OKRs: What are they? and… Why now?-EN

OKRs stand for Objectives and Key Results, in this article, we will describe in detail what OKRs are, their benefits, characteristics, uses, useful examples and more than one cause that will help you define OKRs for your company, team or personal life successfully.

Sneakerheads and organizations have something in common lately, they both have a hot and trending topic, Jordans on the one hand, and OKRs on the other.

While OKRs have technically been around since before there was a microwave oven, they’ve only gained trendy status in the last few decades. But why now? and why should organizations implement them?

Fundamentally, the reason is because OKRs enable an organization to connect. When I talk about connecting, I mean translating your strategy into measurable results, being transparent in communicating it, allowing a common focus on what needs to be achieved and generating learning that enables improvement.

In an increasingly competitive and dynamic business environment, organizations are looking for methods and tools that allow them to adapt rapidly to change and focus on achieving meaningful results on what matters most. OKRs offer an agile, results-oriented framework that facilitates the establishment of clear and measurable goals in short cycles.

Therefore, its 5 main benefits are:

AUTONOMY: The team defines its contribution to higher-level objectives based on its scope and actionability.

They promote TRANSPARENCY because they are shared throughout the organization, giving visibility.

They ensure FOCUS in the organization, because they help teams focus on what really matters.

OKRs are not exclusively a tool for measuring results, but the focus is on LEARNING. Initiatives are considered bets based on the hypothesis that by performing “X” actions we will achieve “Y” impact, expressed in moving a KR that brings us closer to the Objective.

OVERCOMING: The objectives set are ambitious and challenging.

But in the end, what are OKRs?

In Summary.

It is a management system that contributes to the alignment and connection of the business strategy with the operation. All this, in short work cycles that allow the company to focus on what is really important.

The Objectives are the Qualitative part of the OKR, they usually have a horizon of 1 year or more and, generally, they can bring with them characteristics of the Mission and Vision of the company or its strategic guidelines. Their main characteristics, and an important point when defining them, is that they should be:

• Aspirational: This means that Objectives should be designed (with some exceptions) to aim for the unimaginable, without the intention of literally achieving it; they are designed to truly motivate people and teams.

• Clear: Being clear about a team’s goal keeps everyone on track and motivated. At the end of the day, if a team doesn’t know what needs to be done or how to get to a goal, they can become demotivated, stressed, discouraged and dissatisfied.

• Concrete: Objectives should enable effective communication to the team and the organization. In turn, this contributes to the possibility of being prioritized, through the understanding of what is being sought. And finally, also connected with the above, it leads us to be able to define KRs that are associated with the Objectives and, in turn, help us to make a proper assessment of progress and monitoring of results.

Therefore, it is said that the Objectives should be MEMORIZABLE by whoever or whoever defines and uses them.

Some examples may include:

Objective: To become the market leader in our sector.

This objective is aspirational, as it seeks to achieve a leadership position in the market. It is also clear and concrete, as it clearly establishes a strategic pillar, which is to become number one in the sector.

Objective: Improve the customer experience and make it our main differentiator.

This objective is aspirational, as it seeks to improve the customer experience and make it stand out as the company’s main differentiator. It is also clear and concrete, as it focuses on a specific and measurable aspect of the organization that allows it to stand out from others, such as increasing efficiency or reducing costs.

Objective: To foster innovation and creativity at all levels of the organization.

This objective is aspirational, as it seeks to promote innovation and creativity at all levels of the organization. It is also clear and concrete, as it clearly establishes the focus on fostering these values in the company’s culture and generating a mindset that involves people in creative and innovative processes at all levels.

Objective: Expand our international presence and establish operations in new markets.

This objective is aspirational, as it seeks to expand the organization’s international presence and open up to new markets. It is also clear and concrete, as it establishes the objective of establishing operations in markets in which it does not currently operate, for example, other regions or other countries.

Therefore, on the one hand, the objectives in the OKRs must be ambitious, but achievable. By providing clear direction and motivating teams to work toward a common purpose, organizations can align their efforts and work together to achieve results. By setting clear, concrete and aspirational objectives, organizations can align their efforts and work together to achieve meaningful results.

On the other hand, the Key Results, which are the Quantitative part of the OKR, are usually valid (or re-defined) every 3 months and are directly related to one of the objectives. The characteristics of the KRs respond to SMART, i.e.:

Specific: what do you want to achieve in your area of focus?

Measurable: what indicators can be used to measure its efficiency?

Attainable: is the goal reasonable?

Relevant: why is it of interest to your company or customers?

Timely: when does this goal have to be achieved?

In order to be consistent with the above, I will mention some examples that, linked to the above objectives, may include:

Objective: Become the market leader in our sector.

Key Result: Increase sales revenue by 15% in the next quarter.

Specific: Improve customer satisfaction through survey ratings.

Measurable: Use the average satisfaction survey rating.

Attainable: Set a reasonable and achievable rating goal of at least 4.5.

Relevant: Customer satisfaction is crucial to success and customer retention.

Timely: Achieve this rating in the next satisfaction survey.

Objective: Improve customer experience and make it our key differentiator.

Key Result: Improve customer satisfaction with an average rating of at least 4.5 in the next satisfaction survey.

Specific: Increase sales revenue.

Measurable: Use the sales revenue generated indicator.

Attainable: Set a reasonable and achievable growth target of 15%.

Relevant: Increasing sales revenue is critical to the company’s success and to position itself as a market leader in the industry.

Timely: Achieve this key result in the next quarter.

Objective: Encourage innovation and creativity at all levels of the organization.

Key Result: Increase by 15% the number of improvement suggestions and ideas submitted by employees in the idea management system each quarter.

Specific: Increase the number of suggestions for improvement submitted.

Measurable: Measure the number of suggestions before and after the quarter and calculate the 15% increase.

Attainable: Increasing the number of suggestions is an achievable goal.

Relevant: Increased number of suggestions indicates greater commitment to creativity and innovation.

Timely: Every quarter.

Objective: Expand our international presence and establish operations in new markets.

Key Result: Initiate two pilot operations in a selected new market in the next four months.

Specific: Initiate two pilot operations in a new market.

Measurable: Have two pilot operations underway in the selected market.

Attainable: Initiating two pilot operations in four months should be an achievable goal for the organization.

Relevant: Pilot operations allow to assess the viability of the market.

Timely: Within the next four months.

The above mentioned is just the tip of the iceberg. In the near future we will continue to deepen our knowledge on this exciting topic that so many organizations are successfully using to define, communicate and achieve their goals.

To go even deeper, we invite you to stay tuned to these upcoming publications and to take a look at our Knowledge Center, where you can find the interview Defining OKRs with Rodigo Ryan, and the article Alignment and focus of Objectives with OKRs by Alonso Álvarez.