"We start our journey to our dreams by wanting," Christina Wodtke writes in her book, Radical Focus, "but we arrive by focusing, planning, and learning." 1 At sophilabs we understand that big dreams must be met with an equally big focus on creating specific goals, establishing a clear method of measuring progress, and being willing to see mistakes as opportunities to grow. We've adopted OKRs as a way to achieve ambitious goals while engaging, aligning, and motivating our team.
What are OKRs?
OKRs stands for Objectives and Key Results. OKRs make up a goal-setting system that establishes qualitative goals (objectives) that must be met by fulfilling one or more specific quantitative requirements (key results). 2
For example, a company's objective might be to increase the presence of their brand in the public eye. One of their key results, then, could be to acquire 80% more social media followers. Note that the objective is qualitative, while the key result is quantitative and therefore measurable. When key results are clearly measurable, there can be no question as to whether or not they've been met. This, in turn, allows for a non-biased assessment of whether the objective has been fulfilled, since objectives are reached by meeting all of the key results.
While many companies have struggled to hit their targets due to a lack of communication or prioritization of their goals, OKRs work to solve these issues on every level. OKRs build teamwork, transparency, and a shared vision across the company. OKRs are part of a growing field in management methodology and have contributed to the success of start-ups and tech giants alike. Implementing OKRs at sophilabs helps us aim high and reach our full potential in delivering high-quality, client-focused services.
How It Works: Creating Effective OKRs
Putting OKRs into action doesn't simply mean having management come up with shiny new goals. Both objectives and key results must be collaboratively built and effectively communicated with the team. In the following sections, we'll walk through the best practices for setting, communicating, and reflecting on OKRs. We'll also take a look at how we achieve that here at sophilabs.
The OKR cycle consists of three main phases: goal-setting, doing the work, and finally, assessment and reflection. OKRs can be adjusted (or even scrapped) at any point in the cycle in order to adapt once results start coming in. 3
Most experts recommend setting OKRs on a quarterly or other short-term basis to best prioritize objectives and maximize the team's focus. 4 Setting only annual goals can result in the team losing sight of what they're working towards. In addition, an annual cadence provides too long a period for truly effective feedback and self-reflection, which are crucial to improving performance. Here at sophilabs we've adopted a quarterly cadence that is compatible with the way we work and functions in tandem with our continuous improvement feedback cycle. We primarily use OKRs on the team management level and higher, as Scrum methodology already provides a strong basis for goal-setting and alignment within our development teams.
Who Sets OKRs
There are two primary approaches to setting OKRs: top-down or bottom-up. In a top-down or cascading approach, upper management comes up with OKRs for the entire company. Each department derives their OKRs from these top-line goals, then each team develops their own OKRs based on the departmental ones, and lastly, individual employees derive their personal OKRs from their team's goals.
The biggest plus-side of the cascading approach is complete alignment; everyone is on the same page about where the company is headed. The most significant downside, however, is that a top-down approach robs team members of intrinsic motivation. Why would individual team members feel committed to objectives they had no real say in? In addition, a top-down approach marginalizes the valuable knowledge of those working on the ground; objectives and key results often look different when those lower on the ladder have a say. 5
A bottom-up approach, then, creates OKRs based on input from the team. This is essential to creating fully informed OKRs and getting a buy-in on OKRs from all team members. OKR champion John Doerr recommends using cloud-based OKR management software so that everyone's OKRs are visible to everyone else, from entry-level employees to top executives. Not only does this achieve complete transparency of the company's goals, but it gives everyone a chance to provide feedback and suggestions, saves time and effort communicating OKRs with the team, and promotes collaboration across teams and departments. 6
An ideal OKR cycle includes a mixture of bottom-up and top-down goals. Experts recommend a roughly fifty-fifty balance, though on an individual level team members should be able to develop most of their own key results. 7
Company leaders are key to implementing OKRs effectively. They communicate when team members need to provide input to create new OKRs. They play a crucial role in helping their team members see the connection between department, team, or individual OKRs and the company's mission and values. They also model how to set personal OKRs and self-assess their performance during the last OKR cycle. 8
At sophilabs, we apply both a top-down and bottom-up approach when setting OKRs for each cycle. We keep our OKRs transparent and communicate with each other about setting goals that will inspire us to do our best work. We use the Your Objectives tool on Small Improvements to set OKRs that are visible to everyone in the company. We selected this tool because it's lightweight and easy to use. It's part of the same platform we use to give and receive feedback, so it further ties team goals to our effort to continuously improve on every level. In addition, our leaders model best practice for setting OKRs, adapting goals when necessary, and reflecting on how to improve their results during the next OKR cycle.
When coming up with objectives, being selective is crucial. Setting too many goals overextends the team and distracts from what is truly important to achieve during that cycle. Writing effective objectives means prioritizing. Managers and teams must determine what is urgent and what can be deferred to the next cycle.
Objectives are an opportunity to aim high. Every objective should be a true challenge; if the team or individual is certain they can meet the objective, it's too easy. In addition to the objectives the team is committed to reach during the given time frame, each OKR cycle should include one or two stretch goals, aspirations that seem incredibly daunting but energize the team to go above and beyond what they think is possible. This balance between committed and aspirational goals is critical; aspirational goals push teams to work hard and innovate while committed goals give teams the concrete sense of progress that keeps individuals motivated and morale high. 9
Writing Key Results
The fundamental thing to remember is that key results must be measurable. In other words, they should include numbers that allow teams to gauge their progress and objectively determine when each key result has been met.
