With pinpoint, accurate global positioning systems, it’s hard to imagine that there was once a time when you needed a road map to go anywhere long distance. Without a clear and detailed map, you’d easily get lost and end up asking for directions at a local diner. But nowadays, you wouldn’t plan a trip without using the GPS on your phone or an integrated navigation system. Objective and Key Results, or OKRs, can be one of the most powerful engines of success for any organization.

You can’t expect employees to proficiently do their jobs without first laying out clear objectives. They need to know where the company’s goals lie before they can achieve any growth. That’s why you should be implementing objectives and key results (OKR) into your employees’ performance management.

Look at it this way – who is going to be more productive, a worker given a clear list of company goals and instructions on how to achieve them, or a worker who’s left to figure things out on their own? If this is all news to you, don’t worry. We’re going to walk you through the details and break down exactly what OKR means, where it came from, some of its benefits, and how to build it into your company’s employee evaluation system. Download the ebook “The Skeptics Guide to Performance Management“ and get started on improving your performance management process.

What OKR Means

OKR is an abbreviation for “objectives and key results.” Essentially, it is a framework that lets organizations manage their goals and actualize growth strategies. This framework helps employees focus on their yearly expectations, improve transparency between workers and upper management, and keep everyone in line with corporate standards. This is all possible by structuring who does what work around the objectives at hand. This way, the right employee is working the right job.

Before we go too much further, let’s break down the parts of the acronym OKR.

• Objectives refer to the goals that a company wants to achieve in a set amount of time. This ideally fits a year-end model but could also be lengthened to beyond a year or shortened to quarterly results. Effectively, objectives state where the company wants to go. If we are sticking with the roadmap analogy, think of this as your final destination.
• Key Results are the steps on the way to achieving a final objective. Generally, companies break their objectives into five or so main steps that employees can work through to get to the final result. Think of key results as road signs telling you how much further you need to drive.
• From there, some companies even break key results into more specific initiatives. These detail exactly what work employees must do to meet their deadlines. Consider initiatives as your navigator, telling you when and where to turn.

Setting up a framework gives employees a set of rules so they know where they should be focusing and what points need prioritizing first. With OKR, final outcomes are measured rather than employee output.

How OKRs Can Benefit Your Business

Compared to employees who lack a clear set of objectives and key results, workers using OKR perform more productively and complete their assignments more effectively. You’ll see a boost in overall performance, which will translate to a boost in sales. More importantly, though, you’ll see a change in how your employees interact with their work and management.

One of the most significant benefits of implementing OKR into your company’s performance management process is that employees will want to take an active role in their work. By making the company’s objectives transparent to employees, they will feel more inclined to engage with their assignments as they can see how their input works towards a final goal.

Employees want to feel that their efforts are going towards something, and by clearly laying out the full process, employees understand their place in the larger system. They can then prioritize what will have the biggest impact and align with their work to move it forward before a deadline. More engaged employees equate to more productive employees and productivity is profitability.

Developing Clear OKRs

There are a few steps you need to take before implementing OKR into your performance management system. To lay out a transparent roadmap for your employees to follow, you will first need to clearly understand the direction you want to take your company. Consider your current challenges and how they can be solved.

OKR will lay out how you expect to meet a business goal. So, you must first present it in a way that clearly elucidates the steps you want employees to take to execute your business strategy.

Next, you’ll need to be sure that employees know how to actually use the system. Generally, this will fall on your human resources team to make sure that everyone is trained and can receive guidance whenever they encounter an issue. Switching from an older method to a new one always presents a slight learning curve, so be prepared to help employees shift how they think about their work. They should focus more on the final outcomes of an objective rather than sheer output.

Setting the Right Time Schedule

Following how companies traditionally organize things, they usually lay out their objectives at the beginning of the year, following a period of annual performance reviews. These yearly objectives easily align with the organizational structure of an OKR. Work years are then broken into quarters and, for each quarter, you can lay out a key result that is broken into initiatives.

Structuring your year in segments allows management to assess employees’ work throughout the year, eliminating the need for an in-depth annual performance review. Employees can receive feedback as they complete assignments and make changes to the work that is still ongoing. If the current strategy is not working, you can quickly pivot and train employees to fill any gaps in their knowledge.

Filling in the Details

Consider your organization’s long-term mission. What is the purpose of your work? Where do you want the company to go in the long run? Take this mission and make it your ultimate goal. Treat it like true north on a compass, leading you along that roadmap that we keep bringing up. This shouldn’t be something as simple as your end-of-year objective. An ultimate goal could be as far out as ten to twenty years. For example, putting a man on Mars could be considered the ultimate goal of our current space program. There are a series of steps on the way, but if you can plan them out a year at a time, the odds of actually achieving the final goal are much higher.

Having a final goal keeps the company focused and pushes employees toward meeting those ends. Filling in your OKR to meet these incremental stages represents your company’s strategy. Identify what you must achieve in the next twelve months to stay on track and layout step-by-step details of how to complete this work.

But don’t treat your strategy as static. The world is in a constant state of flux, and there’s no telling what could happen. If you are too rigid in your company’s strategy, you could end up making more problems than are solved. Be sure to constantly review your company strategy throughout the year to identify any possible weaknesses. Collaborate with your managers and employees to identify how a strategy can best meet the year’s end goal.

Now, we know that you probably have a few questions about how to get started with OKR. To help you out, we’ve compiled a few of the most common questions to clear up any confusion.

