Prioritize Performance With OKRs

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Business leaders have always needed to focus on profit and performance, but now that focus is becoming ever clearer. The current business environment is consumed with uncertainty. To stay focused on your organization’s priorities, consider OKRs as a starting point.

OKRs help define the objective (the O) you want to achieve and the quantifiable key results (the KR) to measure to answer the question “How do I know I’ve met the objective?” With the market and competitive landscape changing daily, OKRs help your management team quickly adjust to current conditions while keeping an eye on the longer-term goals.

Here are three reasons OKRs help you right now in the ongoing crises we’re facing.

Plan for the future, despite the changes.

Tim Koller, a partner at McKinsey, recently wrote on LinkedIn about Warren Buffett and his remarkable returns as head of Berkshire Hathaway. In short, $1 invested into the S&P 500 in 1964 would have left you with $198 today, while that same $1 invested into Berkshire Hathaway would have returned $27,373 today. How? By staying focused on core principles.

Although you’re likely not running an investment conglomerate, the same logic applies to leaders and businesses of all sorts. You need to define what your core principles are for yourself and for your organization, and from there you can define your goals. Similar to Buffett’s approach, OKRs provide discipline and structure, to focus on what’s most important.

What objectives do you want to achieve this quarter and in 2021? It’s important to remember not to set more goals than you can handle. Really focus. Pick three things. What three things this quarter or in 2021 will really transform your leadership or your business, and how will you achieve them?

After thinking through your objectives, you can then define your key results. What quantifiable results will hold you accountable to whether you’re achieving that objective? How do you measure them? What benchmarks give you a green light, yellow light, or red light on your progress toward those objectives?

Defining a framework for achieving your goals such as OKRs gives you clarity to make better decisions in the future.

Create clarity from chaos.

Amid the chaos and uncertainty brought on by this year’s events, your teams need to create clarity to achieve the goals they set for themselves. This requires agility, a flexible approach to keep a long-term perspective while adjusting to the day-to-day challenges they face regularly.

In a recent article, McKinsey consultants argued that OKRs are an integral part for teams to turn agility into action by aligning and clarifying strategy and practice. OKRs provide this kind of clarity. To support your organization’s objectives and key results, it’s best practice to create and align quarterly departmental and team-level OKRs to allow for the agility needed to address changing business conditions, while maintaining focus on the annual objective.

For example, suppose you have a new return-to-work initiative for your downtown office, and your objective is to safely return your people with minimal friction. What plans or key results are in place to describe how you will know you’ve met your objective? Do you have health screening and social distancing policies in place? What will you consider “minimal friction” — a 5% infection rate or lower? Did you establish a work-from-home policy with clear guidelines? What are the new channels for effective communication to distribute information most effectively with workers in the office and those working remotely?

These are the types of questions many leaders sort through today, and OKRs provide a straightforward approach to explore these questions and create a framework to address and solve them.

Develop your high-potential leaders at every level.

Leadership is arguably more important now than ever, but what makes a great leader has changed drastically over the last few years. Leaders need to hit their goals, no doubt, but now they also need to be hyper-aware of social and cultural trends, embrace emotional and mental health, and coach their direct reports with ongoing feedback.

OKRs can help leaders focus not only on the performance metrics that create team and organizational success but also create a shared conversation between leaders and their teams. By developing an OKR approach in your continuous performance discussions, your teams know exactly what they need to develop to succeed in their role. OKRs help create a more objective assessment of performance that aligns both sides of the leadership development process.

For example, let’s say you’d like your direct reports to work on their communication skills for their direct reports. That’s the objective. The key results may be daily five-minute conversations with their staff every week, or maybe a short daily email to keep the team informed on key events for inclusion opportunities. Results like these prove that teams are working on their communication, sharpening their skills, and developing empathy and understanding for their people.

By setting clear objectives and measurable results, you can easily use the OKR framework to develop yourself, your leaders, and your organization.

OKRs help you through the crisis and beyond.

If it’s not yet obvious, OKRs are a widely lauded approach to getting things done. Whether that’s in times of uncertainty or crisis, or whether it’s used for leadership development purposes, it’s clear that OKRs give you the clarity and focus you need to prioritize profits and performance.