Objectives and Key Results: En guide för att definiera KR i OKR. Så här definierar du KR i OKR
27 Feb, 2019
Have you started using OKR yet?
If so, you're in good company - companies like Amazon, Deloitte, Google, Intel, Zalando, Spotify, Microsoft and Netflix all use OKR. If OKR works for the best companies in the world, they should work for you too. The key is to use them properly. Or rather, both put them and measure them correctly. We thought about briefly telling you how to set goals and measure results correctly.
What are Objectives and Key Results (OKR)?
First, let's address the basics: what are Objectives and Key Results (OKR)? After all, it will be difficult to manage your OKRs if you do not know what it is. OKR has started to become an increasingly common management technology that was initially developed by Intel. It is a management system for setting goals, communicating goals and following up quarterly goals and results. They hierarchically link a company, one and goals with measurable results.
OKR consists of three parts:
- O - Objective (Objective)
- KR - measurable results (Key Results)
- i - initiative, ie, things to be done
A goal (O) is a description of something to be completed in the future, a clear direction and motivation. The goal is often visionary. A Key Result (KR) is a metric with a starting value and target value to measure progress towards the goal. An initiative is a description of the work a team does to influence Key Results, KR. As you said, you will not always meet initiatives, so OKR only consists of paragraphs 1 and 2. It is not always a good idea however. You will find out more about why further down in the text.
Types of Key Results
With the above in mind, let's take a closer look at Key Results. There are many ways to determine Key Results, but they can generally be divided into two types
As you probably guess, the biggest difference is how it is measured.
Activity-based Key Results measure the completion of tasks or activities in terms of project-based approaches. This is a fairly simple type of Key Results and it is quite easy to measure. Examples of activity-based Key Results include such as:
- Start a new product page
- Develop and launch a new staff training program
- Develop a new landing page for the web
- Create a new leads campaign
- Release a beta version of a product
Don't be fooled by the fact that activity-based Key Results are simple. Just because they are easy to measure does not mean that they are the right choice for you - or that they measure what you need.
Value-based Key Results are those that measure the delivery of value to customers or to an organization. These outcomes are often more qualitative than activity-based Key Results, but they can be more comprehensive, as they measure the outcome of successful activities. Examples of value-based Key Results are:
- Increased prospect customer conversion from A to B
- Reduce customer acquisition cost from Y to X
- Achieve an E% conversion rate from free to paying users
As you can see, value-based Key Results can be a little trickier to measure than activity-based results, because you have to measure your relative degree of success. But at the same time, they can be very informative, as they give you numbers to measure success (rather than just a list of tasks accomplished).
How Key Results fit into your plan ahead
How does Google succeed with OKR ? Simple: High goals and measurable Key Results. When we say "loud", we mean really loud. Google wants their employees to reach the stars, so they set goals that are tangible to what is possible at all.
One of the pioneers of OKRs , Andy Grove, said that you should set goals this way and think of 70% as the new 100% - in other words, if you reach 70% of your goal, it's as good as reaching 100 %. So it's time to make it a little tougher. Of course, the key to achieving your goals is also knowing how to measure progress. This is where your Key Results come in.
Here's how to define Key Results in OKR
Define what is to be measured
First, you need to define your metric for your Key Results. The important thing is to determine something that can actually be measured. For example, it's not a good idea to say that you want to increase employee engagement unless you have no way to measure engagement. Usually, you should set three to a maximum of five Key Results for each O which in turn should not exceed three to five in number.
The best way to find out if a potential Key Result is measurable or not is to ask if you can set a starting value and a target value. These are central to the whole concept of Key Results, and they are the ones that measure your success. If you cannot determine these values, you may not have something that you can measure.
No measurement = No results and then it is not OKR.
Let's be clear: you need something you can measure. It is not enough to make large-scale statements about success. Anyone can make sweeping generalizations and then convince themselves that they are making progress. Do you want a team of hamsters (a lot of effort without getting anywhere) or do you want a team that actually performs
If you answered yes to the latter, you need measurable results. For this purpose, you should therefore always strive to write down and measure Key Results which are value-based rather than activity-based.
Set a scale to measure progress
Part of this process is setting the right scale to measure your progress toward a goal. Fortunately, Key Results has a scale built into them: the starting value and the target value. You should set your values in the same way as your goals. They should be almost impossible to reach but still allow you to reach 70% if your team really works for it.
The starting value is simple - this is where you start. The target value should be set with this almost impossible standard in mind. You can also set intermediate goals on a timeline towards your higher goal so that your team has a clearer knowledge of which benchmarks they should hit on the road.
