How To Design Failproof OKRs

If you’ve seen presumably bulletproof objective key results (OKRs) fail, you’re not alone. Small to midsize business (SMB) leaders often set up what seem like effective OKRs only to be disappointed as time runs out. But once you master the art of generating OKRs that deliver results, you establish a systematic way of fostering excellence in your organization. Here’s a clear, simple OKR design process [1].

What are OKRs?

OKRs refer to frameworks used by companies to establish and monitor the progress toward objectives. Here’s how each element of the acronym breaks down:

• Objectives are typically high-level goals that your company wants to reach. They must align with your company’s overall mission while being concise and specific.

• Key Results refer to milestones you can use to measure progress toward achieving your objectives. They should always be SMART (specific, measurable, attainable, relevant, and time-bound).

Another way of looking at OKRs is that the objective is the “what” that you’re trying to achieve. And the key results answer the question, “How do we know we’ve reached our objective?”

The target results in the above example align well with the objective, which is surely in concert with the organization’s higher-level goal of generating more revenue through new customers.

For SMB leaders, OKRs provide quantifiable, reasonable goals that managers can use to motivate teams and ensure the business keeps progressing. Because good OKRs are simple, they’re easy to grasp for team members, which avoids confusion regarding what they should be working on. In this way, OKRs can also align day-to-day tasks with your business’s goals.

How to design failproof OKRs

Designing OKRs that won’t fail involves a series of steps that, when taken in sequence, reduce the chances of your team not fully adopting OKRs or adopting them and then falling short.

Design SMART objectives

When you have SMART objectives, you give your team members quantifiable, reasonable goals they can get behind. Here’s how you can apply each of the elements of SMART:

Specific

You can make your goal specific by drilling down to exactly what you want to accomplish. For example, if you were to set a goal of “Improve online marketing,” that wouldn’t be specific enough. A more specific goal would be “Increase engagement on our products page by an average of 15%, using weekly engagement stats, by the third quarter of 2024.”

Measurable

You make your goals measurable by including numeric key performance indicators (KPIs). Using the example above, the KPI is an increase of 15% in the number of customers that engage with products on the site’s page.

It’s best to erase all nebulousness as you try to make sure they’re measurable. For example, it may be a good idea to crank up the measurability by defining exactly what “engagement” entails in this context. You could, for instance, define engagement as spending at least one minute on a product page.

Or you could raise the stakes, saying the page achieves “engagement” only when customers either put an item in the shopping cart, click on an image, or click through to a product specs sheet.

Attainable

“Attainable” goals are realistic—objectives that your team can reasonably meet within the given time frame. The attainability of a goal often depends on the skill level of team members and the resources you have to invest in supporting their work toward meeting the goal.

For instance, suppose you wanted to reduce the overall time the IT team spends each week helping customers install a software solution. You set the goal of reducing the time spent on troubleshooting installation by 25%. A team member suggests that this would be easier if customers were provided with a self-service portal that addressed the most common installation problems.

If you then told the team to build the pages required to help customers self-serve, you may make your goal unattainable. After all, they can’t attend to customer requests as they spend time building the pages.

On the other hand, if you hire an outside provider to build the self-service resources, your goal may be attainable.

Relevant

When goals are relevant, they match one or more of the organization’s core objectives. It may be tempting to argue that any goal directly aligns with a company’s goals, but that’s not the case.

For instance, let’s say your company wants to increase engagement with existing customers in an effort to strengthen its customer base. You then set a goal of having 45 fresh prospects fill out contact forms at an industry conference. This may not be relevant to your goal of supporting existing relationships.

A more relevant goal could involve hosting a dinner during the weekend of the conference for current customers you know will attend and gathering written product feedback from at least 20 of them.

Time-bound

One of the most tenuous Achilles heels of OKRs is when they don’t have a finite time frame. But when you make sure your objectives are time-bound, you put time on your side—it becomes a motivating factor and a planning tool while making it easier to evaluate progress toward your OKRs.

It’s best to establish shorter rather than longer timeframes. For instance, a single quarter is often a reasonable span of time for OKRs. When OKRs are either not time-bound at all or when the timeframe gets adjusted, the integrity of your system suffers, and confidence in it may slump.

Make sure your OKRs aren’t too ambitious

As your team walks out of an OKR meeting, you don’t want them murmuring, “Hmmm… Easier said than done.” Rather, you want them to think, “Yes, we can nail this. For sure.” This both boosts confidence and earns the trust of team members. The key to making sure your OKRs aren’t too ambitious is to avoid setting up too many at once. One or two is often enough to cultivate tangible, measurable improvement.

It’s equally crucial not to design OKRs that get too big too fast. This can be difficult, especially when company leaders, stockholders, or other stakeholders are applying pressure. But, in the end, achieving modest OKRs is better than failing with an ambitious one.

To ensure your OKRs aren’t asking too much, you can gather feedback from the team members who’ll be your boots on the ground. This can be done in private, face-to-face meetings or using surveys. One advantage of surveys is that they provide documentation you can use to justify the specifics of your OKRs in the future.

Another way to reign in over-ambitious OKRs is to create a series of benchmarks the team could use to chunk the key results. For example, you could divide 120 new leads over the course of a quarter by three, resulting in 40 per month. Then you can ask, “Is this reasonable or a tough ask?”

When in doubt, start small. You can always ramp up the next OKRs if necessary.

Manage your OKRs

By monitoring and coaching OKRs post-implementation, you provide scaffolding for success. Some team members may be too proud to ask for help when they should or to reach out for clarification. Others may not be clear regarding what the key results entail. But by establishing training and support systems, you build an infrastructure for OKR victory.

Monitoring your OKRs should involve a formalized assessment system, and employees should understand that this is in place to encourage their success, not to grade or rank them against each other.

Key considerations

The success of your OKRs will also depend on how you establish what progress means for KRs, how you evaluate performance in connection with KRs, and whether KRs meet time constraints. More specifically:

• Progress for a KR involves establishing time-based milestones, such as beta testing a new application on 2,000 people by June 30th.

• Performance in terms of KRs centers around whether the team met each KPI. Using the previous example, if the dev team had 2,200 verified beta testers by June 15th, they would’ve exceeded performance parameters.

• Meeting time constraints involves designing KRs that the team should meet within a quarter or less. Even though the objective can span longer than a quarter, the key results should be shorter-term.

By keeping these factors in mind, you create a system that’s easier to manage by leaders and easier for employees to work within.