Last updated 19 August 2022 ·
Setting and achieving goals is essential for any business that wants to stay ahead of the curve. What’s the best way to set goals? One popular method is OKRs, Objectives and Key Results.
OKRs provide a highly structured framework to set specific, measurable objectives that perfectly align with your company’s overall strategy. Using the award-winning 1-3-5® planning methodology, an OKR plan should consist of three objectives and five key results associated with each. Key results are quantifiable metrics that you can use to track your progress towards an objective.
For example, let’s say your company’s objective is to increase sales by 20% this quarter. A key result could be to increase marketing spending by 10% or to increase outbound calls by 10% per month. By tracking these measurable results, you can gauge whether or not you’re on track to achieve your objective.
Setting and achieving OKRs can help any business, but they’re essential for fast-growing companies in the tech industry. Technology businesses often have to move quickly to stay ahead of the competition. If you can set and achieve effective OKRs, you’ll be better positioned to take advantage of opportunities and avoid being blindsided by threats in the market.
The pace of change is constantly accelerating within the technology industry. That’s why more and more tech companies are turning to OKRs to help them focus on what’s most important to grow and are consistently measuring their progress towards predefined goals. OKRs have been used by many successful companies like Google and LinkedIn to achieve astounding degrees of growth, and as a result, we’re seeing more and more startups adopt this approach.
There are several reasons why OKRs, objectives and key results are so effective. First, they force you to think about what you want to achieve and to be specific about it. This helps you to focus your efforts and ensure that everyone in the company is working towards the same goal. Second, they provide a straightforward way to measure progress. This ensures that you can adjust your strategy if you’re not on track to meet your objectives. Finally, OKRs help creates a culture of accountability, where everyone in the company knows they need to deliver results.
If you’re looking for a way to take your tech company to the next level, consider adopting OKRs. With their help, you can achieve greater clarity of purpose, improved accountability, and better overall results.
Why is it important for tech businesses to use OKRs?
OKRs are gaining popularity in business to measure progress towards specific goals. OKRs can be adapted for any size business, from start-ups to large corporations. However, there are several reasons why OKRs are particularly suited for tech businesses.
OKRs help to focus and align employees on the most critical tasks and objectives. In a fast-paced and constantly changing industry like tech, ensuring everyone is working towards the same goals is essential. OKRs also provide clarity and direction, ensuring everyone is on the same page and working hard towards the same outcome.
OKRs help to monitor progress and identify areas for improvement. By setting measurable objectives and tracking key results, businesses can get a clear picture of what is working well and where there is room for improvement. This information can be invaluable for deciding where to focus future efforts and help implement suitable recognition and reward schemes.
OKRs help to motivate employees and create a sense of ownership over results. When employees see that their efforts are contributing to tangible progress towards specific goals, they are more likely to be motivated to continue working hard. This can create a virtuous circle of increased productivity and continued success.
Overall, by helping to focus and align employees, monitor progress, and motivate employees, OKRs can help businesses to achieve their goals faster.
This is precisely why OKRs have been adopted by several high-profile tech companies in Silicon Valley, including Twitter, Spotify, Dropbox and Oracle. As well as the advantages listed above, OKRs help organisations create a culture of transparency and accountability, encouraging employees to take ownership of their work which often leads to high performance and faster growth.
It is essential to ensure that the objectives and key results set at the top by the CEO or MD of the business are realistic and achievable and that all employees are aware and buy into the system. When used effectively, OKRs can be a powerful tool for business growth and success.
Three reasons tech businesses choose to implement OKRs
There are three common reasons why most tech companies decide to embed OKRs amongst their teams: to improve communication, to increase productivity, efficiency and effectiveness, and to enhance their culture by boosting morale.
1. To improve communication
Improving communication is key to any successful business, and OKRs, objectives and key results can help by setting clear objectives and providing a structured framework for regular progress updates. By establishing open communication channels and encouraging transparency, OKRs can help teams stay on the same page and work together more effectively in the same direction.
When developing OKRs, it is essential to keep the following five key points in mind:
- Objectives should be clear and specific.
- Objectives should be ambitious.
- Key results should be aligned with the overall objective.
- Key results should be quantifiable.
- Progress towards key results should be tracked regularly.
Regular check-ins and updates on OKRs can help to keep everyone on track and ensure that goals are being met. Improving communication with OKRs helps set your organisation up for success.
Let’s look at some OKR examples that could lead to improved communication in a tech business:
A business might set an objective to increase customer satisfaction by 5%. Each department would then have its key results contributing to achieving this overall objective. For instance, the marketing team might aim to increase brand awareness by 10%, while the sales team works to increase the number of sales by 2%. These OKRs encourage departments to collaborate by working together towards these shared objectives.