How NOT to Measure Key Results
If it sounds good this far, then that's a good start. If you are still uncertain about the concept, it may be good to look at the opposite - that is, how you do not measure Key Results .
Fortunately (or unfortunately), companies tend to make the same mistake when it comes to their OKRs and how they measure their Key Results. The risk is that you will run into the same traps as others. On the one hand, it would be good not to make the same mistake as everyone else. On the other hand, it's easy to learn from your own and others' mistakes. Here are some ways you should definitely not manage your Key Results.
Only measurement values
Measuring points, KPIs or Metrics are a company's best friend. They are cold, hard numbers and an easily understandable scale to control your outcome. Sure, metrics have their uses. But your OKRs will become short-lived if you depend only on metrics to measure your success.
Data, especially in OKR, is only useful if you can use it to measure your team's performance. But you want a more thorough set of data, not just a sheet of numbers.
For example, it is more useful for you to know how many house inspections an employee has done in one day than how many houses passed the inspection. One figure is a dead end, while the other tells something about the employee's productivity.
KPIs, KPIs and more KPIs
Another common mistake
Logic says if something can be measured then it should be measured. But just because you can measure a table leg doesn't mean you should measure a table leg. If you do not get something useful from the outside to measure that leg, it is a waste of your time.
The same applies to all business measurements. You should worry less about the number of metrics than about the quality of the metrics. In other words, does this measurement point actually tell you something about the quality and efficiency of the work that your employees do?
If the answer is no, you probably don't need the measuring point.
Good measuring points Now = Good measuring points later?
Metrics are an ugly trap to fall into, and they can get you lost if you're not careful. An example of this is the erroneous assumption that a good measurement is now translated into a good measurement at a later time.
OKR is not about reaching a goal and then resting on its bearings. The foundation for OKR is to continue to address problems and priorities as they arise - and believe us they will emerge and develop. Once you have found a good measuring point, there is a possibility that it can be improved, so take the time to change and update how you measure your progress.
To let the numbers speak for themselves
You didn't think we were ready with measuring points?
Här är grejen: mätvärden är någonting ganska oformligt. Det är lätt att greppa siffror och presentera dem för din chef triumferande som just det - siffror. Du borde inte förlita dig på att siffror berättar hela historien, för det är baserat på ett felaktigt antagande om vad siffror egentligen är. Siffror är inte något i sig själv som gör att allt faller på plats, utan snarare ett spår av brödsmulor genom skogen (du vet.. Hans och Greta).
Ingen siffra kommer att berätta allt du behöver veta om din medarbetares produktivitet eller dina framsteg mot dina mål, men rätt sammanställning av siffror kan hjälpa dig i rätt riktning.
Tilldela fel värderingar till dina mätningar
När det gäller siffror är det lätt att falla för frestelsen att göra enkla omdömen kring mätningar.
For example, let's say you want your sales team to make at least five extra phone calls over an hour. When they reach the new goal it is easy to make an assessment of their performance as a good outcome. But the outcome does not give you a complete picture. They make five more calls, but that does not mean that the quality of these phone calls is good - it can actually be much worse than it was when they made five calls less.
The key here is context. A number without a proper context will not tell you anything - you must have the whole story in order for the metric to make any sense.
Mix Key Results with Initiative
Another common mistake is to mix up Key Results with initiatives. We said earlier that Key Results are your measurable progress towards a goal, while initiatives describe what you do to achieve them.
On the surface it sounds like almost the same thing. However, there is one important difference: initiative is your plan of action to achieve goals, while Key Results measure your progress to get there. The mistake is that you believe that Key Results are tasks. Key Results are no data at all. It is the initiatives that are the tasks. Key Results measure your results based on your progress with your initiatives.
Making Key Results a "To Do List"
This is our final critical mistake: making their Key Results a to-do list. On the one hand, a to-do list, or to-do list, seems like a good way to measure progress, because you can tick off the tasks as you go along. But again, this is based on a fundamental misunderstanding of what Key Results is.
Key Results are not tasks. Key Results measure the results of your data at a qualitative level. Think about it like this: you can measure Key Results and thus see if you are in goal, but it is actually possible to complete all your initiatives without making any progress towards your goal.
The whole point is to steer your company towards a results-oriented culture, not a task-oriented one.
Once you have learned how to measure Key Results as progress rather than completing the tasks, you are heading in the right direction.
We help you put your OKRs
Are you ready to put your OKR ?
If you measure your Key Results correctly, you are rigged for success. However, if you still find it a little unclear, we will be happy to help. We offer OKR management for companies in rapid change, so your team can work together towards your goals.
If you want to see what we can offer, click here to check out our pricing, or take a chance and book a demo today. We are happy to show you more of what we can help you with.
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