How to implement OKRs in your company: step by step

Introduction

OKR is today one of the most used methodologies in the leading companies in the world.

If you want to implement OKRs like Google, Intel, Dropbox, Twitter, Gates Foundation, AB Inbev, Disney, and other companies, we will take you step by step.


Chapter 1

Why implement OKRs in your company?

Created within Intel by Andy Grove and popularized after Google's results (led by John Doerr), the OKR (Objectives and Key Results) methodology is a management tool that helps the company to move towards a culture focused on results!

The purpose of this method is to help you create fundamental goals and know how to measure the results needed to achieve those goals.

But then why should you implement OKR?

The first point is the focus on results – in the book “Radical Focus” the author Christina Wodtke shows the power that a focused organization has over its effects. There is no point in your team performing many tasks every day, and these tasks are not generating results for the company, be it an increase in revenue, better conversion of leads into customers, cost reduction… it is said that a task done in half is worse than a task not done: because the job is not complete, it takes up employee time but does not generate value for the company and its customers.

The second reason for you implement OKR is the alignment that the methodology generates in the company. OKR aligned with the mission and values ​​of the company, sectors and teams. In other words, the teams’ OKRs will be connected to the company’s global OKRs, making all of their employees focus on delivering a result that will impact the company’s strategy.

The third is motivation. Having clear and challenging goals makes the team dedicate themselves more to achieving them. Human motivation is divided into autonomy, dominance and purpose – that’s what Daniel Pink’s “Drive” is about in your book. Your employees will have the autonomy to develop their OKRs, they will have mastery of the entire process and will know why they are working on it, that is, the purpose of the company! The last differential of the methodology is transparency. All employees will understand the objectives of that period throughout the company’s hierarchy.

But what are these OKRs? To explain more academically, we can summarize OKRs in a sentence by John Doerr, author of the best-selling book on OKRs, “Evaluate What Matters: How Google, Bono Vox and the Gates Foundation rocked the world with OKRs”:

I will _____, which can be measured by _____.

This sentence demonstrates the structure of an OKR, composed of an Objective (I will), accompanied by Key Results (… which can be measured by). Companies’ OKRs are created like this.

Did you like the methodology? Do you want to execute it in your company? We will now teach you to step by step on how to implement OKRs in your company!

Chapter 2

Step by step on how to implement OKRs in your company

First of all, DO NOT implement OKRs across the company at once! Test on your team initially, and then the number of units that use the methodology will grow (give preference to groups that relate a lot to yours).

In a short time, you will have your entire company aligned and using OKRs. If you are starting the company now, start using OKRs, do not expect the company to grow too much to start the culture focused on results!

 

1. Determine the OKR Cycle

To apply the knowledge obtained, we must have shorter feedback cycles than traditional methods (which generally do strategic cycles between 3 to 5 years). Periods between 3 and 12 months are used (more mature companies tend to have cycles closer to the upper limit, while younger companies tend to have shorter periods). During these cycles, your team and your company must analyze everything that happened: what was okay? What was not right? What were the best practices that can be disseminated to other teams? Which ones should not be propagated? How to improve for the next cycle? We have some events used to consolidate learning and to make sure that we are going on the path to achieving our primary goals. The events typically used in an OKR cycle are:


2. Goals Planning

The Objectives Planning meeting results in the alignment of objectives between the leaders of the executive team and the operational teams. It is essential that everyone involved in how the methodology works, what it is because the company is adopting it. Remember: one of OKR’s secrets is transparency!

For this, we must think in an aspirational way: “What do we want to achieve in these coming months?” and write down the main objectives that emerge and that are, at the same time, aspirational and relevant. Some examples:

Objective 1: Dominate Latin America;

Objective 2: Create an incredible customer experience;

Objective 3: Create an incredible product;

Objective 4: Create an incredible company.

We indicate that you and your team do not create many goals … two or three goals is excellent. These objectives that you are setting should not be fixed without generating reflection. Goals represent why we are doing that if you don’t have an apparent reason why think a little more and then create your goals. If you chose goals in 5 minutes, believe me: they are not reasonable goals! Think a bit more.

For this meeting, before determining which objectives will be chosen, ask each person to think and write down what goals they believe the company should follow. This step is essential for everyone to think well about the company’s objectives, as they must be ambitious, aspirational, express intentions, aggressive, realistic.


3. Definition of KRs

After we have the objectives well defined, it is time to think: “How will I measure our progress about our objectives and how will I know when we have achieved or not achieved those objectives?“, Write down the KRs that arise and define which KRs will be for each goal.

For each objective, you must determine 2 to 5 Key Results, which should be results that, if achieved, the company’s aim will be made! Let’s take the examples:

Key Results: Reach all Latin American countries by 2020 (Objective 1);

Key Results: Improve NPS from X to Y (Objective 2);

Key Results: Achieve an NPS of X test users (Objective 3);

Key Results: Define 100% of the culture code (Objective 4).

