OKR: what is it, how the methodology can help your company and examples for you to implement

The method gained fame for supporting Google’s growth – the company went from around 40 people in 1999 to over 60,000 today, showing that it can be used by both small businesses and large corporations.

It is not new that planning and execution of business strategies are some of the main challenges for organizations. In the context of globalization and with the extremely competitive scenario in which companies are currently inserted, having a well-consolidated strategy is essential for the organization to function.

Despite this, many companies still do not give the necessary importance and attention to the matter because they believe that business strategy is limited to generating profit.

Putting it in the context of SMEs (Small and Medium Enterprises), the lack of strategic management is one of the main reasons for companies’ bankruptcy, according to Sebrae.

Although uncommon, for a short period some companies manage to achieve success without, however, having a formal model of management methodology. This is because, in some cases, the strategy is well defined in the heads of the company’s founders. Added to this, too, is the direct communication of those who work and a leaner team, which facilitates the alignment of employees with the company’s culture and strategy.

Funneling this scenario to the Marketing area, we also find many companies not being able to prioritize marketing actions based on the results they can generate and not having clear objectives to measure the success of the strategy.

This article will address the importance of an effective management methodology, why traditional methodologies no longer work, what is the role of OKRs within a Marketing operation, and how to implement it in your company. Check out!

The importance of a management methodology

The increase in the team and the company’s growth are beginning to generate certain challenges for managers, especially in terms of communication and externalization of the company’s strategy.

In fact, a study conducted by Leadership IQ  of 400 companies revealed that only 15% of employees believe that their activities directly contribute to the company’s goals.

For the sustainable growth of an organization, it is essential that all employees know how to answer some questions such as:

  • What are the company’s priorities today?
  • What am I doing to achieve the organization’s goals?

For many years, numerous methodologies have emerged in order to solve this problem.

In the 50s, Peter Drucker, already said: “what cannot be measured, cannot be managed”, and developed methodologies such as the APO (Management by objectives)  and theories on how to have good management and performance of the organization.

In the late ’80s, Harvard professors Robert Kaplan and David Norton created the BSC (Balanced Scorecard)  – which consists of a tool with the purpose of clearly showing the company’s objectives divided into 4 main perspectives: Financial, Customers, Internal Process and Learning and Development.

In Brazil, we also had great scholars on the subject, such as Vicente Falconi bringing the concept of Management by guidelines.

With each theory having its own particularity, what they all have in common is trying to bring, in a visual way, their metrics so that it is possible to monitor them in order to efficiently improve the company’s performance.

Why don’t traditional methodologies work?

Traditional methodologies worked very well over a period of time and are still widely used in specific branches of the industry today.

Despite appearing to be simple and efficient solutions, there is a high complexity in their implementation that can affect their success – even more so at the present time, with the “new normal” that we are living.

Traditional methods end up making it difficult for all employees to understand the company’s priorities, since they are extremely systematic, having high rigidity in their implementation and execution.

In addition to being a factor of misalignment, this lack of understanding can be a major cause of disengagement and lack of productivity within the organization, according to Gallup, resulting in unreached goals and stagnation in the company’s growth.

As an example, when searching Google Images for “Balanced Scorecard”, we obtain the image of the strategy map presented below, which shows how much these methods do not indicate in a simple way the company’s strategic objectives and how they unfold in areas in the short, medium and long term.

How to act to circumvent this sudden change?

Bringing it to marketing, let’s assume that the market changes during the year and your company already has a well-defined strategy. With a traditional methodology, your company would have two options:

  1. Follow this plan to the end, even if it doesn’t bring results;
  2. Completely change the plan, however, making it difficult to measure the success of the annual performance.

Thus, agile companies realized that they needed a less systematic and leaner form of strategic management. This new method should add clarity to the company’s objectives, quickly for continuous learning and in a simple and transparent way for the management of the company and the team. With that in mind, the OKRs were created.

OKRs: what they are and how to implement them in your company

As more and more startups and innovative business models emerge, different management methods are created to keep up with the fast and dynamic pace of this scenario.

The Objectives and Key Results (OKR)  were created by former Intel CEO Andrew S. Grove but became better known when, in 1999, one of Google investors John Doerr, presented the methodology for the company’s employees around a ping pong table.

(Yes, all Google employees could fit around a ping pong table).

The method gained fame for supporting Google’s growth – the company went from around 40 people in 1999 to over 85,000 today – showing that it can be used by both small businesses and large corporations.

