Currently, many businesses try to build OKRs to manage their operations. This OKR principle helps the whole company to follow the ultimate goal in a rhythmic and coherent way. As a result, businesses will develop and improve work efficiency most effectively. Read the following article from Viindoo to learn more about OKR.
Principles when enterprise build OKRs
Building OKR can bring great benefits to your business. However, business owners need to keep in mind many principles to effectively implement OKRs. In particular, the process of building OKRs will consist of two main parts of the objectives and the results. For successful application, Viindoo will introduce to you the following key principles that you might want to follow.
4 general principles
When building OKR, businesses need to pay attention to the top 4 general principles. These will be the basic things that help this method to achieve its goals and results. Specifically, the principles that businesses need to pay attention to are:
- Ambition: The goal set by the business needs to be higher than their capacity.
- Measurability: Businesses need to analyze and measure important results.
- Transparency: All leaders, managers and employees must follow and understand the OKR process.
- Performance: Enterprises do not use OKRs to evaluate employee performance. The ultimate purpose of applying OKR is to evaluate the final outcome of business operation.
Businesses need to measure key results
>>>> For More Details: What is OKR? Steps to implement OKRs for businesses
For Objectives
OKR is the goal-setting and goal management framework that is currently used by many businesses. Thanks to this principle, many companies have succeeded in employee orientation and management. Specifically, some principles that businesses need to keep in mind when using OKRs to build goals are:
- Specific departments or individuals in the business should have 3 to 5 goals.
- Businesses need to define clear goals. For example, the company is planning to "expand products to Singapore" instead of "expand products to East Asian countries".
- Businesses need to set goals beyond their ability. This helps employees to be more motivated to work. For example: The company's sales in the first quarter were 60%. Businesses should set the Objective for next quarter's sales to be 80%.
Businesses need to measure key results
>>>> Learn More: Difference Between OKRs and KPIs? Which indicator should be used?
For Key Results
Besides goals, OKRs are also used to evaluate results. However, businesses need to pay more attention to the principles when building Key Results. This will help the company to analyze the data accurately and efficiently.
- Businesses need to create measurable key results. Example: The company needs to “contact 10 technology partners” instead of “developing relationships with businesses”.
- Key Result is used to measure the small stages of achieving the final goal. Therefore, businesses need to focus on results rather than goals.
- Key Result should be clearly described by end products instead of normal operations. Businesses should set out to "Submit sales reports" instead of "Analysis of sales performance".
Key Result should be clearly describe
>>>> Read More: What Is A Key Result? Examples of Effective Key Results
Build Effective quarterly OKRs for businesses
How to build OKR effectively? Key Results and Objectives are two key factors that help businesses connect internally. However, management needs to pay attention to the timing and development steps. Let's find out how do businesses set OKRs with Viindoo.
Time to build OKR
On average, a business should not build a cycle of OKRs for more than 30 days. Specifically, each company needs to set the OKR period between the 15th of the last month of the quarter and the 15th of the first month of the next quarter. Businesses should avoid ending OKRs on the last day of the previous quarter. This will be difficult to do because the data is not fully aggregated.
Businesses should avoid ending OKRs on the last day of the quarter
Currently, quite a lot of businesses are concerned about wasting time when they have to build OKR quarterly. However, focusing on OKRs will bring very positive and effective results. Enterprises need to carry out normal activities and work in the process of implementing OKRs. Once familiar with this model, the company will not need to spend too much time on this.
Steps to build OKRs
OKRs requires a business to go through several stages. Specifically, the complete OKR model requires 10 steps. Enterprises need to focus and pay more attention to each stage for the construction to be effective. Learn more about these 10 steps.
Step 1: Collect and synthesize target ideas
Managers will create the overall goals of the business. However, each employee has a different perspective. This makes it easy for the whole company to misunderstand the common goal. In particular, employees and leaders do not always have the same views and perspectives.
Businesses need to collect ideas from the whole company
Therefore, in step 1, businesses need to synthesize all employees’ ideas about the common goal. This will bring great value to the whole organization. At the same time, businesses also have the opportunity to absorb good suggestions or ideas for the company. However, before implementing, the management needs to clearly state the desire and goal for staff.
Step 2: Select and announce business goals
When fully synthesizing ideas, managers need to discuss carefully to choose important goals. Enterprises should also pay attention to and prioritize the recommendations of the management. These are people with extensive vision and expertise.
If exploiting the overall picture is still difficult, businesses can use BSC (Balanced Scorecard) or canvas model. These are two effective tools to help the company clearly shape its strategy and management plan.
Board of Directors announces important goals
When building OKRs, businesses need to pay attention to important goals in the next quarter. After the selection, the leadership should clarify the Objectives and inspire all employees. In particular, businesses should let employees know the reason and meaning of these goals. Note, when completing the selection of Objectives, the director needs to specify OKRs of the goals.
Step 3: Employees build draft for personal OKR
After announcing the common goal, the enterprise needs to deploy for each employee to set their OKRs. In particular, employees should not copy or refer to a colleague's OKR.
Employees begin to build personal OKRs
When all employees have built Personal OKRs, departments need to coordinate separate meetings for each person to present. As a result, businesses will better understand the perspective of each employee. The department head will synthesize ideas of OKRs. However, at this stage the company has not yet finished building their OKRs. Management needs to consult and add details to have the most overall OKR.
Step 4: Managers arrange meetings to discuss and improve personal OKRs
In step 4, department heads will meet 1:1 to present and compare with other team leaders. All will discuss and support each other to create a complete OKR. Viindoo will give an example of this meeting.
