In today's ever-changing business landscape, companies are more than ever required to constantly adapt to a changing environment. Change is a necessity for survival. The recent health crisis is a striking example of this. While other triggers already existed (digitization, climate issues, competition), it has forced us to adapt our processes, rethink our working methods – in short, to change our habits.
In an economic environment marked by uncertainty, how can we align the vision of managers with that of the employees who make up the company? How can we reconcile human development and performance?
The origins of the OKR method
Where does the OKR method come from?
It was Andy Grove, former CEO of Intel, who most talked about the OKR method in the 1970s, based on the principle that it's the implementation (of an objective) that counts most. Before Grove, it was Peter Drucker who was the first initiator with Management by Objectives (MBO), which he defined in 1954 in his book The Practice of Management.
MBO, widely used in many companies, aims to improve individual performance based on clearly defined objectives. The more an organization’s employees meet (or exceed) their objectives, the better they perform. And they are rewarded accordingly.
Going against the grain of overly rigid, top-down traditional management, the OKR method makes it possible to manage collective performance more effectively by engaging employees as actors in their objectives.
One of its main biases is that it pushes employees to achieve their goals by any means necessary, even if this is detrimental to their company's interests.
The founding principles of the OKR method
Since adopted by numerous Silicon Valley giants such as Netflix, Twitter and Uber, the OKR method seems to be gaining more and more followers. Standing for "Objectives and Key Results", the OKR method is based on simple principles that are essential to its success.
Principle 1: Set ambitious targets
Sun Tzu wrote in The Art of War: "He who has no objectives is unlikely to achieve them". Without clearly defined objectives, no performance is possible or measurable. This is the starting point.
A company's main objective is its mission, its raison d'être. For Tesla, for example, it's: "Accelerating the global transition to a sustainable energy regime".
A company's mission statement provides direction, the Holy Grail to be reached, while giving meaning to teams to motivate them to act.
This ultimate path can then be applied to all departments of an organization, whatever its size, in the form of more concrete objectives. Everyone can then determine their own objectives and become fully involved. To drive the company project forward, each objective must be :
- Precise and clear: everyone needs to understand
- Defined in a relatively short but realistic timeframe
- Ambitious to encourage you to excel
- Quantified
Strange as it may seem, the aim is not to reach the goal, but to get as close to it as possible. But how? By identifying the key results to be achieved. The goals to be achieved are then fed by skills development materials tailored to each individual.
Principle 2: Identify key results
To understand, let's imagine that your goal is in the shape of a Rubik's Cube. Each colored face you complete represents a key result.
The key result functions as an indicator of success. It is an intermediate result. It complements the objective. One cannot exist without the other.
To maximize the chances of progress and success in a project, it is necessary to set a number of quantified key results to measure progress.
Let’s take an example:
If a company's objective is to acquire 20% more customers, several key results can be implemented, such as :
- Increase prospect pipeline by 10%.
- Involve sales staff in 1 additional 1-hour prospecting session per week, generating at least 20 prospecting calls.
- Launch 1 monthly e-mail marketing campaign to 500 targeted contacts for 6 months
The achievement of a key result can be measured on a scale from 0 to 100%, but can also be measured in terms of sales generated or objectives achieved or not (for example, the creation of an internal incubator). This fication of results to be achieved is more in line with new talent expectations.
The benefits of the OKR method
Larry Page, one of the Mountain View giant’s co-founders, confidently asserts that “OKRs have multiplied Google’s growth by 10”. Such an achievement deserves respect, given the usual difficulties of initiating change within even the smallest companies.
What are the main benefits of the OKR approach?
More flexible than Drucker's MBO, the OKR approach leads to smoother, more efficient employee management. This is as true for aligning individual and collective priorities as it is for fostering a new culture of how to achieve these goals.
In detail :
- Encourage the alignment and ambition of all layers and departments of the company in the same direction for greater cohesion.
- Reduce target review cycles and gain in flexibility: the idea is to supplement annual appraisal interviews with continuous feedback to measure target achievement as closely as possible to reality.
- Help employees to focus on the “how”: key indicators encourage commitment, intention and focus on achieving objectives.
- Decompartmentalize everyone’s ambitions : an OKR objective is not designed to be achieved. It would be too timid. It’s better to reach 60% or 70% of the target, which pushes you out of your comfort zone and further.
How do you deploy the OKR method?
To deploy the OKR method, encourage individuals to set ambitious goals, promote sharing for transparent participation of all employees in collective advancement, and make sure to regularly review OKRs to cultivate organizational agility by avoiding rigid and unrealistic annual campaigns.
In detail :
- Foster ambitious goals in individuals to cultivate an environment conducive to personal commitment and self-improvement.
- Encourage collaboration and transparent participation by all employees to move the organization forward collectively.
- Adopt a regular OKR review approach to stimulate organizational agility, abandoning rigid and unrealistic annual campaigns.
Take note!
Using our“Performance & Engagement” platform will enable you to :
- Easily define your objectives and key indicators , individually and collectively.
- Encourage ongoing exchanges on performance.
- Facilitate a climate of trust and achievement within your teams.
- Simplify your objective reviews and annual appraisals.
- Increase your employees’ skills in a targeted and effective way.
