Goal setting is a crucial aspect of running a business. As a founder, you want your teams to establish clear targets and measure progress towards achieving them. You’ve heard about Objectives and Key Results (OKRs) before and tried to implement this framework the way big corporations did. You even googled “how do I implement OKRs in my business” or “best practices for setting OKRs”. You tried, and your teams tried. But it’s still difficult for everyone to define these goals, align on the objectives and track their progress until it’s delivered.
Rest assured, Objectives and Key Results are just one goal-setting framework among many. The most important thing when setting goals for your business is to learn how to define a clear vision of what you’re trying to achieve. So, keep reading to get the best practices on goal-setting for a business.
What are Objectives and Key Results (OKRs)?
OKR stands for Objectives and Key Results. It’s become popular in the 1970s in Silicon Valley for its versatility.
The key thing to know about OKRs is that it’s one goal-setting framework amongst many. This framework was built so any size or type of business can use it to set and track clear and measurable objectives. I mean, initially, the idea behind OKRs is to create a sense of focus and alignment within an organization, by setting ambitious but achievable goals that everyone can work towards. But because any business can use it at any scale, at any time (annually, quarterly, by project, etc.), for individuals or teams, there’s a lot of confusion around it.
OKRs are confusing
There are several reasons why the OKR framework can be confusing for certain teams.
First, because it requires a deep understanding of the business and its goals, as well as a clear plan for how to achieve them. Only then, can your people try to establish specific and measurable key results that are tied to each objective.
Then, OKRs are meant to be regularly reviewed and adjusted. How can your teams find an adequate way to constantly monitor their progress and develop their ability to adapt to changing circumstances?
Another reason is that OKRs are designed to be ambitious, but also achievable. How do you find a balance between goals that are challenging enough to push your to achieve more, but not so unrealistic that they become demotivating?
Overall, the OKR framework requires a high level of planning, communication, and adaptability. Although it’s a great format for its versatility, we all have our own definitions and way to work around it. So before you get into goal-setting, it is crucial for your business that you are on the same page with your teams by sharing a common vision.
Share your vision before getting into OKRs
Picture the vision for your business
What is the vision of your business? I’m not talking about the curated statement you added to your website. I’m going deeper. That description of what your future looks like is not just about a central point or statement. It must work across a wide variety of areas and be something that you can really imagine and you can see in your mind.
Where do you see your business in the future? Doing what? For whom? With whom? Capture those images using picturesque descriptions.
Once you’ve got that vision, then you can start cascading it down into a goal-setting framework, like OKRs, to bring it to life. Start by defining what is a goal for your business. It can be quite similar to your vision but is in essence more practical and specific.
Define clear goals
At Metavolve, our definition of a goal is set to a three to five-year-long horizon. Our approach to defining this is through a meditative exercise. We simply take the time to envision ourselves in three or five years time. You can do it too! Imagine what you’re doing, across your whole business that makes you happy and proud of what you’ve achieved. What does that world look like? You should start having images appearing in your mind. Images like, what you’re doing, where you’re located, the people around you, etc. That’s where you want to go and what will help you set your goals.
For example, when I talk about my longer-term vision, I can see myself working in a remote place. It’s tranquil, and away from the day-to-day bustle of what’s going on in the world. It’s a place where people can break away and really think strategically. Almost like a sanctuary. So the way I would translate it into a goal is by asking myself the incisive question: “So what?”.
My answer would be that the work we do requires people to break out of their day-to-day thinking, get out of the operations of their business and get into the strategic and creative and imaginative world. The physical environment that they’re in can help them do that.
Now, having an entrepreneurial sanctuary is a good tangible goal, but what does that really mean? Is that a project or a goal? How do we get there? Because my vision is for us to own our own venue, but that’s not necessary. There are so many different options for getting there! So the goal would rather be to own a dedicated place where our clients can go to benefit from facilitated strategy sessions, inspire fresh thinking and get away from their day-to-day life.
Turn your goal into objectives and key results
Another goal for us is based on our own intellectual property: we want our IP to be legally protected with a methodology that runs our business and our engagements. But now that we’ve envisioned that we have our world-class methodology and IP protected, comes the “so what?” question. What would it mean for Metavolve and its stakeholders to achieve this goal?
