OKR method: how to use it in practice?

Mirosław Suszek, director of the outpatient care department at LUX M, talks about how to effectively define goals in the company and implement them.

To be successful, every company should have people in their team who have the competence to set goals and then effectively implement them. A proven method is the OKR method – Objectives and Key Results, which was develop in the 70s at Intel by Andy Grove. Mirosław Suszek, director of the outpatient care department at LUX M, will introduce us to what the OKR method is and explain how and why it is worth using.Although Grove is consider the creator of the OKR method, its foundation is the work of Peter Drucker. It is also worth mentioning John Doerr, also in practice an Intel employee, who focus on popularizing this method, and after leaving the corporation, he present the OKR method to a small start-up call Google. The method turn out to be a great success and help the company grow into a technology giant. This start the era of using OKRs to define and achieve goals in companies.

What is the OKR method?

Choosing strategic goals is not easy. Often, companies that set too many goals are unable to achieve them all due to limithuman bahrain mobile phone numbers database infrastructural or financial resources. To avoid these mistakes, the OKR method is us which helps to achieve strategic focus on what is most important for the company at a given time. The time period in the OKR method is call terms, which should last from 3 to 6 months. Therefore, the goals must be select in such a way that they can be achievin one term, which means that there cannot be too many of them.

The goal is always qualitative. It is extremely important that the goal description is aspirational – motivating to act and easy to remember. However, the method of measuring whether the goal has been achieved is based on selected numerical measures, the so-called Key Results. For one goal, we should develop 3 to 5 Key Results. Why? Often, achieving one qualitative goal is associated with achieving improved results in various areas. Plus, as the name suggests, we always measure the results of actions.

So how is in practice success defined?

In the OKR method, we focus on the effect, with a flexible approach to how to achieve the expected effect. Knowing the current value of the Key Result as a starting point, we determine the expected value of the Key Result, which should be ambitious. A high level of ambition causes the activation of additional potential among employees. It releases creative thinking on how to achieve a strategic leap in a given area.

The greatest success is when the expected results for all Key Results are achieved. On the other hand, even if teams are not able to achieve every Key Results 100%, but they achieve a lot of progress compared to the current situation, we still consider it a success – this reduces stress and gives a sense of security.

We have a task: to measure an ambitious goal. How should we approach this?

Most companies certainly have a portal dedicated to their customers.

For example, we could set a goal like this: “Sales results through the Customer Portal will be the best in the company’s history.”

The goal is ambitious and easy to remember. The first and key question: why is sales via a portal important for a company? Goals always result from the company’s strategy, the context is important – what does the company want to achieve in a given period and how is the portal supposed to help with this? To sum up email marketing: learn how to make good use of this tool first we need to be sure that the goal is right, and then choose the right measures for it – key results.

We continue our example:

Goal: Sales results through the Customer Portal will be the best in the company’s history!
Term of office: 6 months

Key results:

The number of customers visiting the portal will increase from 200 thousand to 350 thousand per month
The conversion of visitors to buyers will increase from 15% to 18%
The average value of a shopping basket will increase from PLN 78 to PLN 90
Sales revenues will increase from PLN 2.34 million to PLN 5.67 million

It is clear that the company wants to improve the Portal’s results in each of the key aspects:

Ad. 1: marketing communications
Ad. 2: effective sales process
Ad. 3: development of available products
Ad. 4: financial results

When defining OKRs, teams usually have ideas on how to implement them, but they may not yet have confirmed, detailed plans. So we do not say what exactly the team should do to achieve the OKR. This is the team’s role. In a traditional methodology benin lists we would probably set a goal, choose indicators and define projects that will help us achieve the goal. In the OKR method, a list of projects is created, but it is not fixed, which allows for flexible adaptation to changes, because the final result is key.

Example: The planned changes to the IT system turned out to be too expensive, which resulted in the need to look for other possibilities for implementing KR, e.g. by simplifying the purchasing path or adding another payment method.

How to select goals and results by focusing on a limited number of them?

It can be a top-down process, i.e. the board has a vision of what the organization should achieve and it is the board members who define the qualitative goals. The selection of KRs can already take place in teams. It is also possible to have a process in which teams develop goals and KRs. However, the board will still usually accept them to ensure that the strategic direction is maintained.