Note that all the Key Results used in the examples (each KR shown is related to an objective used as an example) have the following characteristics, which we call SMART Objectives guidelines:

    • Specific: because it is direct when showing what you want (increase sales);
    • Measurable: increase by 15%;
    • Achievable: it is possible to increase sales by 15% in this period;
    • Relevant: KR makes sense for the commercial team, for example;
    • Temporal: the period until the first quarter of 2020 is well defined

We say that these KRs are SMART (Specific, Measurable, Achievable, Relevant, Temporal). At this meeting it is essential to remember to always create SMART KRs!

Remember John Doerr’s quote?

“I will _____, which can be measured by _____.”.

“I will dominate Latin America, which can be measured by reaching all Latin American countries by 2020”.

Companies generally implement OKRs at two hierarchical levels: strategic and tactical. The strategic ones are the companies’ global OKR. They are the ones that will direct where the company is going (as stated in the item “Determine the OKR Cycle” are usually one-year cycles). The tactics are defined by teams, by areas with the function of knowing how each side can contribute with the company to reach its objectives (3 months is usually used for these cycles). Example:

    • STRATEGIC: Dominating Latin America by the end of 2020
      • Measured by:
        • Have 51% of the Market Share in Latin America by 2020;
        • Reach all Latin American countries by 2020;
        • Have a maximum concentration of customers in a single country of 15%.
    • TACTICAL: Attracting prospects from across Latin America
      • Measured by:
        • Have a total of 700,000 visitors to the site during the first quarter of 2020;
        • Generate 5 more link building partnerships during the first quarter of 2020;
        • Have a maximum concentration of visitors in a single country of 15% during the first quarter of 2020.

In this example, the company chose that it wants to dominate the whole continent, and the way to do that would be to reach 51% of the market share on the continent, be in all countries and have a maximum concentration of customers at 15% per country. Note that if only one of the KRs is reached, the objective will not be achieved. The company can be in all states, but with a little number of customers in each, while its competitor dominates the significant countries, having 60% of the market share, for example.

It is determining which KRs will also need reflection and analysis of the market and internal capacity! KRs must focus on the customer, must take the team out of the comfort zone with bold results and must generate value for everyone.


4. Presentation of OKRs

We have defined the objectives of a company or an industry. It’s time present OKRs to the company, leading to alignment and transparency between the company and between its sectors.

The objectives must be clear, and the way that each KR will be measured is also well explained. The purpose is removing all doubts that each employee may have about each Objective and each KR.

After this meeting, work is carried out to achieve the KRs that will lead to the desired goals. Hands-on!

As you are starting to implement OKRs in your company, and you started with your team, make sure that everyone involved in the tasks is aware and clearly understand what the Objectives and their KRs are.


5. OKRs check-up

We recommend holding this event monthly, in the case of tactical OKRs (at the sector level) or quarterly in the case of strategic OKRs (at the company level).

The objective is collecting data on the progress of KR to know which ones are the right path and which are falling.

During this meeting, action plans are created for KRs that are below expectations for that date, plans that will lead us to repair the company’s gears so that we have the maximum KRs reaching the goals.


6. Closing OKRs

During this meeting, the final data for each KR at the end of the cycle is collected. With these results in hand, we were able to assess the reasons that led some KRs to succeed and others not to reach the defined goals.

In the case of completed KRs, we want to know what were the actions that led to this result, so that we can replicate them in the next cycles. For unfinished KRs, we want to find out the reasons that led to the non-completion, to put together an action plan for the subsequent periods so that more and more the desired results are achieved in time.


7. Results report

With the cycle completed and to generate transparency for the entire company, we must hold a meeting to demonstrate the results achieved in this cycle, as well as the action plans so that in the next periods, we can have performance improvements.

At this meeting, leaders should answer any employee’s questions, so that the results and action plans are clear to all, to generate continuous improvement and a culture of transparency within the company.

Now that you know how to implement OKR in your company, time to gather the team, show the benefits of the methodology, show how and why you believe that everyone will generate value for the company and hands-on!


8. Assembly of Action Plans

At the end of each OKR cycle, with the lessons learned about what went right and what went wrong, we must put together an action plan so that we can fix what has hindered the team from reaching the defined goals and so that we can continue to do which led the team to the most satisfactory results.

We recommend that you create improvement tasks with the highest possible priority in your Backlog if you are also using the Scrum methodology. When prioritizing these tasks, the first thing the team will do in the next cycle will be to improve it, accelerating growth and increasing the strength of continuous improvement cycles.

Now that you know how to implement OKR in your company, it’s time to bring the team together, show the benefits of the methodology, show how and why you believe that everyone will generate value for the company and hands on!