In a simplified way, Doerr established the formula for setting goals being like:

“I will” (Objective)

“measured by” (key result set)

In other words, in OKRs we have two main components:

  • Objectives (O): a concise statement of the company’s desired direction. A good goal has to be vividly described so that people can imagine how impactful it will be to achieve it.
  • Key Results (KR): goals with a direct impact on the achievement of the objective if it is successfully achieved like Blue World City

The goal is qualitative and the KRs (most often between 2 and 5 for each goal) are quantitative.

While objectives should be concise, clear, and aspirational to always be in the collaborators’ minds, key results are used to indicate whether the objective has been achieved by the end of the period – typically quarterly for tactical OKRs and yearly for strategic OKRs.

They are used as a very effective management and communication tool as they help create focus and align the entire team effort around a challenging goal.

Digital Results began using this methodology in early 2016 and, since then, it has been obtaining very satisfactory results.

These effects come not only from compliance with key results but also from process improvements:

  • Weekly reports for the team and planning of OKRs every quarter ;
  • Simpler and more objective writings in the Key Results, the definition of few goals to improve the focus;
  • And, above all, learning and correcting the direction with the mistakes made.

But why is the OKR methodology different?

One of the most interesting aspects of the OKRs is the fact that the model is not systematic and has several inflexible rules, such as traditional management methodologies. In creating the methodology, Andrew S. Grove did not indicate specific and rigorous practices of what should be done for it to be successfully implemented.

In fact, most organizations adopt certain details of the methodology to the company’s reality and follow best practices and success stories of a growing collaborative community that already uses OKR.

In addition, we can list six main differences between OKR and traditional methodologies :

  1. Your goals are set for a shorter period of time, being more tangible where you can reach and also allowing you to quickly correct a mistake.
  2. The clarity and simplicity of objectives and key results are the basis for the methodology to generate high team engagement.
  3. Key results are reported weekly, making it possible to anticipate the end of the quarter and bounce back to reach the established goal. If not successful, learning and iteration will be over a quarter and not over a full year, as in traditional methodologies.
  4. In order to facilitate alignment, OKR is a tool that prioritizes transparency. All employees can see the company’s OKRs. In addition, the directors clearly spell out what the company’s priority is and how this will translate into key objectives and results.
  5. OKRs reinforce the data-driven culture within a company – as it is at Resultados Digitais – as they make decisions based on data. Several analyzes end up gaining priority and becoming OKR in the following quarter. In order to achieve the goals, a project is planned and developed according to its own project methodology.
  6. When using OKR, you will measure the result and not the effort of the tasks, as it is commonly found in companies that use traditional management methodologies. To achieve great results, great efforts will be needed. However, dedication alone will not make you reach your goals.
  7. However, it was useless to have all the stats favorable (effort) if the team could not turn them into goals (results). Chelsea was more efficient, generated more results and was awarded a place in the final, eliminating Barcelona – who were favorites, according to football commentators and bookmakers.
  8. Despite these advantages mentioned, the methodology, like any other process within the company, does not generate results without the engagement of everyone who works there.
  9. The greater the effort in planning, executing, and monitoring employees, whether they are managers or individual employees, the faster will be the perception of impact and generation of results.

Execution and monitoring of OKRs

  1. This is considered the most important part of the entire process, as it will be useless if you have planned and performed several analyzes if the execution is not well done. Tracking goals is the best source of information to know if the execution is as planned – and, if not, to take actions to reverse this scenario.
  2. At Digital Results, as a way of aligning the team and so that the execution goes according to plan, we measure the key results weekly and, over the years, we have developed some processes and tools to help us with the planning and communication of the OKRs.

Ceremonies

For the good execution of the methodology, there are several ceremonies during the quarter for planning, the definition of OKRs, and presentation of results. Thus, the first step in implementing the methodology is for the executive body to define the company’s annual strategic OKRs.

After that, we have the ceremonies that take place every quarter. With the strategic OKRs defined, the areas discuss what their priorities are in the quarter to help achieve the company’s goals.

Once this is done, a schedule of OKR deliveries and ceremonies is defined:

  1. The first ceremony is held when the director brings the area’s vision for the quarter, already aligned with other areas of the company to generate synergy to the work.
  2. The second ceremony is a seminar with team leaders outlining each team’s vision and alignment.
  3. Based on these first two events, teams draw up an outline of the OKRs that will be presented in the next step. This step is a presentation of the outline for the entire area, known as “drop fire”, where the leaders present the outline of the OKRs and everyone in the area can question and give feedback to improve them.
  4. The next step is to make adjustments according to the feedback received, leaving everything ready for our main ceremony: the Presentation of OKRs and Projects.
  5. In this last ceremony, the results of the last quarter, the OKRs of the next quarter and the projects that will make the company achieve the key results are displayed for the entire company. This stage, in addition to being the watershed for the quarter, is extremely important for the executive body to communicate clearly and transparently with all employees about the results achieved and the priorities of each area, generating greater team alignment.

