The agile strategy and planning framework “Objective and Key Results” (OKR) focuses very strongly on the measurable achievement of predefined goals. The measurability is achieved by 3-4 key results, each of is assigned to an objective.
However, as simple as the process may seem at first, it is also easy for critical errors to creep into the implementation, which can lead to a dysfunctional setup. Particularly when defining good key results, i.e. measurement criteria, teams often fail, give away a lot of the punch of the OKR and, ultimately, often also motivation due to the long-term use of the working method.
This series is about what you should pay attention to when defining good key results, what the stumbling blocks are and which key results you should avoid. Answers are given by “The Good, the Bad and the Ugly” with examples and recommendations. The series starts with the “Good”-Key Results to better understand the anti pattern “The Bad” and “The Ugly”!
1. Gradually measurable and changeable values
A good key result in the OKR model works best if you use measurable and changeable numerical values in (fine) steps. Examples are:
- Percentage change: Increase of conversation rate by 5% to initial value
- Reaching number X of Y: 90 out of 100 customers bought this product
- Increase/reduction from value X to Y: Reduction of the churn rate from 6% to 4%.
During the implementation period (e.g. one quarter), the implementing teams can continuously measure the current status and make the progress continuously visible in a diagram or suitable tool.
This allows you to recognize right from the start and measure whether implemented measures are effective, whether you are on the right track and how far you still have to go to reach your goal.
2. Directly influenced by the team / implementer
Key results must always be related to the daily business of the implementers. The implementers, on the other hand, should always have a “lever” with which they can adjust the values directly and as quickly as possible through appropriate measures.
It is therefore advisable to use the direct and already existing key figures of your own product, such as conversion rate, churn rate etc. A product team, for example, should know these and be able to control them through implemented features or optimization measures on the product.
Key results, which are directly influenced and best owned by the implementer, motivate and promote autonomy and creative implementation in the OKR model.
3. Key Results defined by the team / implementer himself
In addition to the direct influence of the implementers, it is at least as important that the key results (“what”) and the value to be achieved (“how”) are defined by the implementer himself in the definition process.
Colleagues, stakeholders or management may/should/can critically question them. Key results that have been defined externally or that have been given and assigned top down are the death of every OKR implementation!
The correct definition of Key Results is a learning and calibration process and takes time. An essential part that contributes to the success of the framework, however, lies in the independent definition of the Key Results.
4. “Shoot for the moon Key Results” – 70% are 100%
If, for example, goals were defined in the MbO with a maximum degree of goal achievement of 100%, which was often never achieved in reality, the OKR model recommends “Shoot for the moon” goals. So goals, that (clearly) should go beyond what is normally feasible!
The idea behind it is to release creativity and energy in the organization to work on making the impossible feasible. This does not refer decidedly to reach the goal by extra work and overtime, but evenly by innovation and “Think out of the box”.
They stimulate therefore the implementers and teams to be courageous and to look far over the edge of plate and to set the old 100% mark with 70% of the OKR target achievement. At the same time, however, ask your management to take this approach too seriously and never regard 70% target achievement as a “failure”.
It is important that the management say goodbye to individual annual targets or the combination of OKR with individual bonus payments. Otherwise it will be difficult to animate implementers to “Shoot for the moon”!
5. Key figures within the value chain
To know the value chain of your product and the individual steps and to understand and control them by means of key figures is generally a good prerequisite for successfully advancing a product.
If you already collect key figures within your value chain, you should use them directly as a basis for your key results. Otherwise you will find out exactly these key figures first (together with your team).
Key results, which are directly related to the value chain, will advance your product, motivate all participants and make successful goal achievement an authentic celebration.
If you want to use “Objectives and Key Results” optimally you should pay special attention to a good definition of your key results. Nothing is worse than to measure wrong numbers, to collect values in which nobody believes or which you cannot influence yourself.
Instead, give the definition of the key results and the target values to be achieved to your teams, who know best what they can measure and how and which levers they have for optimization. Pay attention to a graded measurability and parameters directly related to your product.
Finally, be courageous and encourage your teams to go beyond the “normal goal”. Respect this courage and eliminate anything that can indirectly or directly prevent it (e.g. individual bonus targets and MbO).
Beyond that: Contact me and let me answer your questions about an optimal definition of Key Results!