How to create a culture of ambitious goal-setting
One of my clients, let’s call him John, has been asked to do a presentation on OKR’s (Objective and Key Results) during their executive planning session late last year. He was one of the younger team members, but he was nervous and concerned if some of the more senior leaders will be open to this more agile approach.
He phoned me directly after his presentation with the news that it went so well that the CEO has changed the agenda to incorporate time for the EXCO team to start defining their team’s OKR at the session.
This was their first attempt to use OKR’s and wanted to ensure they focus on long- and short-term goals which they agreed on:
- An annual high-level business OKR’s,
- Quarterly OKR’s for each team and
- Weekly check-ins to track results.
You might wonder what the hype is all about.
OKR’s is an agile way of doing performance management and is an outcome-based approach. Many businesses, for example, Intel, LinkedIn, Airbnb, Dropbox, Twitter, have adopted this approach with success.
OKR is divided into 2 parts:
- The Objectives is the inspirational qualitative description of what you want to achieve.
- Key Results are outcomes you want to achieve; the quantitative measure of results that will measure the value and impact to your clients or employees.
Here is an example of an OKR for the People (HR) team for a quarter:
- Objective: Create an outstanding Employee Experience
- Key Result #1: The Employee Nett Promotor Score will increase from X to Y
- Key Results #2: Increase the number of mentorships from 30 partnerships to 45 partnerships Key Results #3: Design 3 more online workshops (this is an example of a poor key result as this is counting activities instead of measuring impact). A better key results might be ‘Increase the number of virtual workshop attendees from x% to y%.
I often get the question: “What is the difference between an OKR and KPI?”. OKRs is a based on tracking data, where KPI is a data point. For example: a KPI for the People (HR) function can be the attrition rate or the time to fill a vacancy.
Here are some ground rules to follow if you are considering implementing OKRs:
- Ensure alignment. Ensure that teams OKR’s are transparent and aligned with the overall business objective. It should form part of the organisational culture. It can be informal and fun.
- Focus on priorities in your business; don’t create too many OKR’s as this can lead to lack of focus.
- Objectives are not activities or “to do” lists. This should be short, memorable and inspirational. Ask yourself: ‘Does this motivate, engage and challenge the team?’
- Key Results should be ambitious and a stretch. Consider putting the word aspirational in brackets to be clear that it is an ambitious outcome. Define 2-3 key results per objective.
OKR’s have a bi-directional cadence – it is not cascaded top-down. OKR’s encourage bottom-up and top-down conversation which leads to the alignment between teams. Often teams opt for shared OKR’s; this enhances alignment as each team might have different initiatives to achieve the OKR whilst working towards a shared goal.
When OKR’s are transparent, it contributes to the alignment. All OKR’s should be visible to everyone in the company.
OKR’s are decoupled from remuneration. Consider making OKR’s one (not the only) aspect of input for employee performance. The difficulty (ambitious outcome) and the impact of the goals itself should not be ignored. This will result in creating a culture of ambitious goal-setting and soon employees will focus on impact and value to clients instead of only the percentage of goal achievement as this relates directly to a bonus payment.
What will performance look like post-COVID-19?
The COVID-19 pandemic brings new things to think about at a leadership level. This is a defining leadership moment. It is a balancing act – the short term actions vs compromising the sustainability of the business and the intersection of employee and company wellbeing. Leaders need to exemplify humanity. We have to understand and embrace concepts like empathy, compassion and care and show it. To fake it, won’t serve leaders in this critical time – colleagues are attuned to the realness of their leadership. As a leader, you set the tone at the top.
How one measure the performance of your teams is a definite one to consider – now and beyond Business as usual will not be the same as what it was pre-COVID-19, and forward-thinking leaders know this.
Make OKRs work for you
For the companies that are already using OKR’s, a recommendation would be to add a step to overcome the uncertainty during the COVID-19 pandemic. Teams can use assumptions as facts and base the OKR’s in the short term on these assumptions. Think of assumptions behind the marketplace or changing clients’ needs. Test these assumptions with stakeholders in the business to sense-check it and use this as a basis for setting OKR’s.
With big changes come big opportunity. This pandemic provides the opportunity to experiment and learn in uncertain times and to see what is working best. It also heightens our ability to be adaptable and to think differently.
This may be the ideal time to start using OKR’s and experiment and see how this is impacting the performance, motivation and engagement of your teams.