Improving Company Productivity
In the second episode of Octobot Tech Talks, our podcast about tech, product and digital trends, we talked about OKRs, short for Objectives and Key Results. It’s a very effective way of improving company productivity through the definition and execution of cross-functional goals and initiatives.
In this blog post, we want to dive further into what the OKRs are, how to use them in your teams and projects, and how you can learn more about this topic.
While writing this article, we relied on two experts who joined Octobot Tech Talks to discuss this topic: Luciano Ferrari is Octobot’s COO, a passionate innovator and entrepreneur, and Gabriel, who works at Peregrinus, a consultancy specializing in agile methodologies and digital tools. He is an OKR expert and has helped many companies, like Octobot, implement this methodology to improve results.
What are OKRs and how did they come about?
OKRs is an acronym that stands for Objectives and Key Results. It is a methodology used by organizations to align team members, define objectives in collaboration, and work on them accordingly. John Doerr created the concept in the book “Measure What Matters,” where he explains how this tool was essential for achieving goals that initially seemed impossible at Google. The methodology then spread to other organizations of different industries and sizes, becoming an effective tool for setting and achieving ambitious goals.
The OKR principles and their adaptability to modern companies
This methodology has a set of principles that make them more current and help to generate a team culture. As organizations mature, roles and processes also grow. The danger is that teams may become overwhelmed, and attention to what is essential may be lost. In these cases, the OKRs can help teams focus, prioritize, and find alignment behind goals that truly transform the institution and avoid wasting time on less impactful efforts.
OKRs help define priorities, encourage dreaming, and are great for setting challenging and motivating goals. Additionally, they foster teamwork and encourage making decisions based on what is most significant to the organization.
In today’s interconnected and fluctuating world, there must always be flexibility in the tools you use, which fosters adaptability. Historically, companies made strategic plans that lasted for years, but today it is very difficult to predict what will happen in the coming quarter.
In order to support modern teams, OKRs provide adaptability and allow them to establish what is important in a more limited time frame, without wasting time on things that are too far in the future, unrealistic and/or difficult to predict.
How do OKRs help define priorities and promote teamwork?
OKRs aim to foster collective intelligence, and align everyone’s efforts toward a shared goal.
Another important feature of OKRs is transparency: objectives and key results should be worked on and communicated amongst the whole team, so that everyone feels part of both the motivation they generate and the responsibility for achieving them. At Octobot, we were able to work on OKRs much more effectively this year, especially because we involved all department leaders in the discussion. Adapting to the methodology format takes time and it is only natural to go through a transition from the previous model to fully embracing OKRs.
Additionally, OKRs encourage creativity and innovation, as challenging employees to set ambitious goals motivates them to seek innovative solutions.
In summary, OKRs are a flexible and adaptable tool that allows organizations to set challenging goals, foster collaboration and innovation, and stay focused on results that will truly lead to success.
Gradual implementation adapted to organizational culture
The implementation of OKRs in a company can be gradual and adapted to the organizational culture. Objectives can be defined quarterly, monthly, or annually, depending on the context and the company’s situation. It is important that the leadership team is the first to implement them and communicate expectations. It is also essential to understand that this is a transition, and it is possible to fail in defining OKRs initially, but it is important to learn from those mistakes to make a more effective second iteration.
In the case of Octobot, we applied the tool when our leadership team and operational structure were strong enough; in addition, we sought the help of Peregrinus, who modeled the implementation process and provided a more objective perspective. This allowed us to obtain more benefits from the tool due to a higher degree of organizational maturity, and align teams behind ambitious goals such as “scale our essence,” which aims to have 90% of Octoboters as promoters of our organization.
If you want to know all of our objectives and initiatives, take a look at this blog post.
Tips for starting to implement OKRs
OKRs are composed of two parts: the objective and the key results. The objective is the most motivational description of what we want to achieve, while the key results are specific and measurable indicators that show if we are getting closer to the objective. To establish effective and measurable goals using OKRs, it is important to follow these steps:
- Define the objective: The objective should be ambitious, easy to remember, and understandable to anyone within the organization.
- Establish key results: Key results are associated with each objective. They should be specific, measurable, and focused on the impact for our employees or customers. They should be focused on results so they will not become tasks. For example, instead of saying that your key result is publishing 5 videos on Youtube, it should be generating over 1,000 visitors on Youtube. Rather than a task, you want to aim at the result.
- Use the 60-70 rule: If, after the period of time in which we defined that we wanted to reach the objective, we have reached 60 or 70% of the expected result, that is a very good sign. The team should feel proud even if they did not reach 100% because it means that the objective was too ambitious, but that it could be fulfilled to a great extent.
- Generate management habits: It is important to periodically monitor the OKRs fulfillment in order to enhance their use, better manage them, and redefine them if necessary. In our case, Octobot’s leadership team has biweekly meetings to review how the OKRs are coming along and the lessons learned.
Common mistakes in implementing OKRs
In the implementation of OKRs, there are several commonly made mistakes. Here are a few and how they can be avoided:
- Not providing adequate follow-up. It is important to establish mechanisms or agreements to monitor the objectives and key results to ensure that they are achieved. In the case of Octobot, each objective has its owner as well as a team member who facilitates the leadership team meetings to help track our OKRs.
- Defining OKRs in a small group. It is important to involve the entire team (or at least a significant part of it) in defining the objectives and key results. Implementing OKRs can be different for each team and organization; it can be a movement that starts from leadership and later reaches the whole organization, or it can be a bottom-up movement coming first from teams. Either way, it’s important to start trying and see how things evolve.
- Applying them abruptly. OKRs are a dynamic tool; use that in your favor and treat this as a transition rather than a 180° change. It’s best not to force this on your organization; do it in steps and adapt the tool as you go. Your company will thrive when the tool fits it well.
In conclusion, adapting OKRs to different teams or companies requires careful and strategic planning. Whether through a cascading or bottom-up approach, it is crucial to establish common goals and enable each team to have ownership and accountability for their objectives.
At Octobot, we are committed to achieving our objectives and key results this year, and we hope these tips have been helpful in your own OKR implementation process.
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