It’s a new FY and the air is heavy with the latest strategies for business growth and productivity growth. And thus we bring you our two cents. Have you heard the name, OKR framework? If not, then let us tell you that it has been deployed by the biggest of global firms across the world, Google being one of the many. Twitter, LinkedIn, and Amazon are a few other names that adopted to this outcome-driven business methodology to accomplish aspirational growth targets.
However, the big question that arises out of the above provided context is whether it’s workable for small & medium-sized businesses? The answer is, absolutely yes! In fact, it had worked considerably well for a number of SMBs in the past.
What Does OKR Framework Preach in the First Place?
OKR stands for Objectives & Key Results. Herein, the ‘Objectives’ are aspirational business goals that an organization intends to achieve at the end of a quarter. The ‘Key Results’, on the other hand, are the quantifiable metrics that indicate the state of the intended progress. They must justify the pre-established ‘Objectives’, so as to make the OKR framework work.
How Can You Adopt the OKR Framework in your Business?
Before we move further with the application of OKR in your business, let’s discuss the significance of the two vital components of the said framework – the ‘Objectives’, and the ‘Key Results’. You need to intelligently set up the right ‘Objective’ as it’s paramount to succeed with the OKR framework. If you fail over here, the application of the whole framework goes for a toss.
Setting up the ‘Objective’
Firstly, you need to determine what exactly do you want to accomplish this quarter. Once that objective is clear, everything else moving forward becomes even clearer. But remember, the objective must be aspirational, only then, you can grow in the real sense.
The other factors to take into consideration while setting an objective are –
Q. Does the objective help accomplish company goals?
Q. Will it take the company forward?
Q. Is the objective been set keeping in mind a time limit to achieve the same?
An ideal example of an ‘objective’ under the OKR framework could be achieving record-breaking 3rd quarter revenue growth. Do you know why is it a perfect objective in context of applying OKR framework? Because this objective is aspirational, cannot be achieved easily, is time-bound, and will take the company forward.
Measuring the ‘Key Results’
‘Key Results’ are nothing but the measuring of quantifiable metrics that you have achieved against the set ‘objectives’. If you have defined the metrics right, you will make the correct observations. Here, the thing to note about ‘Key Results’ is that they cannot be binary, they are always numeric, something that you can count or gauge.
An example of a ‘Key Result’ could be – generation of USD 100k as new revenue in the third quarter. It’s measurable, aspirational, and challenging, but still achievable.
The biggest benefit of OKR framework from a CEO standpoint would be that it provides for a clear and straight-forward direction for the company to move into. You have got the goals listed before you, well-defined, and crystal-clear. Now the company leaders know what is supposed to be done, where they intend to reach in terms of business aspirations, and which strategy would be the most befitting to achieve the ‘Key Results’.