Rethinking Goal Setting (a primer on OKRs)

If you're like many leaders, every year you have big plans for your organization and lots of good intentions.

Yet, there’s likely a nagging voice in your head that asks, "What’s going to be different this year?" Especially if the previous year's goals were met with mixed success.

There's no need to carry the baggage of old approaches into a new year – and letting go of that baggage might require reexamining the way you're setting and measuring goals and objectives.

In fact, a client prepared to do some rethinking asked for my thoughts about Objectives and Key Results (OKRs). OKRs were made popular by John Doerr, general partner of Kleiner Perkins, and while they aren’t anything new (they’ve been used by Intel since the 1970s), they are still in play today at innovative companies like Google, Uber, LinkedIn and Twitter.

After conducting further research, I decided to give OKRs a whirl myself and now use them for my own annual business planning and goal setting. So far I've found the OKR approach to be an elegant solution that has enhanced my clarity and focus around setting my company's objectives each year.

ACTION STEPS

Even if you’ve completed this quarter's goal setting, go back and use the OKR approach to see if it helps increase clarity, focus and collaboration among your team. Here’s how:

Establish an objective: The objective should be inspirational, qualitative and something you can achieve in three months. Don’t include metrics in the objective. If it takes you longer than three months to achieve than it’s not an objective – it’s your strategy or mission.

Identify the key results: What will you achieve in pursuit of the objective? Key results should be focused on the following: growth, engagement, revenue, performance and quality. These should be quantitative, supported by metrics and typically organizations set three.

Set a confidence level for each key result: On a scale of 1 to 10, how confident are you? A score of 1 indicates low confidence (it’s never going to happen), while a confidence level of 10 means you’re sandbagging. Look for a level where you're pushing yourself and have 50/50 shot of failing.

Review your key results: If doing so gives you a funny feeling in your gut, and you're thinking it would take a miracle to achieve all three of these, then you’ve probably set the right key results. If you're saying, “We’re doomed!” then they’re too difficult. If you're saying, “We can hit all three of these with some hard work,” they are too easy.

Remember – be honest. You won't get the focus and clarity you're seeking through the OKR approach if you're not.