Marketing team leader has OKRs to gain 2000 customers from Facebook channel. The budget for this goal is VND 200,000,000. The head of Marketing needs to talk to the Finance department. If this OKR is approved, the Finance department will support the result as “Provide VND 200,000,000 to Marketing Department”.
Team leaders’ meeting to reach a final say in OKRs
However, this kind of meeting is not always successful. Each department needs to consider capabilities and priorities to support other departments. If negotiations are unsuccessful, the requests will be reviewed next quarter.
Step 5: The director sets up and creates his OKR
In this step, the leadership will have a 1:1 meeting and general meeting with departments to listen to their OKRs. This phase will be similar to step 3. Once enough OKRs have been collected, management will leverage the metrics to complete their own OKRs and build it for the entire business. Step 5 requires the director to have deep vision and calculation to create OKRs in accordance with the company's financial resources.
Director collects comments and completes ORK
Step 6: Leader produces official OKR
After having built OKRs for businesses, the director will have a 1:1 meeting with team leaders to adjust. If nothing goes wrong, the department head can keep the OKR. In contrast, incomplete OKR templates will need to change some of the goals.
In addition, representatives of each department will also meet to discuss cross-linking. This process will take place continuously to ensure consistency. For example, the head of Marketing will notify HR if additional employees are needed. Both parties will agree to include new hires in OKR's Key Result.
Head of department writes the most comprehensive OKR after the meeting
Step 7: Employees write official OKRs
Once the OKR adjustment process has been completed according to the director and other departments, each department head will announce the completed OKR. This helps employees define standards and better understand the purpose of OKRs for their department.
After that, the staff in the team will continuously adjust the OKR set until it is perfect. Specifically, each individual will directly participate in a 1:1 meeting with the team leader. This helps to create links and clarify the original information.
Similar to the process in step 6, employees will need to change and edit the OKR set after the meeting. If there are too many problems, each individual needs to redo a new ORK. This will help OKRs align with the orientation of each department and business.
People write editing meetings and write official OKRs
Step 8: Check cross-linking in the business
Building cross-links between OKRs is not easy. If a department is left out, the final goals will not be unified. This leads to inefficiency and lack of coherence. Therefore, businesses should use the link form below to ensure that all departments are fully involved.
Meeting departments to check cross-linking
Step 9: Check the quality of OKRs
A complete set of OKRs requires the input of many individuals. Therefore, when you have created your own OKR, each employee or manager needs to present it to the collective. This helps to ensure objectivity when evaluating. As a result, the bad OKRs will be rewritten to meet the requirements. Businesses should refer to the following criteria to check the quality of OKRs:
- Businesses should use a scale of 1 to 5 to grade OKRs.
- Enterprises need to rate the degree of alignment of the OKRs of each department on a scale of 1-5.
Enterprises need to evaluate and check quality OKR
OKRs that do not meet the above 2 criteria or have a score below 4 need to be revised. Besides, the company can also use OKRs management software. This tool will help businesses correct deficiencies or create certain guidelines for people to follow.
Step 10: Announce Quarterly OKRs
After adjusting OKRs, businesses need to make them public to all employees. The board of directors should use the same Google sheet file to publish or print OKRs and have them around the work area. Make sure all departments, divisions and employees see OKRs. In particular, readers should note a few things as follows:
- Businesses need to disclose to everyone the schedule for creating OKRs.
- Employees, departments and management need to follow the timetable.
- For quality OKRs, businesses need to choose OKRs Master to improve construction performance.
- Before the deadline, all businesses need to resubmit their OKRs.
Enterprises announce their OKRs for the quarter
Step 11: Monitor and evaluate
Businesses often invest in and set the best goals for OKRs. At the same time, the company also spends a lot of time and effort to build OKRs. However, some businesses, after building a set of OKRs, have not yet applied this process to work, leading to forgetting OKRs.
To avoid wasting resources, businesses need to evaluate and monitor closely. Management can review individual or departmental OKRs in 1:1 meetings. This helps to receive comments from departments to edit and supplement the most reasonable OKRs.
OKRs need to be monitored and evaluated regularly
Common mistakes when building OKRs
After learning how to build OKRs, every business needs to implement it properly to create high efficiency. At the same time, management should note some common mistakes when creating OKRs. If one of the following is committed, OKRs will have a hard time moving in the right direction.
Failing to clarify the objective
Businesses need to clarify current goals. When an employee proposes to increase the value of the product. Management needs to find out what values need to be enhanced. At the same time, what is the “product” here? The clear definition will help the business to go in the right direction and create high efficiency in work.
Businesses should focus on big goals
Giving out wrong description
Businesses often use phrases indicating status. Activities such as “continue driving sales” or “maintain purchases” or “continue to improve hiring practices.” can be confusing for employees. This makes it difficult for businesses to control and measure the quality of OKRs.
Using OKRs as a to-do list
When looking for how to build OKRs, businesses should note that OKRs are to measure and calculate specific goals and ensure OKR principles. Using OKRs to do small, everyday tasks won't work.
OKRs should be used for big goals
Building too many OKRs
Too many OKRs is the cause of not making the goal clear. Businesses need to pay attention to list the top goals instead of the small factors. Specifically, the company should only include important and key content. This helps employees remember key goals and focus on work.
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Building OKRs helps businesses achieve specific goals and results. Hence, The company insiders will better understand the long-term factors that the management is aiming for. At the same time, administration also becomes easy and efficient. Viindoo hopes the above article will help businesses have the right way to build OKRs and limit many risks.
