What are the benefits of OKRs? Can OKRs help your business succeed? How can they help your company?<\/p>\n\n\n\n
The benefits of OKRs are<\/a> many. In addition to setting clear and measurable goals, there are many additional benefits of OKRs. Using OKRs creates transparency, and can help you build aa positive company culture<\/a>.<\/p>\n\n\n\n Read more about the benefits of OKRs below. <\/p>\n\n\n\n\n\n\n\n Editor\u2019s note: This article is part of Shortform\u2019s guide to success<\/a>. If you like what you read here, there\u2019s plenty more to check out in the guide!<\/em><\/p>\n\n\n\n Is your company focused on the right things? Do you really understand what goals will move your company forward, and how to measure them? OKRs can help. In Measure What Matters, <\/em>venture capitalist John Doerr shows you how to use the OKR<\/a> management system to identify your priorities, set ambitious goals<\/a>, clearly measure and track them, and motivate and align everyone on your team. <\/p>\n\n\n\n This is the system that helped Larry Page and Sergey Brin turn a small startup called Google into one of the most ambitious and innovative companies<\/a> in the world. Whether your business is large or small, OKRs are invaluable tools. Learn to implement the same management system used by Google, Intel, LinkedIn, Disney, Twitter, and Spotify.<\/p>\n\n\n\n In order for everyone\u2019s goals to be aligned and contributing to the same ultimate objective, everyone\u2019s goals, and their progress toward those goals, need to be transparent.<\/strong> The OKR system builds this necessary transparency into the process. CEOs can look at the goals of their executives, managers, and junior staff, and junior staff can (and should) look at the goals of their bosses and the CEO\u2014everything is public. <\/p>\n\n\n\n Aside from alignment, there are other benefits of okrs and transparency:<\/p>\n\n\n\n Studies show that you\u2019re more likely to achieve goals that you\u2019ve made public, and OKRs are always public. Similarly, 92% of employees are more motivated to reach their goals at work if their progress is made visible to their colleagues, as it is in the OKR system.<\/p>\n\n\n\n If your colleagues know your goals, and they know how much (or how little) progress you\u2019ve made toward them, they have a better sense of how and when to help. This fosters support among peers and strengthens workplace morale. <\/p>\n\n\n\n Additionally, your goals might be similar to a colleague’s, and, consequently, you might have resources, strategies, or information that could help your colleague reach her goals. You can\u2019t know which of your resources could be useful to your peers if you don\u2019t know what they\u2019re working on.<\/p>\n\n\n\n In large companies, people often work on the same thing, and toward the same goal, without realizing it. Making sure everyone knows everyone else\u2019s goals helps keep employees from performing redundant tasks and, consequently, saves the company time and money.<\/p>\n\n\n\n We\u2019ve discussed the explicit benefits of OKRs and CFRs, but there are also benefits of OKRs that are more implicit. You gain these OKR benefits just by working through the OKR\/CFR process, irrespective of the process\u2019s outcomes. <\/p>\n\n\n\n When Zume co-founder Alex Garden worked as a general manager for Microsoft\u2019s Xbox Live, he found that the objectives set by executives were often unrealistic or impractical because these leaders weren\u2019t in touch with the day-to-day operations of the company.<\/p>\n\n\n\n Conversely, executives who use OKRs have<\/em> to figure out what key results<\/a> will lead to their objectives. They need to know the how<\/em>, as well as the what<\/em>. OKRs and CFRs provide leaders with a reality check<\/strong>.<\/p>\n\n\n\n Garden says that when you\u2019re an employee, you\u2019re often evaluated based on the volume of your contributions to the company. If you produce a lot, you\u2019re promoted, and eventually, you find yourself in a manager position. Now, instead of being evaluated by the quantity of your work<\/em>, you\u2019re evaluated by the quality of your decisions<\/em>. You\u2019re paid to think, rather than do.