There is an increasing number of companies implementing the Google’s Objectives and Key Results (OKRs) methodology for objective setting. By making each objective in the organization visible and transparent, employees have a better line of sight of how they can contribute to the success of the company. Better understanding of the objectives leads to higher engagement in the workplace.
Recommended Reading List on Objectives and Key Results (OKRs)
- Frequently Asked Questions: Objectives and Key Results (OKRs)
- The Guide to Setting Company Objectives and Key Results (OKRs) MUST READ!
- The Guide to Effective Employee Engagement
- The Guide to Facilitating Employee Feedback
Employees are encouraged to set their individual objectives by aligning their contributions to the departmental and organizational objectives. Setting organizational objectives are not easy. You have to take into consideration internal factors such as financial resources and human capital as well as external factors such as competitors, demand for the products, and the economy. Many CEOs struggle to set their organizational objectives because there are too many variables that can affect the end results. Here are some of the best practices I recommend to my clients when consulting on how to set their higher level OKRs.
Know your strengths and weaknesses
Many businesses conduct a SWOT analysis where they identify their internal Strengths and Weaknesses as well as external Opportunities and Threats. This information allow you to develop strategies that are relevant and realistic to your organization. Investigate what the future trends may be in your industry. You want to develop objectives that will give you a competitive advantage. There are also other methodologies you can use to identify your strengths and weaknesses. At 7Geese, the CEO, Amin Palizban uses the Hedgehog Concept by Jim Collins to identify our long term objectives. He identifies what we are best at in the world, the economic driver for 7Geese, and what our team is deeply passionate about. While some CEOs may find this technique simplistic, the Hedgehog Concept is a great way to figure out what your company’s vision is and where you ultimately want to end up. It provides you with a great framework to start defining your organizational objectives.
Ask yourself where do you want to be in 3 months, 1 year, and 5 years
The vision that you have for your organization should be reflected in your company’s objectives. Organizational objectives can be a mixture of both short term and long term goals. A great tip is to start with your 5 year goals. Where do you see your company in 5 years? What do you want to have achieved by then? Then think about the strategies you want to pursue in order to achieve those goals. These strategies are your 1 year objectives. What you have to do right now to support your business strategies are your quarterly or monthly goals.
For example, suppose your 5 year goal is to have 1 million users for your product. To get to that goal, you may want to expand your product internationally. Your 1 year goal can be “Establish a branch in California and London”. Then break it down further to set your quarterly goal “Conduct a needs analysis for the US and European market”.
Use the SMART model to set your organizational objectives
Try your best to make your objectives and key results Specific, Measurable, Attainable, Relevant and Time bound.
For example, you are a startup company in Vancouver and your long term goal is to be recognized as the best company in your industry. Instead of setting your organizational objective as “Being recognized as the best company”, you would apply the SMART model to your objectives and ask yourself these following questions:
Specific – What type of company do you want to be the best at? On what scale do you want to compete? Do you want to be the best company in your area or in the world?
Measurable – How will you know when you have achieved your objective? What benchmarks are you going to use to measure your success?
Attainable – Is this objective achievable given your resources? What are the obstacles that you are going to encounter and can you get past the hurdles?
Relevant – How relevant is this objective to the company and its employees? Will it benefit your organization?
Time bound – When do you want to achieve this objective by?
Taking into consideration the SMART model, your objective can be defined as “Getting the Best High Tech Company 2015 award by the Business Board of BC by the end of December 2015”.
Think about who is contributing to the objectives
Sometimes CEOs may get confused about the difference between an organizational and a departmental goal. This situation arises within companies that are adopting a flatter organizational structure where they do not have a management level anymore. Ask yourself “who will contribute to the success of that objective?” and “who will have the greatest impact on the objective and its key results?” If anyone in the organization, given the nature of their position, can contribute to the objective, then it is on the organization level.
For example, “Bring in $1 million in revenue” affects your PR, Marketing, HR, Engineering teams and so on. On the other hand, “Expand our team with 50 best talents” is more of a departmental or team-based objective as your HR department or recruitment team will have the most impact on this objective.
Brainstorm with your employees
Many companies leave the organizational objectives to their executive team since these objectives are more on the higher level. However, I always encourage clients to ask for their employees’ feedback as they add more insights to your strategies. Working directly with your own customers, your employees receive information that your executive team may not get. You want to gather as much information possible about your internal processes and clients’ needs before setting your organizational objectives. Think about adding a 360 degrees feedback component to your objectives setting. More information is better than too little.
Setting organizational objectives is a daunting task. Using these 5 tips will help you create a framework around what your company’s goals should be. The most important thing for you to do after setting your company’s objectives is to COMMUNICATE them to your employees. Engage your employees by clearly showing them where your company is heading and how you want to achieve your objectives. Understanding your company’s vision will get your employees to start thinking about ways they can contribute to the success of your organization.Company's goals, Define organizational goals, goal setting using SMART, Google OKRs, hedgehog concept, objectives and key results, Opportunities and Threats, organization goals, organizational objectives, setting objectives, SMART model, Strengths, SWOT analysis, Weaknesses