Dashboard

Once the OKRs are defined, there must be someone responsible for the weekly measurement of each KR in the area. The main objective of carrying out the weekly measurement is to react as soon as possible if things do not go according to plan.

For example, if the KR is to increase the qualification rate from 50% to 80% and it stays at 50% for several weeks, it is very difficult that, at the end of the quarter, this KR will be reached. Thus, it is quickly observed that the KR is not converging on the target projection and action is taken to change the panorama.

The RD Dashboard is the place where the weekly performance of each key result is entered, making it possible for all employees to have a complete overview of the company’s progress. On the Dashboard, the tabs will show the OKRs for each area with definitions of how it is calculated, measurement frequency and extra comments.

In addition, for each Key Result, its progress against the target value is calculated and also the QTD ( quarter-to-date ), which is basically the calculation of how the KR is in relation to the projected target value for the day. current considering that the progression is linear.

For example, if KR is selling 10 new accounts and mid-quarter the current value is 5, the progress is 50% and your QTD is 100%.

Communication

The dashboard is available to everyone in the company and can be accessed via Google Drive. However, like many documents on your own computer, it can get lost in the world of Cloud Computing, is rarely accessed by employees and having little effectiveness in communicating, aligning and monitoring the company’s goals.

To ensure that the OKRs are in everyone’s daily lives, we have developed communication tools both online and offline, such as:

  • OKRs visible on walls;
  • Weekly reports;
  • Notifications on Slack ;
  • Quarterly reports.

OKRs across the company:

Before the ceremony to present the OKRs for the next quarter and the results of the past quarter, a report is prepared to contain all the objectives and key results of all areas of the company, with the appropriate comments from the director of each area on the performance of your team in relation to each OKR. This report is intended to emphasize the company’s strategic transparency with its employees and prepare them for the beginning of the quarter ceremony.

BONUS: OKR Examples for Inbound Marketing

Now that you know how to build and align your OKRs, let’s go to OKR examples for Inbound Marketing that you can use to inspire your builds. They were proposed by the CoBlue team, a company specializing in continuous performance management and OKRs.

Example 1:

Goal: To have the best blog in the segment
KR1: Increase the number of subscribers on the Blog by 25%
KR2: Have 20% more time spent on page X
KR3: Increase 15% in shares of Blog content

Example 2:

Goal: Make it “rain” Leads and Opportunities
KR1: Increase demo orders by 20%
KR2: Increase eBook X conversions by 10%
KR3: Generate 3000 Leads from rich new material

Example 3:

Goal: Build the best email marketing
KR1: Increase eBook download via email click-through by 25%
KR2: Increase demo requests via email marketing by 10%
KR3: Make 20% of newsletter readers convert to demo requests

Example 4:

Goal: Optimize email flows
KR1: Increase email flow open rate by 10% for eBook X
KR2: Increase click rate on email CTAs by 10%
KR3: Benchmark Email Flows to mine segment

Example 5:

Goal: Improve our SEO
KR1: Do 6 X keyword
link building with industry partners KR2: Release rich material focused on X keyword
KR3: 100% Optimize Blog Text for SEO

Conclusion

OKR came to help management in a simple and agile way, being a great communication and alignment tool for the company. It is important to point out that just saying that the company uses the methodology because it is “in high” will not generate results.

In the first quarter of OKR implemented at Resultados Digitais we had 84 KRs. Today we have a few more than half, as we realize how few (but good) goals end up delivering a clearer message to the team.

In the course of the other quarters, we established the ceremonies, the processes, developed reporting scripts and we pursue this continuous improvement every quarter to achieve even greater results.

Today, RD‘s entire Digital Marketing strategy is measured through OKRs. So, we know clearly:

  • What are our goals;
  • What are the results we need to achieve;
  • What is the progress of each one of them?

In case we happen to be behind on some goal, we are able to act quickly to get around the situation and create new alternatives to guarantee the achievement of the goal.

Like every agile method, you have to be ready to fail (a lot). However, with a lot of effort and continuous improvement, the results and routes are corrected faster and faster and the results start to emerge!

Is that you? How do you measure your company’s results? Have you had any experience with OKR or are you thinking of implementing it?

If you have questions about OKR, especially about how it would work in your company, send an email and we talked to: thiago.rocha@resultadosdigitais.com.br. I also have this text in English on my personal blog.

In closing, I recommend that you also check out our Digital Marketing Strategies Kit for High-Growth Companies. In it, we gather eBooks, tools, and webinars that will help you find strategies to plan your company’s Marketing and Sales actions, manage Leads, and expand your results in a predictable and scalable way through Digital Marketing.