Objectives in the OKR model
Objective is one of the most important concepts in management – without objectives, change has no purpose. The pursuit of an organisation’s vision and mission gives rise to a strategy. From it, the organisation knows the direction it wants to go. The OKR objectives are derived from the strategy,. Objectives are like signposts, guides towards the big goal of the organisation.
A quick recap: what is OKR?
OKR stands for Objectives and Key Results. The model is divided into Objectives and Key Results. A few inspiring objectives and clear, measurable key results create an effective framework for bringing the organisation’s strategy to life.
- Objectives: the goals of the organisation, such as “We want to win in the Nordic countries”.
- Key Results: outcome-oriented numbers that track progress towards a goal, such as “we have 10 potential Nordic distributors in our network”.
The OKR model provides clarity and helps to focus resources on the tasks that are most important for the implementation of the strategy. It aligns activities at all levels of the organisation towards a common, strategic goal and increases transparency between teams in the organisation – everyone can see the objectives and key results of all teams.
Key results are sought through concrete tasks, which are steps towards the goal. What makes the model excellent is that it encourages the setting of bold objectives, accelerates the achievement of results and facilitates change management.
But it all starts with setting objectives.
Objectives in the OKR model
Carefully set objectives are vital to the implementation of the OKR model. Objectives not only link the strategic level to the day-to-day activities of the organisation, but also motivate actors. Objectives are the driving force that helps an organisation to achieve results.
Objectives should be easy to articulate, simple enough, goal-oriented and transparent. A good help question to help outline the objective would be: What will a good outcome look like?
For example, an objective could be:
- we will be the best place to work in Finland in the coming year
- material flows through the factory
- customers trust us
- we conquer a new market
Objectives always have a life cycle. The length of it depends on how long it takes to achieve the objective. Typically, the life cycle ranges from one to several quarters. Once the objective is reached, a new objective is defined. However, it is not advisable to change objectives in the middle of the cycle unless there are significant changes in circumstances – this maintains confidence in the permanence of the objectives set and does not undermine employee commitment to achieving them.
Objectives may include, to an appropriate extent, ”moonshot” objectives, i.e. objectives that require significant results above current performance levels. A good example of this is Google’s mission to “organise the world’s information”.
The objective may never be achieved as such, but it not only guides the organisation towards that big objective, but also encourages levels and teams in the organisation to think big enough. Thinking about even seemingly impossible objectives, is at its best a very powerful tool of looking at ways of working and ways of doing things: how should we work to achieve the impossible objective?
How many objectives is enough?
When setting objectives using the OKR model, the old adage applies: less is more. There should be a maximum of five objectives derived from the strategy, but preferably fewer. The fewer objectives an organisation has, the more focused its activities typically become and the faster it will reach its objectives.
It is essential to understand that OKR objectives are set alongside the normal, routine and mundane work – you need to be realistic about how many simultaneous changes your organisation has the resources to make. For example, Custobar as a company did systematic data-driven strategy work that resulted in one goal and a few key results. With CEO Tatu Kuivalahti, he trusted that other important things had been done before, but the chosen objective was a way of seeking a common direction for the work.
Who sets the objectives?
Setting objectives according to the OKR model encourages cooperation within the organisation and a dialogue that respects expertise. Setting objectives is an interactive process, where top management and teams can discuss and agree on objectives at each level of the organisation.
While top management is responsible for setting the top-level objectives, in the OKR model, teams are responsible for setting their own objectives that support the strategy and for monitoring their achievement. In fact, OKR objectives are set mainly at team level. The reason for this is that an objective in which the team cannot participate is useless. The idea is therefore not to dictate from above the objectives that the teams should pursue, but rather the opposite: empower teams to set their own objectives. This engages staff in a concrete and day-to-day way in the implementation of the strategy. In each team, team members work to achieve their own team objectives – a team can deliver much greater results than its members could do alone.
To ensure that the objectives at each level of the organisation are aligned and that progress is truly being made towards a common goal, the objectives of the whole organisation must be made public – including those of top management. This principle of transparency opens up the prospect of how one’s own objectives can be aligned in a way that supports colleagues or other teams and enables one to help others – and also to challenge them to grow and develop.
Do you have any thoughts about objectives or how to set them? Feel free to email or message me on Linkedin and let’s discuss more!