Well, our answer is that a scalable methodology gives us a strong competitive advantage, makes it easier to sell our services and helps us fulfil our mission to make entrepreneurship easier. So we can agree that this is a really important goal for us, right?
Truth is, those are all things that aren’t achievable in the next year. There’s certainly progress we can make towards that. And when we talk about that progress, that’s where a framework like OKRs comes into our view.
For us, an objective is a one-year time horizon. We take the five-year picture and then project ourselves into an annual view by asking ourselves: What does our world look like in one year’s time? What are the objectives that we can put in place to be able to see that one-year picture?
Let’s use the example of the goal to own a dedicated place where our clients can go to benefit from facilitated strategy sessions, inspire fresh thinking and get away from their day-to-day life.
In a one-year view, ownership seems a step too far. But working with an ecosystem of entrepreneurial business, we can have preferred relationships with key venues. This means our goal can carry the objective of renting out great spaces or for people to know us for our unique offsite venues. There are different ways of being able to say that.
Here are other questions you can ask yourself to set your objectives:
- What do we want our brand to be known for in a year’s time?
- What is the nature of the relationships we have with our clients in a year’s time?
- What are the skillsets that we need in a year’s time?
Define priorities for objectives and key results
By now you should have a one-year view of what you’re trying to achieve across the whole business. You can then take that down into your business units or your functions.
To cascade these into business units or functions, you need to form teams – specifically project teams. The objectives are going to be broken down into priorities-then you have the projects, metrics and resources that will be allocated to them.
Our definition of a priority is based on a quarterly horizon. This is where we start moving away from the future state and what we’re trying to achieve to a view of how are we going to get there. That’s where your projects start coming to the strategic party. With your leadership team, you want to set up those projects for success right from the get-go and align them as part of your strategic planning.
Practically speaking, you take the annual view and ask “what are the things that we can do in the next quarter to bring that goal closer to reality?”. I mean you could simply ask “What are the priorities that we need to work towards?” but make sure to align with your team about what “priority” means beforehand.
Use your OKRs on a project basis
Alright, your priorities have been defined. Now it’s time to focus on the projects that your business considers as priorities. At Metavolve, setting up a project means identifying the desired outcome, the key results and the measurements of success.
The reason why measurements are a crucial aspect to consider is that they give you concrete validation of the progress you’re making on the project. Otherwise, you can always just look at it and say, “Hey, this looks good we’re on track”.
You can have all these vanity metrics and qualitative measures which can feel fantastic, but when it actually comes down to moving the needle, it’s not moving in a real way. It’s moving the needle in a backslapping environment, which actually isn’t getting stuff done. On the contrary, when you start using actual measurements, you can start seeing that things are getting done and progress is made.
Communicate around each project
Obviously, it’s great for the business if your people deliver on your projects. It’s also a motivational lever for your leadership team to maintain high commitment across the board and throughout the project.
So once you’ve outlined your projects, you need to ensure that everyone understands the importance of each project and their impact on the business. Maybe it’s enhancing a strength or addressing a weakness. It can be about capturing a new opportunity or taking out a threat before it becomes a reality. There are so many different ways and reasons why you would want to take on this project. You’ve just got to be able to capture that and communicate it.
Ideally, you don’t want those projects to be communicated from a strategy team down. Your business would benefit from having designated project leaders. In that way, you can help them assemble the team they need and take ownership of that project until completion.
In the end, Objectives and Key Results are just a tool
And that’s setting goals in a nutshell!
Remember: Objectives and Key Results are just a piece of your annual strategy puzzle to set and achieve business goals. It’s just a tool, not a goal in and of itself.
What matters is to have a clear understanding of what goal setting is about. This way you can effectively evaluate how the OKR framework works for your company culture, team structure and industry. Because there are lots of different ways of seeing it: goals, objectives, rocks, priorities, initiatives, projects, programmes…
You know, people will come from different businesses using different systems and methodologies, and it just creates confusion. So take the time to define it for yourself and have everybody in line with the same definitions, language, and direction.
In the end, the only purpose of OKRs is to help your business focus its efforts, align its teams, and achieve its objectives. So use it to support your strategy, not to drive it.