Objectives and Key Results (OKRs) is becoming a common goal setting practice among many companies of different sizes and industries. OKRs provide great benefits to stakeholders such as the CEOs, managers, HR leaders and team members.
However, it is not clear enough what the roles of these stakeholders are and how to best position OKRs within an organization so that the methodology becomes a seamless process in your current business operations.
In my last discussion of my blog series on finding success with OKRs, we looked at OKRs from the perspective of a CEO. As promised, this time around we will be shedding light on how HR leaders can find success using OKRs.
Having encountered many HR professionals who feel a sense of panic when their CEOs expect them to implement OKRs within the organization, we understand the idea of implementing such methodology can be quite daunting.
We want to reassure all our HR colleagues out there that OKRs, in its simplest form, is very similar to setting SMART goals.
The difference lies in the use of goal setting methodologies today. Goals are no longer independent, but all strongly aligned with objectives across all levels of companies. Let’s start with the fundamentals: OKRs vs. SMART goal.
OKRs vs. SMART Goals
SMART goals: SMART is acronym for Specific, Measurable, Attainable, Relevant and Time bound. It is usually outlined in one sentence beginning with an active verb. For example, increase my knowledge of SQL to an intermediate level by the end of September.
OKRs: Hold the same element but breaks down the measurement in more detail. OKRs have 2 components: Outcome i.e. what you’re trying to achieve and Key Results i.e. how you’re going to measure success. For each objective, it is recommended to have around 3-5 key results which can be in measured in percentage, numerical value, binary value (complete or incomplete), or currency.
Here is an example:
Outcome (or Objective): Increase my knowledge by end of September
Key Result #1: Complete a beginner-level SQL refresher course with a minimum grade of 90%
KR #2: Organize and participate in 3 peer sessions on SQL internally
KR #3: Complete a intermediate-level SQL course with a minimum grade of 85%
As you can see, OKRs provide more specific measurements on what constitutes as success. For us to be able to fully complete the objective above, we will have to increase knowledge by completing all 3 key results. Key results are determined by managers and team members. Keep in mind that key results are NOT tasks—they are the end results of accumulated daily tasks and efforts.
When referring to the above OKRs example, we can see there is no breakdown on how many hours we need to spend on coursework or a specific order of topics that needs to be covered. With OKRs, managers and team members determine what to achieve. And it is up to individual team members to determine how to achieve it.
Comparing OKRs and SMART goals, OKRs uphold more accountability for individual team members to come up with their own approaches to the challenge.
However, it is very important for your managers to be engaged in this process brainstorming process as well. If team members receive no guidance or feedback on what to achieve for the quarter, the OKRs process will break down.
The other big differentiator is that objectives are cascaded from the company level all the way down to the individual level. The process starts with your CEO and your leadership team outlining the company OKRs i.e. what we want to focus on and execute as an organization for this upcoming quarter.
As key results are set, the next level is the management team. Each manager can then ask themselves, what can my team do to help the company reach its OKRs? Repeating this process on different levels of the company until individual level OKRs can be set. With cascading OKRs, you are ensuring that everyone is working towards the same values and goals.
What you are responsible for, as an HR leader, to ensure success with OKRs
CEOs and leaders are jumping on the OKRs bandwagon, and as a strategic team member, you do not want to fall behind. Implementing OKRs is a company wide affair.
The rollout often falls in the area of responsibilities of HR leaders because they have the resources and training to educate all team members on new processes. At the same time, goal setting hits close to home due to its relationship with performance management, there is also a natural tendency to have HR spearhead the process.
You might wonder how does OKRs link to performance management?
There has been a strong trend in the HR world where companies are moving away from ratings and forced rankings when it comes to performance management. Instead, companies are moving towards a more continuous and lightweight process where managers and team members are meeting on a regular basis and providing feedback in real-time.
With the elimination of ratings, goal setting has taken a more important role because of its excellent opportunities to talk about expectations. During 1-on-1s, managers can then use OKRs as the benchmark for performance and discuss progress, obstacles as well as improvements.
For HR leaders, OKRs can become an integral part of the performance management process. By holding regular 1-on-1s discussing objectives and progresses, managers and team members are both on the same page as expectations are discussed at the start and many opportunities are created throughout, providing real-time feedback.
