Similar to management by guidelines, the OKR methodology has aroused the interest of many companies seeking to develop management based on indicators and targets. In addition, this management tool has become an ideal way to promote a culture of high performance, measured by the results obtained.
However, a brief study of OKR often generates more questions than answers. With this in mind, we have prepared a complete article that offers tips on the concept, a step-by-step guide to how OKR works and much more. Have a good read!
What is OKR?
The acronym OKR stands for "Objectives and Key Results". But for you to understand it better, it's important to know that this agile methodology has two main elements:
1- Objective (O): represents what the company wants to achieve. Objectives must be meaningful, concrete, action-oriented and inspiring. When well designed and implemented, they become an antidote to muddled thinking and execution. In general, an organization sets between 3 and 5 objectives per period.
For example, an objective could be "Dominate the southeast region of Brazil".
2- Key Results (KR)Key Results: establish and monitor progress towards the goal. Key Results should be specific, time-bound, ambitious but realistic, as well as being measurable and verifiable. Generally, each selected objective has up to 5 Key Results (targets) associated with it.
For the fictitious objective of "Dominate the southeast region of Brazil", a company could define the following Key Results (KRs): KR1 - "Increase market share in the southeast region from X% to Y%", KR2 - "Increase turnover in the region by Z%", and KR3 - "Sponsor a major local event". Success in achieving these Key Results determines whether and to what extent the objective has been achieved.
Although it may seem like a common system of objectives and targets at first glance, OKR differs significantly from traditional methodologies.
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What is the origin of the OKR?
The OKR methodology was created in the 1970s by the president of Intel, Andrew Grove, and was presented to the public in his book "High Performance Management". He described how the management of goals and employees was carried out at Intel, offering an initial vision of OKR.
Intel developed OKR as a response to the rapid technological advances and transformations in the market at the time. It needed a management model that would allow companies to adapt quickly to these changes.
However, the OKR story only gained momentum around 1999, when John Doerr, a renowned venture capitalist, presented the model to Larry Page and Sergey Brin, founders of the then small company called Google.
Since it was founded in 1999, when it had only around 40 people, the company has expanded to over 60,000 employees today. Since then, the methodology has gained great recognition for its ability to support Google's growth. This success shows that both small companies and large corporations can adopt the method successfully.
How to implement OKR in 6 steps
Now that you've understood all the benefits of OKR and how it can boost your organization in an agile and effective way, you may be wondering how to start implementing it. But don't worrywe are here to help you with this, with the 6 fundamental steps for implementation.
1- Define clear and specific objectives:
- Set clear and specific targets for the main objectives and key results.
2- Combine top-down and bottom-up approaches:
- Include both leaders and managers as well as the team in defining objectives.
- Leaders can contribute 40% of the OKRs, while the rest is defined by the team.
3- Set short and reasonable deadlines:
- Avoid long-term goals, as this can hinder the process and reduce efficiency.
- Set reasonably short deadlines, such as quarters, to maintain a sense of urgency and allow enough time to get the job done.
4- Monitor the results constantly:
- Constantly monitor the results to ensure that the work is consistent.
- Evaluate the results regularly, preferably at weekly intervals, allowing for quick adjustments and informed decision-making.
5- Make the OKRs visible to everyone:
- Promote transparency by sharing objectives and results with all employees.
- The aim is to keep everyone informed and ensure that the process is understood by all.
6- Differentiate between efforts and results:
- Don't confuse effort and dedication with effective results.
- Focus on metrics and tangible results to assess progress, rather than relying solely on the feeling of togetherness and collective effort.
These steps are essential for the effective implementation of the OKR methodology and for ensuring the collaboration and engagement of the entire team
The 4 pillars of OKR
Understanding the philosophy and purpose behind OKRs is even more crucial than understanding their structure. Check out the four fundamental pillars of OKRs:
Ambition:
OKRs should be ambitious in the purest sense of the word. The central objective (OKR) shouldn't be impossible to achieve, but it shouldn't be easy either. It needs to inspire employees and provide a sense of purpose and significant meaning to the work done.
Measurable:
Your OKR can't be vague, such as "to be a cooler company", as this is detrimental to the measurement of an objective. It needs to be specific and have clear criteria for evaluating its success.
It's important to note that OKRs are data that help determine whether the objectives set have been achieved. It is therefore necessary to have a means of quantifying the success of OKRs.
The objective establishes where the company wants to go, while the key results define the path and progress towards achieving it.
Transparency:
It is extremely important that all team members have access to the OKRs of other areas and employees in the company. This not only stimulates productivity through "healthy competition", but also establishes a means for everyone to know what the priorities of their colleagues and the different areas are.
Unification:
The OKRs of the employees must align with the OKRs of the team, which in turn must align with the OKRs of the company as a whole. Unifying and integrating tasks and missions at all levels is one of the methodology's greatest challenges, but also one of its greatest benefits.
Improve the effectiveness of OKR with a multi-methodological platform
After following all these steps, do you still find it difficult to centralize all your company's results in one place due to the use of spreadsheets and the use of different management methodologies in each area? Then it's time to consider hiring specialized management software, such as Actio Strategy Management
The Actio Strategy Management é um software completo, da ActioThis is a tool that centralizes all the company's needs, both in terms of development and in terms of monitoring performance and results. It offers different methodologies, such as BSC, OKR, PDCA, ESG and others, so you can choose the one that best suits your organization's needs.
Confira abaixo como o OKR funciona na plataforma do Actio Strategy Management:
Remember: with Actio Strategy Management é possível impulsionar a performance de todas as equipes, buscando a excelência, o sucesso e a qualidade nos processos. Afinal, a plataforma permite elevar os resultados com base em dados e métodos que tornam a gestão mais estratégica.Além disso, agora com a integração com o ChatGPT nas nossas soluções, o Actio Strategy Management conta com um consultor virtual por meio de inteligência artificial para te orientar na identificação de causas, garantindo resultados e a coerência metodológica em seus processos.Não se esqueça de seguir a Actio no Instagram, Linkedin and Facebook.