Like objectives, key results must be something teams and individuals have to strive to reach. If the key result can be met without much strenuous effort, the bar isn't high enough. Achieving all the key results must complete the objective; if it doesn't, it's not an OKR. Three to five key results should be enough to fulfil an objective. If many more key results are needed, the objective probably needs fine-tuning. 10
The Positive Outcomes of Using OKRs
The advantages of OKRs–what John Doerr refers to as OKR "superpowers"–have the potential to transform a company's culture and bottom-line success. Let's take a closer look at all the areas in which OKRs have an amazing impact.
Prioritization and Focus
As we mentioned earlier, setting effective OKRs means prioritizing what matters most. Companies that center their attention on their most important goals are more likely to see real progress on their objectives. The deadline imposed by the short time frame of the OKR cycle helps keep teams' focus razor-sharp. We've found OKRs incredibly helpful in setting and sticking to priorities at sophilabs, and we contend that OKRs hold a remarkable power to help things get done.
Motivation and Engagement
When we take input from individual team members seriously while formulating new OKRs, the returns in increased employee motivation are incredible. Team members feel inspired to do their best work when they can set their own targets and have a real say in team, department, and company-wide goals. Engaged team members are more likely to look for opportunities for innovation and growth. 11 At sophilabs we believe that bottom-up OKRs make a real difference in team members' emotional commitment to goals at every level.
Alignment and Teamwork
It's easy for different teams and individuals to have disparate ideas of what reaching a target looks like. OKRs demolish ambiguities in what goal achievement means so that everyone can hold the same vision in mind. When everyone is pointing in the same direction, great things become possible. In addition, the company-wide transparency inherent to OKRs increases possibilities for collaboration across teams and departments. Sophilabs highly values the capacity of OKRs to unify our team and help us find new ways to work together.
Accountability and Tracking
The quantitative nature of key results is one of the greatest strengths of OKRs. Not only does it make it possible to track progress in an unbiased way, but it helps managers identify teams or individuals who need support as well as high-performers who should be rewarded. If progress is visible to everyone, teams are more likely to push through challenges in order to reach their commits. The goal-tracking that OKRs facilitate works hand-in-hand with the way sophilabs encourages the continuous improvement of our teams and their individual members.
Agility and Adaptability
OKRs are not set in stone, making them the ideal goal-setting framework for an ever-changing business environment. It is perfectly acceptable–encouraged, even–to adapt Os or KRs in order to match the reality of current challenges. Forcing teams to stick to goals that are no longer relevant is demotivating and unproductive. At sophilabs, OKRs give us the freedom to change course when something is not working as well as it could.
As we touched on earlier when we discussed aspirational goals, OKRs give companies the tools to chase big dreams and strive for goals that may not seem feasible. The mindset behind OKRs considers failures opportunities for learning and growth. The mere effort of reaching for these stretch goals empowers team members to take the calculated risks necessary for true innovation. We believe OKRs help us actively practice sophilabs' company values through our daily work.
Company Culture and OKRs
According to John Doerr, culture is "what makes meaning of work". 12 OKRs contribute to a culture of transparency and continual growth. In order for OKRs to work their magic, though, companies must foster an environment that doesn't punish failure so that teams feel confident enough to set truly challenging goals. It's crucial to stress that failures are data points to learn from.
OKRs function best in a company culture where team members receive regular constructive feedback and genuine praise from managers and peers alike. At sophilabs we practice a continuous improvement feedback cycle in tandem with our OKRs. This allows us to base feedback on recent, specific examples that are meaningful to the recipient. The self-reflection that occurs at the end of each OKRs cycle also supports our continuous improvement philosophy, enabling team members to identify for themselves the areas that need work and strategies for growth. At sophilabs, resources and support are always available to help team members do their best work.
OKRs provide an important link between individual growth and big picture company goals. A company's OKRs should be a reflection of its values, so it's also fundamental that all team members understand what these values are and how to apply them. We consistently communicate sophilabs' values with our team and ask our fellow team members to think about how they engage with those values through their work.
OKRs: A Path to Fulfilling Our Vision Together
In a goal-setting system that values not only achievement, but learning and growth, we're empowered to always do better with each iteration of the OKR cycle. The wisdom we glean from our experience, carefully considered due to baked-in feedback and reflection processes, informs the development of future goals. The successful application of OKRs is necessarily a collaborative process that's supported by universal cooperation and teamwork. OKRs help us reach high achievements while strengthening the synergy of our team. We look forward to the ways in which OKRs will continue to push us to grow and contribute to a bright future at sophilabs.
Christina Wodtke, Radical Focus: Achieving Your Most Important Goals with Objectives and Key Results, (San Bernardino: Self-Published, 2016), 106. ↩
Ibid., 109. Paul R. Niven and Ben Lamorte, Objectives and Key Results: Driving Focus, Alignment, and Engagement with OKRs, (Hoboken: John Wiley & Sons, 2016), 8-9. ↩
John Doerr, Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs, (New York: Portfolio/Penguin, 2018), 47. ↩
Ibid., 52. Niven and Ben Lamorte, Objectives and Key Results, 21. ↩
Wodtke, Radical Focus, 113-114, Doerr, Measure What Matters, 79-86. ↩
Ibid., 114-115. Niven and Ben Lamorte, Objectives and Key Results, 24. ↩
Doerr, Measure What Matters, 88-89. ↩
Ibid., 133-142. Wodtke, Radical Focus, 109-10. ↩
Ibid., 111-112. Doerr, Measure What Matters, 50, 54-55. ↩
Niven and Lamorte, Objectives and Key Results, 20, 24. ↩
Doerr, Measure What Matters, 212. ↩
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We are Sophilabs
A software design and development agency that helps companies build and grow products by delivering high-quality software through agile practices and perfectionist teams.