Lean In is a book by Sheryl Sandberg about women in the workplace. The idea behind the book is that more women should consider running for political office and becoming involved in business so that they can help change the way things are done at their companies. This post isn’t about Lean In – though I recommend it highly as a must-read – it’s about OKRs (Objective, Key Results) in business. You see, while reading Lean In, I noticed that there were quite a few sections on how to set boundaries and have self-discipline. One chapter even talked about how to stop being such a go-getter and take some time for yourself each day. The problem was, everything Lean In talked about could also be used to improve working conditions at a company or start creating personal value within an organization. So, what’s the missing link? A OKR (objective key result) system. What this means is that instead of setting targets for financial goals like number of customers or number of interviews, you should set objectives describing what outcome you want to achieve as a company (such as increasing revenue by 5% annually). OKRs will help you stay focused on results and build lasting relationships with your team members instead of getting lost in endless tasks and spreadsheets. Read on to learn more!
What is an OKR?
An objective key result is a measurable outcome that you have committed to achieving as a company. It could be the number of leads we capture each month, the number of articles we publish, the number of hours our employees work, the number of weddings we plan for our employees or the number of birthdays our employees celebrate each year. There are many ways to use an objective key result in a business setting. For example, you could use it as a metric to measure the impact of your marketing strategy or as a focus area for your leadership team to set and track goals.
Why is having a system for OKRs important?
When it comes to business, having an objective key result system can help save your team members time and money by streamlining the process. For example, a company may have an objective to increase revenue by 5% annually, but how does that compare to the total cost of ownership of the business? That number is subjective because it may depend on how much revenue the business is able to generate and whether or not those extra sales would have been profitable. By establishing an objective key result system, the total cost of ownership can be used as a benchmark to compare other companies in the industry. Since the cost of revenue can be used as a reference, the company can then decide if it wants to increase revenue at all or decrease expenses to remain competitive.
Set up your own OKRs
You can also use an OKR system to set your own goals and objectives. This is great if you’re the boss and don’t mind taking the time to write them down and keep them in a physical location. You can set goals for the entire organization or specific departments. To set up an objective key result system, you will want to first decide what outcomes you want to focus on. You can then create a process for setting and tracking goals. In step two, you will want to create a goal definition that encompasses the outcomes you set up in step one. Typically, goal definition is determined by three things: the nature of the objective, the level of difficulty of the objective and the impact of the objective on the bottom line. Let’s say, for example, that your goal is to increase revenue by 5% every year. Now, you could do that by setting a goal that your revenue is $1 million by the end of the year or by growing your customer base by 5%. However, by breaking your objective into smaller, more achievable goals, you can get a better understanding of the impact of each goal on the bottom line and make better choices for the future.
The power of self-discipline
By tracking the results you set up for objective key results, you can achieve a greater level of accountability and self-discipline. For example, if your revenue goal is $1 million, but you can only reach $600,000, you will have to change your objective to be more realistic. You will need to find a better balance between being too ambitious and not ambitious enough. This will help you scale back on the expenses of the business and make room for the goals you set out for yourself.
If you’ve been in business for a while, you may have realized that tracking and quantifying your key results can be a chore. You may also have realized that measuring those key results can have a negative impact on your company’s culture and ability to expand. However, tracking and quantifying your key results is key to staying focused on the long-term goals that will help your company reach its potential.