What is OKR?
The goal management tool that is popular in Silicon Valley
Are there some employees in your team who are always busy, but they somehow still fail to achieve your goals?
Your business is developing rapidly, but somehow, your team members still are not performing and the business is remaining stagnant.
Many companies I have worked with experience these problems when they grow rapidly. Despite being constantly busy, their employees are not achieving their targets, not producing results, and not productively contributing to the business.
However, through the application of OKR, those employees who lack accountability and proactiveness can become diligent and more efficient. The longer they use OKR, the more results they get.
You may be curious, what magic power does OKR have that can change an employee’s working attitude and efficiency so quickly?
OKR means Objective and Key Results. The objective is what we want to achieve, and key results are how we can achieve that.
Why do more and more world-class companies like Google, LinkedIn, Huawei, and Netflix use OKR? What are the benefits of using it? After coaching clients in different countries and industries to use OKR, I found that OKR has three benefits to help your company achieve its goals quickly and effectively.
Benefit No. 1: Transform your team from “task-driven” to "value-driven"
Have you ever seen a team that works hard but gets minimal results?
I once coached a client, and the accuracy rate of their audit department remained at 80% for a long time. The department tried many methods to improve it, and the employees are working hard, but unfortunately, no matter how hard they work, the accuracy rate cannot be improved.
With this in mind, the company’s management hopes to use OKR to improve this situation.
The audit department had a significant discovery when they were drafting their objective and key results. By using the critical thinking framework in OKR, they noticed, in the past, they focused on calculating the number of SOP violations, which was an item on their task list, but they soon realized that the number did not matter at all.
The role of OKR is to transform your team from “task-driven” to “value-driven.”
If your employee has a “task-driven” mindset, they will always hurry to complete their tasks. Their ultimate purpose of working for the company is to simply complete tasks without thinking to create any value for the company and customers.
If they have a “value-driven” mindset, your team will think: Can this work create value for your customers or your company? If not, what is the work that has real value?
With the value-driven mindset, the audit department began to focus on finding the specific SOP violations which led to severe business loss and work on overcoming them.
To their surprise, one month after using the OKR method, the accuracy rate of the audit department increased from 80% to 99.1%. Previously, the 99.1% accuracy rate was a goal that the team felt was impossible to achieve.
Benefit No. 2: OKR creates an ongoing self-disciplined system for your team
Do your employees often complain to you that plans change faster than they can keep up with? They use this as an excuse as to why they cannot complete the plan. According to my observations, when working with many customers, most companies cannot achieve their goals not because they do not have goals, but because they set goals and forget about them.
For one of my clients, the IT department is the busiest among all the departments in their company. Every day, the IT department has to deal with many ad-hoc and urgent needs from other departments.
Over time, the IT department has more and more unfulfilled goals. Their internal processes have become more and more complicated, and this seriously affects their operational efficiency.
To get out of the dilemma of “fire fighting” all day long, I coached the IT department to use OKR to set the objective (O) and key results (KR) to be completed in the next four months.
After four months of OKR implementation, they have completed 3 SOPs and 1 quality manual to improve their internal process, which had been delayed for a year. The achievement of this goal dramatically increases the sense of accomplishment among team members.
How did the IT department manage to achieve this?
When the OKR was implemented in the first month, the IT department was still very busy with other departments’ work.
To change this situation, I had a meeting with the IT department. I explained to them how to build an ongoing OKR self-discipline system, including how to conduct the OKR check-in meetings efficiently and how to conduct the OKR rest and reflect meetings to control the process of achieving the goal.
As a result, the IT department began to reinforce the self-discipline system. They decided to have the weekly check-in meeting every Friday. The meeting reviewed what drove the key results during the past week and identified the gap between the current status and key result. At the same time, they quickly fixed things that did not work and firmed up the action plan for the coming week.
OKR helped the IT department establish an ongoing self-discipline system for achieving goals.
Benefit No. 3: OKR allows the team to transit from “I do it for you" to "I do it for myself."
How to motivate employees intrinsically is a challenge that many leaders want to achieve.
One of the clients I worked with also had such a challenge.
The fierce competition in the industry threatened this company. Therefore, the management wanted to have a breakthrough in business growth to maintain its industry-leading position. With this expectation, the company decided to let the sales team use OKR to bring their performance to the next level.
Four months after the sales department used OKR, the team’s morale was greatly improved, and the sales performance also achieved an average increase of 33%. There was even a month when performance increased by 188%!
Behind these fantastic sales, the improvement is the change in managing the team, brought by OKR.
In the past, the sales team’s goal has always been set by the sales director alone. After using OKR, I guided the sales director and the team through meetings to collectively set ambitious goals for the next quarter.
In the collective goal-setting meeting, the sales director had the opportunity to listen to the real needs of their customers from frontline employees and communicate with the team in-depth about the company’s strategic plans and goals for the next five years.
How can changing the way of goal setting significantly stimulate an employee’s motivation?
In the past, when using a top-down or one-way goal-setting approach, the company’s top-level goals were broken down to employees.
To employees, those goals are not attractive goals but just disjointed pieces of meaningless tasks. That’s why they are not motivated to complete them.
Your employees do not want to see themselves as a robot who just mindlessly completes tasks one after another. To your employees, work is not just a means for them to make a living.
They will appreciate it if you provide them with opportunities to grow. They are curious and passionate about the world, so they hope to achieve a dual purpose when working with your company. They want to achieve the company’s set goals, but beyond that, they also want to find other ways to contribute to the company’s greater success.
When the company changes the “top-down goal setting” to “team-based collective goal setting”, it guides the employees to see the connection between corporate goals and individual goals. So the employees change their mindset from “I do it for you” to “I do it for myself”. By conquering these ambitious goals, the team’s sense of growth is satisfied.
Leading a team to achieve goals efficiently and continuously is a major challenge that every manager must overcome throughout their career.
When your team is small, you can shout out, “Let me handle that,” if your employees are incompetent.
When you have a large team, even if you want to help, you can’t take over everything and become a babysitter.
As a proven and workable goal management process, OKR helps your team continue to achieve your company goals efficiently and quickly through a value-driven mindset and ongoing self-discipline.