People Analytics Tools

OKRsfor Company Success

Setting up Goals for Company Success

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OKRs AND GOAL SETTING: THE KEY TO COMPANY GROWTH AND SUCCESS

GOAL SETTING FRAMEWORKS: MBOs TO OKRs

When combined, efficiency and growth separate successful companies

from the rest.

However, “efficient growth” is one of the largest challenges com-panies face, as growth often comes at the expense of efficiency. With more employees involved in the organi-zation, additional strain is placed on managers to hold employees accountable and ensure that the work of each

individual is aligned with the overall busi-ness strategy. To pro-mote an engaged work-force, it is imperative that employees not lose sight of their con-tributions’ affect on the organization despite times of change and growth.

Management by Objec-tives (MBOs), a popular 1950s goal setting model created by well-known author and business thought

leader, Peter Drucker, focuses on the objec-tives of the company but lacks in helping to create a path to reach them. In the early

1980s, SMART goals built upon MBOs by placing emphasis on the measurement and attainability of goals. SMART goals stand for:

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Specific – target a specific area for improvement.

Measurable – quantify or at least suggest an indicator of progress.

Assignable – specify who will do it.

Realistic – what results can realistically be achieved, given available resources.

Time-related – specify when the result(s) can be achieved.

As managers continued to learn and appreciate the value of goal setting, the late Andy Groves (CEO of Intel) expanded upon the principles intro-duced by MBOs and SMART goals with the idea that goals should not only revolve around attainment, but towards stretching employees to achieve something they didn’t know was possible. Groves proposed two simple concepts:

The aspirational quality these two questions inspired provided the foun-dation for the OKR methodology of business management, which was made popular by its adoption at Google in the early 2000s.

1) Where do I want to go? 2) How will I know I’m

getting there?

WHY OKRS?

Having an open and connected goal process makes a company better

aligned and coordinated, focused on the right things and tuned in to all of

its employees.

Many large and successful companies have engaged their employees by

using a goal setting framework called Objectives and Key Results (OKRs).

MANAGING GOALS WITHIN THE ORGANIZATION

1. TRANSPARENCYHistorically, goal setting would occur with managers setting MBOs for their teams and communicating to their teams what they needed to accom-plish. These goals would then be filed away until the next performance review. This system of management by goal setting is highly flawed and prevents organizations from obtain-ing the benefits effective goal setting provides. In order for goals to appro-priately motivate employees, employ-ees should be frequently reminded of

what they are striving for and be able to evaluate the work they have com-pleted in reference to the goals. Pro-viding employees with constant access to and reminders of their goals results in a focused-driven workforce.

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When managing goals within the organization, it is imperative that goals

are transparent, frequent and aspirational.

OKRs consist of 3-5 high-level objec-tives, under which 3-5 key measurable results are listed. While the key results still have to be achievable, the aspira-tional quality of the objectives mark the main difference between OKRs and other goal setting frameworks, such as management by objectives (MBOs) or SMART goals. Providing an element of ambition within the goal setting framework empowers em-ployees to strive for more and push

themselves and the company in pur-suit of the goal. OKRs are designed to drive tactical activities while simulta-neously encouraging aspirational initiatives. The OKRs framework also benefits productivity, focus and com-pany culture by facilitating discus-sions between employers and em-ployees on how the work of the indi-vidual supports the business’ strate-gy.

Goals within an organization should also be transparent in that employees should be able to see what others are working on.

Granting visibility into other team members’ goals builds trust, fosters collaboration and promotes team success. Transparent goals support employee engagement and retention, making it easier for employees to understand how their work contrib-utes to the overall goals of their team, department and company. Goal transparency facilitates alignment between the employee and company objectives.

2. FREQUENCYFrequent Goal Review is the key to creating an organization that is adapt-able to market changes and quick to capitalize upon new opportunities. Reviewing past goals and setting new goals on a monthly or quarterly basis enables companies to calibrate and realign around present opportunities.

A frequent routine centered around goal setting and review also works to motivate employees by ensuring con-stant alignment with changing com-pany objectives.

3. ASPIRATIONAL OKRs differ from other goal setting frameworks in that key results must still be achievable but objectives can be aspirational. This aspirational com-ponent is the driving force behind a company’s success with the OKR framework and therefore, is a crucial aspect to effectively manage by goal setting.

Employees are motivated most by the potential to make progress towards meaningful work and the ability to share said work with the broader group. Establishing a transparent, aspirational goal setting model results in harder-working employees who are more engaged and aligned with the company’s objectives.

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PEOPLE AND ORGANIZATIONObjective - Hire, develop, engage and retain talent. Improve communication, transparency, alignment and metrics focus within the organization.

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TOP COMPANY OKRS AND GOALS BY DEPARTMENT

OKRs play an important role in strategic planning, as they require top

management to identify and break down the strategy by objectives.

Understanding how each of the 5 main business departments contribute to the strategy provides organizational clarity and allows appropriate objectives to be set. Below are some examples on how to set a variety of Objectives and Key Results for each departmental strategy:

FINANCIAL AND SALES:

Objective - Achieve goal for financial commitments of revenue, book, expense, cash and head-count each quarter.

Key Results

Achieve 40% more revenue every quarter

Develop 2x pipeline of previous year

Develop sales capacity at least 150% of plan

Stay within approved budget for expenses and cash

Finalize fundraising process

Increase revenue per employee

Key Results

Define and implement standard talent management

and review process

Implement a world class onboarding system and follow

up for all new hires

Complete company-wide compensation analysis and

define plan to remediate issues

Fill key gaps in cross functional leadership areas

PRODUCT AND DEVELOPMENT

CUSTOMERS

AND STRATEGY

Objective - Continuous improvement on delivering products with velocity and quality on time.

Key Results

Achieve a consistent product release cadence

Develop a product road-map for next 12-18 months

Release next produce module with 5% known defects

Reduce product backlog by 20%

Objective - Continuously improve our customer experience and increase refer-ence-ability in our customer base.

Key Results75% of our top 50 strategic customers referenceable by

EOY

Implement and develop a customer renewals process

Improve NPS score by 20%

Improve customer success metrics by 25%

Improve customer support ticket closures by 10%

Objective - Increase market awareness, market share and leverage globally.

Key ResultsDevelop a comprehensive go to market plan

Enroll 100 new customers

Structure 5 strategic revenue generating partnerships

Execute a global user conference

Work with industry analysts and PR to increase market

awareness

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Organizations that make it easy for employees to set clear goals and have ongoing management of those goals are four times

more likely to score in the top 25% of business outcomes.

WHY HELLOTEAM?According to research conducted by Deloitte,

745 Atlantic AveBoston, MA 02111

E: team@helloteam.comP: (857)-263-3936

The HelloTeam platform facilitates the expansion of the OKR methodolo-gy, promoting a culture of transparen-cy and collaboration, as well as the support that large and/or high growth companies need to communicate effectively, work efficiently and hold employees accountable. Structured

around five components of engage-ment and talent management, Hel-loTeam is designed to empower and intrinsically motivate a workforce, giving employees the ability to fre-quently set, edit and track goal com-pletion while staying informed of goal progress across the organization.