“Ideas are easy. Execution is everything.” – John Doerr (Measure What Matters)
OKRs (objectives and key results) can assist you in achieving your objectives, regardless of their types. Businesses that have used and benefited from OKRs include Google, Allbirds, Netflix, and many others.
OKRs are possibly the best and safest opinion if you want to work on your own objectives, the objectives of your organization, or just want to recommend a new management solution to others during administrative meetings. The OKR method aids in the transformation of good concepts into excellent implementation. They increase employee involvement and motivate high-performing teamwork. However, it is important to give enough time to your employees to get used to the OKR framework when you first implement it. This blog will serve as a guide on how to create your first OKR plan.
How to Establish the Proper OKR Culture?
For outcome-driven organizations, OKR planning is an effective tool. However, if employed incorrectly, it may have a negative impact on the overall confidence of the workforce.
This is the reason why you must first examine the situation:
- Is there a distinct vision?
- Is it encouraging for individuals to take on challenges?
- Is there culture of tolerance for mistakes and failures?
- Do you handle issue resolution with a customer-focused mindset?
- Is there a sense of responsibility on the squad?
There is no necessity to know all of the solutions straight away, but you must assure that you will engage in creating an atmosphere conducive to OKR success.
How to create First OKR Plans?
Here is a step-by-step procedure for creating the first OKR plan for your firm:
- Smart Small
Begin small, with a team willing to advocate the OKR framework in your organization. It does not need to be the management team, but it must be a party that understands the importance of OKRs in your company. There will almost certainly be some doubters, so it’s better, to begin with, a tiny group to learn the ins and outs.
You don’t even need numerous levels of OKRs the very first time. It is understandable and completely okay, to begin with, a basic OKR strategy for the firm. Then, by gaining more experience and understanding the system, you’ll be ready to include additional individuals in the next quarter.
💡 We encourage a group of at least 5 individuals for quarterly OKR planning. You don’t need to be concerned about long-term annual plans just now. Key Results need to be monitored every week. An Objective x Key Result format of 2×3 is advisable.
- Determine your goals
“Alignment before metrics”
This is a phrase that you should remember while doing an OKR evaluation. It’s tempting to get caught up in disputes over Key Results, but they won’t make any difference if your predefined Objectives are incorrect.
You should begin by outlining the goals you wish to attain for the upcoming quarter. Major firms use the AARRR funnel system to identify their objectives. It is a straightforward framework that splits your customer’s experience into five distinct stages:
Acquisition (The number of people who are aware of your company’s existence)
Activation (The number of people who have tried your product or service)
Retention (The number of people who have returned after initial visit)
Referral (The number of people who have invited others to try out your product or service)
Revenue (The number of people who have become active paying consumers)
Now, all you need to do is to determine which two levels of the funnel will require your attention in the coming quarter and convert the steps into suitable sentences that convey the intended effect.
- If you decide to focus on “retention” your objective may reflect “Build X% retention rate”
- In the same way, if you decide to focus on “revenue” your objective may reflect “Raise sales to Y per month.”
Activation and Retention are considered to be priorities for an early-stage startup targeting product and market synergy. Then, once they’ve determined that they can offer something that the market desires, they’ll shift their focus to marketing through Referral and Acquisition activities.
For a 3×3 layout, we recommend just using two steps of the funnel. This is because establishing 2 different Objectives at a single level will allow you to focus more effectively than attempting to handle every aspect of the entire AARRR funnel. Your Product development team may focus on Retention through features, whilst your Customer Service team can focus on Retention through tutorials and demonstrations.
💡 Implementing a system of management-by-OKRs requires a great deal of synchronization and a strong team effort. Several mistakes tend to be made when rolling out the program for the first time. To avoid these errors, it is best to have a sufficient understanding of what objectives are, why they are important to business, how they can be implemented, and how to track their effectiveness.
Here are some of the most common OKR mistakes while setting objectives:
- Too many objectives
People who are new to the OKR framework believe that establishing more OKRs in a particular quarter is beneficial as it ensures more work is done in less time. Actually, it is quite the opposite. More objectives mean team members need to divide their workforce and focus on different goals simultaneously which ultimately leads to missing deadlines and overall, less productivity.
- Vague objectives
An OKR objective must be precise, relevant, and measurable. It is pointless to create an aim that does not provide a specific target for team members to pursue. For an OKR example, if you want to enhance customer engagement, setting a goal of “improving customer experience” makes little sense. The proper practice would be to put it up as follows: “increase customer review score to X percent in this quarter.”
This gives the staff a more specific goal to strive for.
- Too ambitious or too easy objectives
The goals should be both lofty and achievable. Though most managers would want to have a 100% completion rate on OKRs, in theory, you should only have an 80% success rate. This enables your team to strive and achieve their full potential.
Now that your objectives are ticked off from your OKR checklist, you can put them to trial with your squad.
- Determine your Key Results
After you’ve determined your objectives, you can begin putting the Key Results beneath them. Your Key Results should adhere to the following guidelines:
- Be precise about your objective.
- Performance should be visible every week in numerical values.
- It’s fine to have lofty goals, but they must be doable.
- Your Key Results should be related to your objectives.
- There needs to be a specific deadline for achieving your goal.
Defining Key Results is typically difficult since it is difficult to make them quantifiable, especially if your product has not yet been deployed in the market. If this is the situation, you must try to identify another substitute indicator of your team’s progress.
💡 Consider combining your Key Results to ensure that they do not have any negative side effects. For an OKR example, you can combine an objective centered on new subscribers with another focused on retention rates.
- Make a list of your initiatives
Prior to actually declaring the first OKR plan complete, it is strongly advisable to outline some of the major efforts that can assist your teams to achieve steady progress. This is a proven and easy method to make sure that you have provided your team the correct direction to follow, and it will assist every team member in linking their activities to the overall corporate yearly goal.
💡 However, you don’t need to overdo it! Please understand by providing your set of initiatives, you’re just providing a direction to your team of what your strategy may look like in respect of objectives and key results. You don’t need to attempt designing the complete roadmap of OKRs for your team.
- Begin monitoring your strategy
Establishing OKRs is perhaps the most difficult aspect of your first OKR plan, but monitoring them is by far the most rewarding. You need to have an easy way to measure performance each week – online OKR software like huminos can assist you to simplify much of the procedure of OKR reviews.
Organizational structure has changed, decision-making is shared more broadly, and the workforce is more diverse than ever before. In your organization, how do you define success? And how does it translate into particular goals for your employees?
Get the most out of your corporate goals with huminos.
Huminos makes it easy to define what success looks like for teams in every part of the organization by translating high-level vision and strategy into concrete, measurable OKRs in seconds. It’s now easier than ever to explore and monitor your OKRs and to learn and share best practices around goal definition and achievement. With huminos you can track your real-time OKRs, lift your goal setting to a whole new level, share and discuss all metrics, set one-on-one meetings, review data quickly and easily as well as get the insights you need to succeed.