How Does Business Use OKRs to Gain a Competitive Advantage?

Apr 07, 2022
How Does Business Use OKRs to Gain a Competitive Advantage?

Businesses can use OKRs to gain an edge over their rivals only if implemented timely & precisely.

Every business faces challenges from a variety of factors, ranging from financial factors to customer habits and market rivalry. These interruptions have a significant influence on every aspect of your company, including sales, marketing, design, and development. And the fact is that these interruptions may strike at ridiculous speeds, and employees are frequently unprepared to adapt adequately and promptly.

This is where OKR for businesses comes in. OKR helps break down ambitious corporate objectives into small goals that are followed by the teams in their given limited period. This blog is focused on the basics of OKR for businesses and how to use them to gain an advantage over your competitors.

What are OKRs?

OKR or Objective and Key Results is a popular goal-setting system that is made popular by Google. Companies use it to set goals for their teams, as well as to monitor and track outcomes and team progress. It is extremely beneficial in keeping a corporate structure clear and increasing output by encouraging responsibility and inventiveness.

An OKR system consists of 3 parts –

  • Objectives
  • Key Results
  • Initiatives

What are the Objectives?

Objectives are specific goals that a company sets for its team members. For example, if the firm is experiencing a period of poor customer evaluations, they might establish a goal of boosting their customer review score to 80% in 4 weeks. The objective here is to raise the customer review score from wherever it is to a total of 80% in the given period of a month.

What are the Key Results?

Key Results are a collection of measures that track your team’s progress toward the organization’s goal. For example, if the organization has set the goal of growing the customer review score to 80% in four weeks, the customer review score at any point in time throughout that period is the critical outcome for your team at that precise moment in time.

A Key Result, on the other hand, must be measurable. It is not allowed if the key result contains no numerical value.

What are Initiatives?

Employees are never given objectives as part of their to-do list. For example, if the corporation sets a goal of increasing its customer review score to 80% in a month, staff must take specific actions to achieve that goal. They can create a customer suggestion area where they can access the root cause of negative reviews and act on it. Initiatives are actions taken to come closer to a specific goal.

Why are OKRs beneficial to companies?

Recently, business executives have been concentrating on enhancing business synergy and clarity to effectively deal with change. According to a Deloitte study in 2019, 65% of firms have adopted some type of team-based cross-functional approach. This is exactly the purpose served by OKR framework.

OKR allows breaking through these operational barriers which allow workers to properly comprehend their teammates’ roles and impacts, projects being undertaken in other departments of the company, and how they relate to wider corporate objectives and aspirations. Establishing an atmosphere that encourages synchronization and openness allows teams to effectively adapt to changing business patterns and situations, eventually affecting the overall sustainability of the firm.

According to the Deloitte report, 53% of firms that changed to a collaborative or network-based organization saw a substantial boost in productivity. OKRs may help firms achieve responsiveness, transparency, and coordination to obtain and maintain a competitive edge. Businesses that are coordinated have the resources to develop more flexible procedures. So, instead of falling behind a rival by weeks or even months, they may swiftly collect their squad and devise a plan of action by using OKR for competitive advantages. According to CA Technologies study, the advantages of boosting company agility are numerous, including:

  • More time to capitalize on fresh possibilities
  • Increased competitive edge
  • Improved staff retention and productivity rates

What are the benefits of OKR?

The benefits of OKR software are listed below:

  1. Provides a Centre of Interest

The first advantage of OKR for businesses is that they limit the number of goals that may be set by the organization. While the organization can set more than one objective, the number of objectives shouldn’t cross seven. The fewer the objectives, the easier it is for employees to focus on them and work on them.

When setting an objective, the most important query going on should be: “What is essential for the organization going into the next 3 months?”

πŸ’‘ When you set an objective for your team members to follow, it provides them a center of interest to focus and improve upon. You provide your team with a direction and a foundation for evaluation by standing strongly behind the established top-line OKR objectives.

2. Builds Synergy

Once the essential objectives are established, the actual job starts. You and your team members need to relate day-to-day operations to the firm’s corporate goal as it transitions from you developing OKRs to initiatives taken by your team towards that goal. This relationship is known as synchronization, and its importance cannot be emphasized.

3. Builds Commitment

Commitments follow concentration and team synchronization. These obligations are openly tracked. Each member of your team must send out very obvious indications to the rest of the team that they have been aiming towards their respective OKRs. Every quarter, you should share OKR accomplishments with your team via all-hand presentations.

πŸ’‘ This helps indicate that both you and your team understand what you’re aiming for next. It also assists in understanding the progress of your team by following recent OKR key results. You can even consider extending your OKR period if your team shows promise, synergy, and transparency.

4. Monitoring Key Results

The ability to monitor key results from production to result is one of the reasons why planning my goals is so prevalent among top-tier firms. Every objective should be traceable using the criteria that were specified when they were built. While OKR for businesses does not require everyday monitoring, regular check-ins, ideally weekly, are necessary to avoid slippage.

πŸ’‘ Using these benchmark points to assess your present OKRs can prove to be highly beneficial in the long-term run of your company. It also assists in gaining a better understanding of your team members. In case you see the key results are not going well, you can easily ask the team leaders the reason for such low performance and act accordingly.

Is it still possible for your team to attain this goal?

If not, what’s the reason?

5. Maximize Production

Even if you want your team to achieve and retain a perfect score on OKRs, in principle, your team should complete roughly 80% of them.

πŸ’‘ The organization’s objectives should be demanding yet reachable to bring forth the greatest performance from your team members. Thus, productivity is maximized.

Common Mistakes in OKR Planning

Deploying OKR is a process, not a one-time event. Transition does not occur overnight, as it does with any institutional change. However, it is feasible to change the company’s fundamentals in a few months by synchronizing and activating the workforce. Here are some frequent mistakes are done when implementing OKR for businesses:

  1. Using as a To-Do List

As a leader, you have to comprehend the differences between value-based objectives and activities on a to-do list. Objectives should be focused on widespread long-term corporate objectives. Employ OKR to determine if you are contributing value rather than just completing duties.

2. Establishing too many Objectives

OKRs set by you are your subjective interpretation of your primary concern for that quarter. One typical error businesses make when setting OKR for businesses is setting up too many objectives for their teams with the primary goal of completing more work in the shortest amount of time. However, it reduces the total value assigned to each activity, and the OKRs become a part of the employee’s to-do list.

3. Not Synchronizing

The main purpose of OKRs is to improve clarity and synergy between parties involved. You need to talk to the team about cross-departmental objectives and the possible OKR pitfalls that are stopping them from reaching their full potential. The more you interact, the more comfortable your team members will be around you. This will help them become more productive and creative in the long run.

4. Not Monitoring

While regular monitoring is not required, weekly check-ins are recommended to guarantee smooth job progress. Without sufficient follow-up, your OKRs might quickly become like your New Year’s Resolutions.

Conclusion

Organizations around the globe consistently fail to create alignment and engagement around their goals. OKR is a qualitative framework for creating qualitative goals, helping you determine what you want to happen and why. It provides a straightforward method for translating a goal, a target, a vision into a series of measurable Objectives and Key Results (OKRs) that can be easily understood, shared, and tracked for achievement by the entire organization. myOKR tracks OKRs in real-time, helping individuals take action based on their OKRs, providing meaningful data used by leaders to make better decisions about how to lead their teams.

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