If you are a business owner, chances are good that you have heard all about OKRs – or Objectives and Key Results – and the potential that they carry when it comes to taking a company to the next level of success.
Essentially, OKRs are a way for business owners to organize and focus their entire team towards a clear goal. Without a doubt, one of the important skills that a leader can possess is the ability to align their entire team to join in on the big vision of the firm.
If you have struggled in the past to find a way to align your company in that way – as well as keep track of how well everyone continues to adhere to the goals that you and your management team has established – then there is no doubt that OKRs could be right for you.
However, there are some crucial things that you will want to know about OKRs before you decide to invest a lot of time and energy when it comes to applying the principal to your company. For that reason, we at Profit have broken down what every business owner should know about OKRs.
Let’s get started!
First off, let’s go over precisely what OKRs are. Essentially, the Objectives refers to the long-term goals of your company. It can apply to anything related to your company, such as growth, customer service, production, services and much more.
For example, one Objective could be: We want to have our new site fully operational by Q2. Another could be: We want to open three new storefronts over the next 18 months.
From there, you create your Key Results that will help serve as measure sticks that you can refer to when you want to make sure that you are staying on the right track towards your Objectives. It is crucial that Key Results are objective and measurable so that there can be no confusion regarding how far along you and your team is to achieve the ultimate goals.
The Objectives you create and the Key Results you decide to use to measure your progress is a crucial way to help you focus specifically on where you want your company to go and how you plan to get there.
Get rid of the guesswork
Another great thing to know about this method is that it allows you to strengthen your leadership ability. Of course, this approach to moving your company forward will not make up for a complete lack of leadership skills, but they can be used to seriously strengthen your fundamental leadership ability and can be used as a guide for you and your company.
Use it as a life raft
There is no doubt that OKRs have been used by massive companies such as Adobe and Google, but they are possibly even more impactful for smaller companies that are still looking for a way to break out from the rest of the pack.
For example, companies in the technology sector have to find ways to grow fast before they lose the money that they have received from early investors. Having a structured way to measure progress and reach goals will allow you as a leader to save crucial time.
OKRs can also be incredibly useful for medium-sized companies that all of a sudden find themselves experiencing something of a boom and rapid growth. When a medium-sized company starts to make money like a much larger competitor, the company itself can risk collapsing under its own success.
They can be used to help you answer crucial and timely questions when it comes to how to best use your new reach and success to continue growth.
Finally, for larger companies, OKRs can be a great way for different levels of management to make sure that they are aligned. Big companies can often feel like a huge ship, making changes slowly. OKRs can help speed things up as everyone aligns under clear benchmarks.
Quality over quantity is crucial
One really important thing to know about OKRs is that it is going to force you to focus specifically on a smaller number of goals. It is true that they work best if you have just a couple Objectives.
In fact, it is advised that no company ever has more than seven Objectives at one time. It is generally agreed that the ideal number is between three and five.
The reason why quantity should not be valued over quality when it comes to Objectives is because a large number can distract people by asking them to focus on too many things at once.
OKRs level out the hierarchy of your company
In the modern company, it is really valuable and important for business owners to make sure that everyone feels involved and a sense of ownership over the firm. Gone are the days of the tyrant owner and boss ordering everyone around.
OKRs play a great role in allowing you to avoid becoming that kind of leader because they will serve as an objective meter for how well everyone is doing. Beyond that, the fact that everyone from the bottom up is involved and aware of OKRs will certainly lead to a flatter feeling company in terms of hierarchy. That can improve company culture and morale going forward.
OKRs allow you to set ambitious goals
One final thing that every business owner should know about OKRs is that they allow you and everyone at your firm to think big and set ambitious goals. Ultimately, that is what OKRs are all about – allowing a business owner and his or her company to break out of the day-to-day and take a step back to look at the big picture.
Where do you want your company to go? What do you want it to look like? How do you want it to feel? What truly is the limit of your success?
If you are looking for a way to answer those questions, then implementing OKRs may be perfect for you.