Therefore, training is not only focused around setting objectives and key results, but a major portion is dedicated to training managers on how to use OKRs as a framework to talk about performance.
How OKRs will affect you as an HR leader
At first glance, OKRs seem to have more benefits for the leadership team i.e. better overview of everyone’s objectives and progress and identifying objectives that are off-track. However, OKRs offer a great range of benefits that tap into HR’s main metrics—engagement and retention:
Stronger alignment to the company vision
Through internal surveys, Deloitte has found that high achieving teams have one thing in common: alignment with the company’s vision. OKRs is a great way to transform the vision into quarterly objectives with clear key results. Team members understand what the focus is and create objectives that will contribute to the overall success of the organization.
OKRs promote full transparency i.e. every team member can see their peers’ OKRs as well as any updates and status assessments. When you see your CEO and your team members all hustling to get the jobs done, it creates momentum across the organization.
As a team member, you also feel a greater sense of accountability to do your part. As everyone starts making progress, the impact from bottom up definitely encourages team members to achieve more, together. Also, what’s better than being recognized on a more continuous basis as you are updating your objectives seeing as managers and peers are now made aware of your progress.
With the workforce breaking down geographical barriers, HR leaders often face the challenge of ensuring that every team member is involved and feels like part of the organization.
OKRs allow all team members to be connected regardless of their location. OKRs promote collaboration, as each team member is accountable for their own objectives but also take pride in seeing the impact trickle all the way to the organization. With OKRs, team members can also see the check-ins and updates done by others which in turn acts as a powerful communication channel on work activities.
The Ultimate HR Leader Checklist for a successful team using OKRs
Wonder how to get started? Here are some guidelines you can follow:
- Create OKRs with your CEO and leadership team based the main purpose of implementing OKRs. Having commitment on all levels is a crucial factor for successful OKRs implementation. It is important for you to have simple straightforward objectives, clear statements on what the end goals of using OKRs are. These statements become your benchmark at the end of every quarter when you are reiterating your process.
- Find your group of champions. Getting the CEO and the leadership team to practice OKRs for 1-2 quarters is a great start and this process is generally spearheaded by the CEO. The next step will be to find your champions. Champions are team members, regardless of departments/teams and managerial level, who can embody OKRs to its essence and be a mentor for the rest of the organization. These are the people whom others will reach out to when they are struggling to come up with their own OKRs. You also want to get feedback from the champions after implementing OKRs with the group for 1-2 quarters as they will provide you with insight that you might not see yourself.
- Plan beyond the implementation itself. Many organizations fail to implement OKRs because they only focus on training the organization on setting the right objectives and key results. The missing piece for a lot of organizations is planning the framework around OKRs. OKRs is not a one-time event; you need to create a strong process within your organization where people live and breathe OKRs. Guidelines on how often to check into an objective, what types of status updates are expected, how to close an objective at the end of the quarter, how many 1-on-1s are expected from a manager etc need to be set in place way before you think about implementing the first step.
- Give your managers the right resources to succeed. Often, the breakdown when it comes to rolling out OKRs happen at the managerial level. Managers are your drivers when it comes to OKRs. You need them to get the right updates from their team members so that they can, in turn, update the leadership team on how they are doing on a departmental/team level. When it comes to OKRs, many HR leaders make the mistake of not outlining the benefits for managers specifically, or worst, providing them with the right training to be successful.. What ends up happening is managers are introduced to the concept of OKRs and then left with the expectations that this methodology should be used within their teams moving forward. Time needs to be spent on training managers on how OKRs can help them become better coaches and how best to integrate OKRs in their team processes such as daily stand-ups or weekly hurdles.
- Set company wide initiatives around OKRs. Make sure that OKRs progress is not only discussed at the end of the quarter. Encourage your CEO and leadership team to dedicate 5 minutes every week to send out a company update. Team up with your IT team to showcase company wide OKRs on screens and dashboards around the office. Implement celebration when teams and team members have achieved their objectives. OKRs need to become part of your culture. Team members should not see OKRs as another thing on their to-do list. Updating their objectives should become part of their everyday routine. It is your responsible HR leaders to ensure that new hires are properly trained on OKRs. Also provide resources for team members to have access to.