – the urge to get bet­ter at some­thing that matters
  • Pur­pose – the yearn­ing to do what we do in ser­vice of some­thing larg­er than ourselves

Increas­ing these will be far more effec­tive than tying OKRs to Pay and Reward. Luck­i­ly OKRs them­selves already work quite well to those 3 ele­ments and you can use OKRs them­selves to cre­ate more auton­o­my, mas­tery and purpose.

eBook: Pay and Reward without Annual Appraisals


Should we cas­cade down or align up objectives?

When look­ing at OKR method­ol­o­gy you can eas­i­ly think that the answer is cas­cade down. In real­i­ty, OKRs are more of an align up’ sys­tem where the com­pa­ny is trans­par­ent about its objec­tives to teams. Teams, there­fore, cre­ate OKRs to con­tribute to the com­pa­ny objec­tives and indi­vid­u­als con­tribute to the team. Indi­vid­ual team/​com­pa­ny cir­cum­stances will have to be tak­en into con­sid­er­a­tion here, how­ev­er, it real­ly doesn’t mat­ter if it’s top-down, bot­tom-up or side­ways as long as it works for what you need.


Who OKRs are not suit­able for?

One thing that OKRs are not is a task list. OKRs are gen­er­al­ly more suit­ed to peo­ple whose work is more project or cam­paign-based. Think marketing/​cre­ative teams, prod­uct, engi­neer­ing. If your work is a nev­er-end­ing ham­ster wheel of tasks i.e. inputting data into a sys­tem OKRs might not be as appropriate.

You might set sales tar­gets for the quar­ter and break them down into mile­stones per month but that is hard­ly an action­able objec­tive. It is an out­come rather than an action. In sales, you could break this down to talk to x peo­ple’, book x demos’ etc. But the last thing that you want is to cre­ate arbi­trary OKRs for indi­vid­u­als just because.

In our expe­ri­ence, it is dif­fer­ent in many messier’ (than tech) sec­tors such as hos­pi­tal­i­ty, retail, pro­fes­sion­al ser­vices and the pub­lic sec­tor. OKRs adop­tion in these sec­tors has been more lim­it­ed. And, we find, where they have adopt­ed OKRs”, they have done so with a sleight of hand, using a more lib­er­al def­i­n­i­tion of OKRs for the depart­ments that do not lend them­selves to total objec­tiv­i­ty. We applaud this nuanced approach; per­for­mance man­age­ment is an art, not a sci­ence, and we think it is appro­pri­ate for a com­pa­ny to fit a method­ol­o­gy to their modus operan­di and com­pa­ny culture.

Want to see how OKRs work in Clear Review?

We incorporate OKRs into a wider performance management system that includes feedback, coaching conversations and engagement.

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