OKRs can be set for any time period from one month to a year, But quarterly OKRs (set for 3 months) are considered the optimal solution as it is long enough time to get things done and see the results of your labour.
The complexity of the OKR system you implement depends entirely on the size of your company and how many levels of OKRs you need. Company level OKRs and Personal OKRs are the most used but many companies add department and team OKRs.
In general OKRs should be visible to everyone in the company. This gives employees a clear picture of what everyone is doing. That’s how Google does it.
Apps like Weekdone allow you to set custom due dates for OKRs. That includes setting OKRs for a year.
When setting annual OKRs it’s important to remember that KRs should still be updated weekly and Objectives reviewed every month to make sure employees don’t lose track of what they’re doing.
OKRs have many similarities with continuous performance management. OKRs should be reviewed weekly to avoid discovering that you have no results at the end of the quarter. However, and this is important: you should not grade success based on your objectives. The grading goes on at the Key Results level.
The first question that comes up is: should defining the OKRs happen bottom-up or top-down? There is no wrong or right way in this case. In some cases upper management or the CEO outlines the company OKRs first and then asks team managers to set their team goals in accordance with the company ones, followed by personal employee goals based on team ones.
In other cases, all employees are asked to come up with suggestions for their next quarter’s activities. In both cases, you come together at the team level to reiterate them and add, delete, or modify some of them.
In the end the process moves both ways. You need to go over the company level objectives and personal objectives many times before they work well together.
Revenue-based Key results are great, so whenever you can, use them. They are just like an ideal key result should be: numerical, measurable and objectively gradable.
You can use monetary KRs also in other cases: for profitability goals, sales, average deal sizes and anything else you see in your financial statements or sales reports.
You can use private OKRs at the personal level to measure progress you don’t want others to know about. But remember, others will then not see that you’re making any progress on said goal.
To get the best results OKRs should be aligned to one another. Each part of your company must know what’s going on and how each part contributes to the whole. Our belief is that in order to get all the employees in your company working as one, they all should share an aligned, hierarchical tree of objectives and key results.
The more visible, transparent, and up to date everyday progress is, the better it works. True success only arises if teams do what’s best for the whole company and employees do what’s best for the team.
In general, no. OKRs should not be directly tied to employee bonuses and salary schemes to make sure employees are still willing to take risks and work towards moonshot OKRs.
That being said, OKRs should reflect what tasks the employee is responsible for and many companies correlate OKRs with salary modifiers and bonuses.
Key results measure how far from reaching your objective you are. It adds metrics to objectives. The easiest way to set Key Results is to follow the SMART model. SMART is a methodology that sets criteria to the tasks you set. The KRs must be Specific, Measurable, Achievable, Relevant, and Time-bound. The questions you need to ask for each goal are:
- Specific: is the KR well-defined and understandable for everyone?
- Measurable: can you measure success or failure?
- Achievable: is it realistically possible to do?
- Relevant: is this KR important for your objective?
- Time-bound: have I clearly established when the goal must be met? For OKRs this time is usually one quarter.
For the product team, you can measure percentages of jobs done; for sales, you can measure their success in dollars or another currency. You can also go binary with the “Done-Not Done” scale.
Managers love to set goals. So do CEOs. For employees, however, goal setting and reporting may seem like a waste of time meant to keep them in the office longer.
It’s important to educate and train employees about OKRs before implementing it. It’s vital that they understand how using OKRs helps to make their life easier. OKRs work best if everyone in a company uses it.
OKRs for the remote team work just like they do in an office setting and are a very good methodology to run a remote team. OKRs help to make sure that the members of your remote teams are always up to date with each other’s work and are never out of the loop.
Ask our OKR experts any question about OKR Best Practices.