Introduction to OKRs

One of the hidden secrets of strategy work is that, despite the numerous consultants, most companies do a horrible job of creating strategy. According to the Balanced Scorecard Institute, sixty-seven percent of well-crafted strategies fail. Furthermore, ninety percent of frontline staff have no idea what the strategy is. This disconnect is where OKRs come in.

OKRs, or Objectives and Key Results, are a powerful way to channel everyone in an organization, nurturing a purposeful workforce and achieving amazing goals. However, many organizations fail to deploy OKRs effectively. In this guide, we will explore a step-by-step process to roll out OKRs in your organization and harness their full potential.

What Are OKRs?

OKRs stand for Objectives and Key Results. An objective is what you are trying to accomplish, while key results are the measurable indicators that show you have achieved the objective. Unlike KPIs, which stand alone, key results make sense only when paired with their objective and other key results, forming a multidimensional goal.

For example, if you wanted to create an OKR for health, it would be a combination of your weight, blood sugar level, and stress level. Each key result represents a dimension of reality, and together they provide a more comprehensive measure of success.

Lead vs Lag Indicators

When measuring progress, indicators can be either lead or lag indicators. Lag indicators are evidence that you have achieved a goal, such as stepping on a scale and seeing your weight. Lead indicators, on the other hand, are signals that you are on the right track, like the number of steps you take daily or your calorie deficit.

In the context of OKRs, some argue that key results should be lead indicators. However, it is more practical to have key results as lag indicators, providing clear evidence that the objective has been achieved. Lead indicators can still be tracked separately to guide progress.

The OKR System

If OKRs are a solution, what is the problem? The problem is that managers need to transform strategy into results through their teams. OKRs help articulate the company's strategy in terms that the team understands, enabling them to make decisions aligned with the larger vision of the company.

According to the Balanced Scorecard Institute, sixty-seven percent of well-crafted strategies fail because ninety percent of frontline employees have no idea what the strategy is. OKRs solve this problem by making the strategy relatable and actionable at the team level.

The SPAN Process for Deploying OKRs

To effectively deploy OKRs, we need a process. After years of practice, Mukom developed the SPAN process: Setup, Prioritize, Activate, and Nurture.

Setup

Before setting OKRs, clarify the context. This involves defining the strategy and understanding how your team creates, delivers, and captures value. One useful tool is the SIPA Canvas, which outlines the activities, outputs, customers, outcomes, and impact of your team.

Activities are either processes (repetitive tasks) or projects (one-time initiatives). Outputs are the results of these activities, which are then used by customers to achieve outcomes and impact. This canvas helps create a shared understanding of how the team contributes to the company's goals.

Prioritize

Once the context is clear, the next step is to prioritize activities. Not all activities are equally important. Use the company's strategy to determine which activities should take precedence. This ensures that the team's efforts align with the company's strategic goals.

To evaluate the quality of an OKR, use the OKR Quality Metrics. Objectives should be qualitative and resonate emotionally with the team, while key results should be quantifiable and within the team's control.

Activate

After setting and prioritizing OKRs, the next step is activation. This involves reverse engineering the OKR to identify necessary conditions, leading indicators, and specific activities. Use the OKR Activation Canvas to outline what needs to be done, what should be stopped, and what should be done more or less of.

Activation ensures that the team has a clear plan for achieving the OKR and can track progress using leading indicators. This step also involves identifying the skills, budget, and tools needed to accomplish the OKR.

Nurture

The final step is nurturing, which involves ongoing coaching, feedback, and support. Hold regular meetings to review progress, provide feedback, and adjust activities as needed. The goal is to keep the team focused and aligned with the OKR throughout the quarter.

Nurturing also includes one-on-one sessions where managers provide personalized coaching and support to team members. This helps ensure that everyone is working towards the same goal and addressing any challenges that arise. 

Conclusion

Setting and deploying OKRs is a powerful way to align your team with the company's strategy and achieve meaningful results. By following the SPAN process—Setup, Prioritize, Activate, and Nurture—you can create a structured approach that ensures OKRs are not just set and forgotten but actively pursued and achieved.

Remember, OKRs are not just about setting goals but about creating a culture of focus, alignment, and continuous improvement. By involving your team in the process and providing ongoing support, you can unlock the full potential of OKRs and drive your organization towards success.

Whether you are a chief of staff, a frontline manager, or a business leader, embracing OKRs can transform the way you achieve goals and coach your team. Start implementing the SPAN process today and see the difference it makes in your organization's performance and growth.