Updated: Nov 1, 2021
Company leaders implement OKRs to have clear planning, alignment and tracking of progress, but often underestimate how regular OKR reviews create valuable team routines. OKRs (Objectives & Key Results) is a powerful review method if the data is set-up in a collaborative way and maintained and tracked regularly.
Set-up OKRs & how to calculate them
After basic set-up & process OKR trainings, leaders and teams are enabled to develop inspiring & meaningful Objectives and outcome-oriented & clear Key Results. However in our implementation experience, we see that most teams do not align at the beginning of the quarter or semester on how to measure or calculate the OKRs against a percentage range.
That leads to a lot of confusion and misunderstanding if we either score against an absolute target value or an achievement range. Some clients even have competing data sources, which need to be aligned before the tracking cycle.
Examples how to calculate numerical OKRs:
Set up a range from As-Is to To-Be value, e.g.
Retention rate should improve from 10% - 16% from 1 July to 30 Sept. or
Customer base should grow from 10K to 16 clients.
Therefore 6% or 5K clients represents the 0 - 100% range to measure, e.g. 12% retention or 2K customer increase means 33% achievement.
We could also measure against an absolute value without a starting point which is a bit more abstract and not so clear for team level.
Decrease delivery speed to 30 minutes by end of Q3, i.e. if we are in 40 min, we achieved 66%
For both schemes we advise to use absolute values rather than percentages if possible for a clear communication and better inspiration and alignment. Furthermore we need to define if the values need to be measured against a monthly benchmark or towards a linear / non-linear monthly result. e.g. July needs to be 12% retention rate therefore end of July we achieve 100% with 2% uplift. It depends if you want to track monthly achievements or the uplift and trajectory during the quarter.
Examples how to measure against achievements and work outcomes:
To measure if the work is fully done, we can use outcome related OKRs which can be measured binary on 0 - 1 achievement rate.
Finish and roll-out the new payment system
Set-up and run quarterly employee surveys
However most roll-out take a full or even multiple quarters and leaders and teams want to see if any progress is made, which could be measured by deliverables or milestones, ideally set-up at the beginning of the OKR tracking cycle:
Finish and roll-out the new payment system measure on milestones:
Develop payment system
Test payment system
Launch payment system
Implement & train users
For easy tracking we would recommend 3 to max. 5 deliverables and weight them
equally as in this example each by 25% achievement, of course you can also weight them according to preferences, but remember we want not to overcomplicate OKR tracking.
After or during OKR set-up, the first review is very crucial for the teams as we align on how to measure KRs and which data sources we use, this avoids future misunderstanding and creates alignment and security among team members.
Track and review OKRs regularly
We cannot emphasise enough from our implementation experience that OKR tracking and review is the core exercise to work successfully with OKRs and achieve the goal-setting. As in our blog - The Heart of OKRs - we appreciate the efforts or colleagues and their clients to spend a lot of time on setting up the almost perfect OKRs, however without a clear tracking and review process during the quarter it does not make sense to apply goal-setting or planning techniques as we need to know if you are moving closer to the results or not.
A lot of teams find it tiresome to have an extra 'admin' effort to track their work progress against defined Key Results on a weekly or bi-weekly basis on spreadsheets or in an OKR Tool. However if the data inputs, formulas or milestones are set-up clearly at the beginning of the quarter as described above, this only takes a fraction of the weekly team or company meeting and creates a powerful habit to measure results.
Furthermore OKRs are an agile technique which means the progress towards Objectives and Key Results provides the data and evidence for an educated discussion in the teams on:
What was achieved last week and why?
What was not achieved last week and why?
What are the current road blockers and issues?
How can we solve them together?
What could we achieve together in the upcoming week to move the Key Results?
This is a similar technique than daily huddles of scrum teams and we would recommend to implement it on all teams on a weekly or bi-weekly basis. The focus of these meetings should be to together achieve results and overcome obstacles and road blockers rather than personal 'KPI' styled blaming games. These routines could be supported by 'Scrum master' or 'OKR champion' facilitators, and should be a part of already existing meetings.
Communicate OKR progress transparently to empower and inform the teams
OKR tools and spreadsheets give you the possibilities to create weekly, bi-weekly and monthly OKR progress reports on company, department, team or cross-functional project levels. The key to this data is that your teams are updating the OKR progress regularly, if not the picture could be incorrect or flawed.
As in the previous paragraph, the review discussion and updates should take place in existing meetings (board meeting, department head & managers, team leader & members) and the achievement values should be updated together for alignment and clarification on a given cut-off time (e.g. Fridays 6 pm).
The following week, an overview report should be accessible in the OKR tool or send out by data, strategy or people teams to inform everybody in the company on the current progress against the Objectives and Key Results on each level or project.
This is very powerful as it connects each employee to his or her contribution to the company purpose and objectives and further enhances the overall understanding of everybody for the business. It also enables leaders and team members to generate ideas for other teams or reach out cross-functional for projects or issues.
This blog was written by Carsten Ley, Entrepreneur, Enabler & Project Lead in Employee Experience, Project & Business Transformation leading large scale project implementations in Banking, Consulting, Project & Experience Management for companies like Deloitte Germany, VW Mexico, Rolls-Royce UK and Lazada Vietnam. 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.