Measuring the work results is not enough! OKRs can guide the way to create the right data to let all teams work on the company success and can further incorporate standard KPI measurement or SMART approaches.
Content
The Data we have
Companies normally measure basic set-up of data to measure their internal performance (workload, productivity, costs, etc.) and their external customer and market performance (engagement, sales, reach, etc.). That leads to basic OKRs regarding sales performance, productivity or efficiency improvements and timelines to finish and launch certain products and features.
In Customer Experience Management we refer to this data as "What" Data, means what have we achieved against our business plan? This leads to the first 3 of the most common OKRs we have seen with our customer, check our latest blog on this topic.
However the data we need for real success measurement and further gains in the market or the customer is the "Why"Data.
The Data we need
OKRs set-up forces us to consider leading and lagging Key Results, while leading KRs are work output related similar to KPIs (Finish a product, Work faster, etc.) and lagging KRs are outcome related (Customer Satisfactions, Sales, Engagement, etc.)
Any work outcome the team wants to measure, we need to ask the "Why" question, e.g.:
Why do we build this product and feature?
Why do we sponsors this event?
Why do we need to make 100K USD profit in 2023?
The answer leads normally to the real success metrics and connects the teams to company targets rather than only to their daily to-dos.
How can OKRs measure & manage success effectively?
SMART (Specific, Measurable, Assignable, Realistic & Time-Related) can be directly used for OKR set-up and combined with strategy, yearly goals & KPIs to focus on the company success. Therefore we do not need to distinguish Goal Setting Methodologies like OKRs, SMART or KPIs but use them together to our full advantage.
Our I-SMART Approach for quarterly Objectives & Key Results
Inspiring - Set-up inspiring and motivating goals to explain the direction and purpose
Specific – target a specific project or area for innovation or improvement in your goal
Measurable – quantify KRs always or enable progress measurement by milestones
Assignable – make your leaders and teams responsible for Objectives, Key Results & Projects / Actions
Realistic or Stretched – state clearly which results can & should be achieved fully and which ones are ideally a 30 - 35% stretch and get feedback from the teams
Time-related – be specific when Key Results need to be achieved, some of the are dependent and need to be achieved before the end of the quarter
It is important that we target and specify the goals and data which will lead to company success and not try to pursue every industry or KPI standard. OKRs help you to focus every quarter on the goals and measurement which really counts rather than an overwhelming KPI dashboard in which teams lose track.
Conclusion
OKRs should not measure everything company and only lay the focus on the current and future success data to drive and grow your business. If you already work with goal setting techniques like SMART or KPIs we can easily incorporate them into OKRs with a more narrow focus on each quarter, the purpose and objective behind these measurements and a drive to outcome related key results for market or customer impact rather than just internal metrics.
For more information how to implement OKRs successfully please contact us on transform@asiapmo.com or on our contact form.
This blog was written by Carsten Ley, Entrepreneur, Enabler & Project Lead in Customer Experience, Project & Business Transformation leading large scale project implementations in Retail, E-commerce, Banking, Consulting & Experience Management for companies like Deloitte Germany, VW Mexico, Rolls-Royce UK, Lazada Vietnam and H&M South East Asia. He founded 2018 Asia PMO, a consulting firm focussing on getting clients fast and efficient into implementation of company objectives, customer & employee experience improvements to foster a result- and team-oriented environment.