Beyond SMART Goals: Setting OKRs to Manage Goals that Challenge Performance

January 4, 2015

10:00 am

You might be among the ever-increasing masses who say, “I don’t make New Year’s Resolutions. I set goals.” And I bet you were long-ago trained to make your goals SMART: Specific, Measurable, Achievable, Results-focused, and Time-bound. But what if setting uncomfortable (instead of achievable) goals that clearly illustrate your purpose and priorities is a more productive method for tracking success? Google has used OKRs for over 15 years, as shared in this Startup Lab workshop: How Google Sets Goals conducted by Google Ventures partner Rick Klau. The video is over an hour long, but takes you through a step-by-step process of why Obectives and Key Results are a critical element of a successful company’s DNA, and can be used to manage your personal goals as well. I’ve got a quick summary for you below, followed by a few tools that can help you stay on track for your own OKRs.

Objectives and Key Results quantify, in addition to being able to qualify, what it is you are working on and how well you are doing toward your goals. Whether your company is as big as Google or you’re running a two-person startup team, making your OKRs visible to every member of your organization is a crucial way to create discipline and help everyone understand what you are working on, why you are working on it, and ultimately will help you make conscious decisions about what you’re not working on. When everyone understands, on a pretty basic level, what we’re trying to do and how to measure how close we are to our goals, there is a unity in mission. For instance, can Sales make a better pitch when they know the reasons you’ve created an enhancement to a product? Sharing an individual’s personal OKRs also provides an opportunity to identify which company OKRs they align with, or – even better – can create amazing new avenues of company growth.

Keys to Good OKRs:

  • They are both quarterly and annually set. Annual OKRs must be re-assessed and no one should feel beholden to see them out.
  • They are measurable. It must be patently obvious whether the key result was met.
  • OKRs are set on the individual, team, and company level.
  • Public to the entire company, and not set separate and private. This is true from the CEO on down.

Suggestions for Setting Proper OKRs Include:

  • Create a maximum of 5 objectives with 4 key results – be very clear about what the key results are from these objectives.
  • More than half of the company’s objectives should come from the individuals. When there is too much top-down dictation, it’s difficult to inspire team members to see this as the best use of their time and talent.
  • Management and individual must mutually agree on OKRs – again, no dictating.
  • This is not used as a weapon for performance evaluation. OKRs are tremendously helpful in evaluating, in just a few minutes, what you’ve worked on in an entire year. This allows you to structure a simple summary covering your impact to the company. So, sharing the OKRs is probably not as useful as simply being inspired by your OKRs.
  • Meeting 60-70% of the Key Results (remember that they are set at an uncomfortable number) is a good result, whereas meeting 40% is bad. If you are always meeting or exceeding your OKRs, you haven’t set them high enough. “You’re not crushing it; you’re sandbagging,” says Klau.

Grading OKRs is fundamental:

  • The objectives should feel uncomfortable and be ambitious. If you’re certain you will “nail it”, then you’re not pushing hard enough or thinking big enough.
  • The key results should clearly be quantified. “Better” is not a way to objectively grade a result.

Use Tools to Manage OKRs:

“At least as important as the tool you use is the communication you do about the commitment itself,” says Klau in the video. It needs to be clear, from senior management down, that OKRs matter, and that everyone has completed the task of sharing their OKRs. We recently shared 7 goal-setting apps that might help you achieve a higher level of productivity. And below, check out these suggestions from founders who employ OKRs both in their daily lives and in the management of their startup teams:

Commit:

Currently featured on Product Hunt, many entrepreneurs are using this to meet their personal goals, such as “write 1.000 words per day.” This type of goal represents an OKR, and the app itself keeps the reminders and the accountability front and center. It’s currently available on the App Store.

MindNode:

If you got a hold of the Passion Planner, you might have noticed that it incorporates the use of Mind Maps to help structure goals. MindNode is an app that makes mind mapping easy. Mind mapping is a way to visualize your goals, so the enhancements that allow images to be inserted into your mind maps helps to reward and inspire you to stay focused on these goals.

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Previously the Managing Editor at Tech.Co, Ann Diab has a background of launching and nurturing of startups and tech companies. Empowering and educating entrepreneurs and startups to better productivity and culture is her passion. Growth Manager at WorkingOn to enable folks all over the world to enjoy work and improve communication. Follow me on Twitter.

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