Successfully Setting and Tracking Goals
How do the goals of individual employees relate to team goals or company goals? When aligning goals at different strategic levels the OKR method provides guidance. It’s a management method used by leading companies such as Google, Twitter and LinkedIn. It combines the goals of the company with those of each individual employee. This creates a common orientation for all people in the company while at the same time creating transparency and focus on the most relevant priorities.
The OKR Model - Leading with Objectives and Key Results (OKRs)
OKRs can be broken down into qualitative objectives and measurable key results that influence an objectives achievement. Objectives should be ambitious, motivating and not completely achievable. In contrast, key results describe a specific, measurable success factor on the way to achieving the objective.
OKRs help to create alignment and a common vision that clarifies the most important priorities, creates transparency, and enables better communication on goals and outcomes. Goals at different strategic levels are coordinated and linked with each other. This allows every employee to understand how their daily work aligns with the company's overall strategy and what important contributions they make in their team.
Read our interview with the experienced OKR coach Roger Longden on the Leapsome blog if you are curious how OKRs can be successfully implemented.
In principle, a combination of top-down and bottom-up is recommended. First, the management determines the quarterly corporate OKRs. Each team then considers how these OKRs can be broken down into team OKRs and defines their own OKRs in consultation with the management. Finally, individual OKRs are also defined in a top-down and bottom-up process. Thus, individual OKRs contribute to the achievement of team OKRs; In turn, Team OKRs help to achieve corporate OKRs.
Applying the OKR model in a consistent and conscientious way helps to translate the company's vision, mission and strategy into short-term, operational planning and ensures compatibility between strategy and daily business.
An objective answers the question: “What do I want to achieve?”. It’s defined as a qualitative state you want to reach. It’s recommended to define a maximum of 5 objectives per quarter and level (individual, team, or company).
When formulating objectives, make sure that they:
- contribute to achieving company goals and that they are aligned with the company’s overall strategy,
- are vital for success,
- are motivating, ambitious and
- time related (= achievable in one quarter).
Key Results answer the question: "What outcomes do I have to achieve on the way to reaching the objective, and how can I measure the results?". As the name implies, they are the quantitative key results on the way to achieving the objective. In essence, they have to be measurable - it’s not a key result if it doesn’t have a number. Per objective, a maximum amount of 4 key results should be defined.
When formulating key results, make sure that they:
- are SMART (i.e., specific, measurable, achievable, relevant, timely);
- don’t describe tasks or processes but instead describe an outcome.
Objective: Increase customer satisfaction
Key Results: Hire 3 additional Customer Success Managers
Increase NPS from 83% to 90%
Decrease response time to 3 hours