Frequently Asked Questions 

What are the characteristics of a good year-end objective?

Company objectives should align with your company’s long-term goals. The idea is to think forward to the future rather than simply planning year by year. Consult with your upper management and determine how this current year fits into the company’s desire for the upcoming future.

Year-end objectives should be impactful and push the company forward. If the sum of an entire year’s work doesn’t have a positive effect on the business, you likely have not planned out an effective goal. Achieving objectives should be something to celebrate, not just a whizz and bang.

How can I keep employees focused when objectives cover a longer period of time?

With a well-developed OKR, you’ll be able to keep employees focused on the year-end objective without detracting from each day’s most relevant work. By breaking objectives down into quarterly key results and then further into initiatives, employees can triage what needs to be done first and then focus their attention on their assignments. They’ll have access to the entire year’s strategy, but from day to day, they’ll have clearly laid out instructions on how to get there.

How can I make Key Results more effective?

Just like effective year-end objectives, key results should work towards the next higher level. Think of an OKR as a pyramid. In order to reach the top, you must first fill out the bottom. To reach your year-end objectives, you must first set key results that build towards the goal. Key results should not be minor developments, either. These are quarterly targets that should more your company significantly closer to achieving that year’s productivity.

Also, be specific with what you expect from your employees. It doesn’t have to be as detailed as an initiative, but be sure to clearly define the scope of your strategy for the period of time that employees have. Key results might cover a wide range of assignments, but if you go too broad, employees will struggle to follow the strategy.

Why focus on outcomes rather than output?

Just because your employees are capable of pouring hours of labor into their work doesn’t mean that the company is guaranteed to be more profitable. Rather than the sheer volume of output, it’s the quality of an employee’s work that will push the company forward. You would buy a single fresh apple before wasting money on a ton of rotten ones.

By focusing on outcomes, you can shift the company’s focus away from producing more labor to achieving more success. At the end of the day, success is the ultimate goal of any business, and by reducing inefficiencies, improving quality, and boosting performance, you can finally reach this goal.

Where do initiatives fit into an OKR?

Going back to our analogy of a roadmap, initiatives are the step-by-step directions that guide your employees through each higher level within the OKR. Initiatives are basically a breakdown of the key results. Therefore, more so than any other level in the OKR, initiatives MUST be specific. These are the assignments that bring your company closer and closer to achieving its goals. For a strategy to be transparent and understandable, initiatives should be completely unambiguous.

It’s also crucial that you put initiatives within the employees’ control. Using precise verbiage such as write, release, or develop frames initiatives in a way that they can be accessed in an employee’s day-to-day work. They’ll know exactly what’s expected of them. Employees will appreciate knowing that they aren’t dependent on someone else to complete their assignments.

Getting Set Up

If you are committed to making sweeping changes to your business for the better, you are probably wondering where to get set up with OKR. While you could try manually implementing OKR into your business model, we have a better solution. Using our performance management software, you’ll be able to streamline the entire framework into a straightforward and user-friendly platform. As employees complete assignments and move toward the company’s final goals, their progress is recorded and stored as a performance report.

Our software is completely cloud-based, meaning that anyone with a login can access the platform from mobile phones, tablets, or notebooks. As long as there is a stable Internet connection, employees can make use of our service. This means they can complete work on the train during their daily commute, while on business trips, or really during any available hour that they can dedicate to work.

They’ll have complete access to the entire framework, and should strategies change throughout the year, they’ll know without having to sit it out on the sidelines. Employees can track their contributions to the company and feel the collaboration between employer and employees.

What is most impressive, though, is that as workers complete assignments, they can receive automatic feedback continuously throughout the year. They will no longer have to wait until their annual performance report because they’ll know how they’ve done while the work is still ongoing.

This benefits more than just the employee, though. Providing your workers with feedback throughout the process lets them make adjustments and correct where they’ve been making errors. If an issue seems to be departmental, you can simply pinpoint where the weakness lies and implement training to root out the problems. With our performance management software, you’ll have the power to boost productivity in real-time.

eLeaP can get you set up with all of this and more for a low and manageable price. Rather than paying an upfront installation fee, just subscribe to a monthly subscription, and you’ll have access to our service. Start with your 30-day free trial, or can contact eLeaP today at +1-877-624-7226 or email help@eleapsoftware.com if you want to discuss how you can leverage the OKR framework in your organization.

Conclusion

You shouldn’t expect employees to know where they’re going without a map. But that’s where OKR can save the day. We’ve given you the information and means to start navigating on your own. So, now that you’ve built your own roadmap, you will start to see how it affects the journey. It’s time to buckle up, set out on the road, and drive into your business’s future. With transparent objectives, clear key results, and detailed initiatives, your company will soar into newfound productivity.

But productivity is not the be-all and end-all of a good company. By laying out a clear and transparent strategy for the work year, your company will undergo a big cultural shift, too. Rather than focusing on output, employees will finally see the bigger picture and work toward the future. Simply break your strategy down into consumable bites, and employees with see exactly how they can contribute to management.

More engaged employees are happier and more fulfilled in their work. All they needed was an open line of communication and a means to take control of their place in the bigger picture. It’s time to start working together as a team, and with the OKR capabilities of eLeaP’s people success platform featuring world-class performance management software, you’ll be on the right track. Call or email us today, and we will draw up that roadmap for you.