Another example of how OKRs can be used to improve communication is by setting weekly or monthly check-ins. During these check-ins, each team member can easily share their progress towards their key results. OKRs provide a structured framework, so sharing this performance data becomes quick and easy. OKR software makes it even easier to view and report the team or individual progress, performance and achievements. This helps to ensure that everyone is on track and allows for early identification of any roadblocks. By sharing this information openly, business leaders benefit from improved communication and keep everyone on the same page.
OKRs can also be used to create transparency around companywide objectives. By sharing the company’s overall vision and goals with all employees, everyone can understand the direction in which the business is moving. This helps to ensure that everyone is working towards common goals and makes it easy to see how individual roles contribute to the bigger picture. Creating this level of transparency can help to improve communication across the entire business.
2. To increase productivity, efficiency and effectiveness
Increasing productivity, efficiency and effectiveness is another crucial goal for many tech businesses, and OKRs can help by providing a roadmap for achieving specific objectives. By breaking down goals into tangible steps and continuously measurable milestones, OKRs serve to avoid any drift. They can help teams track their progress and quickly identify improvement areas. Additionally, setting time-based deadlines for each objective can help to keep teams focused and on track.
There are five key characteristics of OKRs that support their positive contribution to productivity, efficiency and effectiveness as follows:
Clarity: Objectives should be clear and concise. They should be specific enough to be measurable and not wholly unrealistic.
Alignment: Objectives should be aligned with the organisation’s strategy. All team members should be working towards the common overall business goals.
Commitment: Objectives should be achievable with stretch. When setting OKRs, it is essential to be realistic about what can be accomplished in a given period but ambitious enough to ensure they move the business forward as much as possible.
Tracking: Progress towards objectives should be tracked regularly. This will help identify areas of particular success that can be celebrated and areas where improvement is needed.
Feedback: Feedback should be sought from all team members regularly. This will help to ensure that objectives are still relevant and achievable.
When used effectively, OKRs can help organisations achieve their goals more effectively and efficiently. By providing a clear framework for goal-setting and progress tracking, OKRs can help organisations stay on track and avoid getting sidetracked by irrelevant activities.
In addition, because OKRs are quantifiable, they provide a practical way to measure progress and identify areas where further improvement is needed. As a result, increasing efficiency with OKRs can positively impact an organisation’s bottom line.
Let’s consider some OKR examples that serve to increase productivity, efficiency and effectiveness in a tech business:
Objective: Increase customer satisfaction
Key result 1: Reduce churn rate from 10% to 3%
Key result 2: Hire three new Customer Success Managers
Key result 3: Reduce the time required for issue resolution by 10%
Key result 4: Implement an online customer feedback loop and fast response
Key result 5: Carry out three new high-value customer webinars offering advice and best practice
For more OKR examples like this, check out our blog OKR examples to help you get started.
3. To enhance the culture and boost morale
Finally, getting the right corporate culture and level of morale is often a fundamental goal for tech businesses. OKRs can help achieve this by providing employees with a sense of ownership and responsibility. By involving employees in the goal-setting process and giving them a chance to contribute to the company’s success, OKRs can help to create a more positive and motivated workforce. Additionally, celebrating successes can help keep employees engaged and inspired to achieve even more.
Furthermore, OKRs help hold individuals and teams accountable, leading to increased motivation and pride in their work. Implementing OKRs can be challenging, but the rewards are well worth the effort. By developing realistic and achievable objectives, organisations can create a more positive and productive work environment, ultimately leading to better morale.
Lets now look at actual examples of OKRs boosting morale in the tech business:
At Google, employees are encouraged to set personal OKRs in addition to departmental ones. This helps to foster a sense of ownership and responsibility for individual results.
LinkedIn uses OKRs to align employee efforts with company-wide objectives. This ensures that everyone works toward the same goal and that their individual efforts contribute to the company’s success.
Microsoft Yammer has found that setting quarterly OKRs has helped to improve communication and collaboration between teams. By sharing objectives across departments, everyone better understands what others are working on and how their work fits into the bigger picture.
Implementing OKRs is a great way to enhance cultural values and boost morale within any business. As these examples illustrate, it can be an effective way to keep employees focused and engaged while also creating a sense of purpose and achievement.
Setting and tracking goals can help your tech business grow. By establishing objectives and key results, you create a system where everyone knows what needs to be done to succeed. This helps reduce confusion and ensures everyone works towards the common business goal. Regular progress reviews will help you identify achievements and areas for improvement.
If you’re not currently using OKRs in your tech business, we encourage you to try them – you may be surprised at how much they can help improve performance. Download our OKR Builder™ today to get started!