<\/p>\n\n\n\n However, no one tells you that as a manager, working smarter matters more than working harder. Furthermore, no one tells you how <\/em>to work smarter. Consequently, when problems arise, you just keep working harder and harder, because that\u2019s what you\u2019ve always done and that\u2019s what\u2019s worked in the past.<\/p>\n\n\n\n One major benefit of the OKR system is that it forces everyone, at every level of the company, to work smarter<\/strong>:<\/p>\n\n\n\n 1) It forces everyone to align their goals with the company\u2019s goals<\/strong>, and to understand exactly how their specific goals and activities contribute to the company\u2019s success. In other words, it forces every employee to think like a manager.<\/p>\n\n\n\n 2) It forces people to be specific about their priorities<\/strong>\u2014you can only choose three to five goals, and you need to know exactly how you\u2019ll achieve them and how you\u2019ll measure their success. Again, employees learn to think like managers. Then, as a manager, she already knows how to make quality decisions<\/a> and lead others to do the same.<\/p>\n\n\n\n 3) It forces all employees to take ownership of their ideas and goals<\/strong> and to have a voice. In some organizations, only the loudest members are heard. In OKR organizations, everyone\u2019s voice is heard because everyone\u2019s goals are transparent. Everyone has to take on the essential leadership skills of setting goals, making them public, soliciting feedback, and defending their priorities.<\/p>\n\n\n\n Startups that don\u2019t groom their members to become executives miss a valuable opportunity. They either end up promoting employees who don\u2019t know how to lead, or they gradually replace the original team with outside hires. Neither is good for a company\u2019s morale or success.<\/p>\n\n\n\n A \u201cculture of consideration\u201d is one in which each member of the team understands how his or her work affects others in the company. Members also understand how their work depends on the work of others. This is important consideration in the OKR benefits. <\/p>\n\n\n\n For example, at a pizza delivery service like Zume, the delivery fleet manager, Mike, might have a key result of expanding the radius of the company\u2019s pizza delivery by a certain date. But this goal depends, in part, on whether the manufacturing team can get all the vehicles ready for the expansion.<\/p>\n\n\n\n Let\u2019s say the manufacturing team is running behind schedule. At another company, this might cause Mike to feel resentful and anxious\u2014his ability to achieve his goal is at risk, and he feels out of control of the situation. He might confront the leader of manufacturing, Joe, pressuring him to hurry up. This interaction ends in hostility between Mike and Joe and, possibly, the failures of their respective goals.<\/p>\n\n\n\n However, in any company that implements OKRs, Mike can simply say to Joe, \u201cThis KR is at risk.\u201d There\u2019s no blame in this objective statement, and Joe likely already knows the KR is at risk: The KRs of all departments are transparent, and Joe has already agreed to this KR. Additionally, because Mike and Joe know their work is interdependent, they\u2019ll advocate for one another\u2014if Joe needs more resources from upper management to get his piece of the job done, it\u2019s in Mike\u2019s best interest to help him get them.<\/p>\n\n\n\nWhy Use OKRs?<\/h2>\n\n\n\n
The Benefits of Transparency<\/strong><\/h3>\n\n\n\n
Benefit #1: Transparency Increases Productivity and Engagement<\/strong><\/h4>\n\n\n\n
Benefit #2: Transparency Fosters Collaboration<\/strong><\/h4>\n\n\n\n
Benefit #3: Transparency Reduces the Risk of Redundant, Overlapping Goals<\/strong><\/h4>\n\n\n\n
The Side Benefits of OKRs and CFRs<\/strong><\/h2>\n\n\n\n
Side Benefit #1: OKRs Force Executives to Set Realistic Goals<\/strong><\/h4>\n\n\n\n
Side Benefit #2: OKRs Teach Future Managers How to Be Leaders<\/strong><\/h4>\n\n\n\n
Side Benefit #3: OKRs Create a \u201cCulture of Consideration\u201d<\/strong><\/h4>\n\n\n\n