Shared Goals
A unifying goal can galvanize and align leaders across locations, disciplines, lines of business and functional areas. This is powerful because it can create an environment where collaboration between people generates positive interaction and positive results. People work with one another instead of at cross-purposes. They are able to focus instead of spreading their attention or losing interest.
These goals are incredible tools for leaders to provide their organization and be amazed with the results. In my experience and looking around the industry, I feel there’s an opportunity to clear up some confusion about how these goals can be set, what they might look like, and how they might be used afterwards.
What comes to mind when you hear the word goal? For me, it’s things like: bucket lists, career goals, health goals, financial goals, etc. In an organization, you might hear terms such as: strategic goals, annual goals, performance goals, outcomes, KPIs, and SMART goals to name a few. Let’s narrow the focus a bit to OKRs, which stand for Objectives and Key Results.
Enter OKRs
OKRs are a structure to describe goals and have received a lot of attention in recent years. If you choose to use OKRs, be aware that writing and using OKRs is a skill which takes practice to become effective. You cannot expect instant success.
What does an OKR look like? How many should you have? How many key results per objective? How do I know if the objective or key results are good? Writing OKRs is very nuanced, so we will explore these questions over a series of articles. In the remainder of this article we will focus on the first two questions.
Anatomy of an OKR
OKRs come in two parts: the objective and the key results. Objectives are short descriptions of a goal, or outcome you hope to achieve. They are action oriented, starting with a verb.
Key results provide measurable proof that you have achieved the outcome. John Doerr’s OKR formula is useful to help you get started.
We will [objective] as measured by [key results].
For example, We will become the market leader in analytics, as measured by:
- 20% of our closed sales will include analytics products
- 40% of our data will help customers make better decisions
- 90% of insights generated from our data will be accurate
The belief is that those 3 conditions provide evidence of being the analytics leader in that company’s market. Meeting those means the goal has been achieved.
How Many is Too Many?
The intent of OKRs is to create alignment and focus. Less is more. When we use the term OKR, we are really talking about a single objective with a few key results. As the number of OKRs increases, alignment and collaboration between different parts of the organization decreases, negating the benefits of having them. As a rule of thumb, between 1 and 3 OKRs are few enough to support focus and collaboration.
Let’s look at a few realistic scenarios modeled after those seen in large organizations. For each scenario, we will describe the motivation to have the full set of objectives and how the objectives limit alignment and collaboration. These scenarios are also good examples of OKR people create when they start their journey towards effective shared goals.
Scenario 1 – Performance Pillars
When creating your first OKRs, it’s very common for senior leaders to select performance characteristics that define their success as an organization. These are easy for people to agree upon. After all, scoring well in these performance characteristics means you’re doing well.
The following example is for a shared service organization in a large, enterprise company. They perform work for other organizations in their company while maintaining a focus on customers of the company.
They came up with the following objectives:
- External Customer Satisfaction
- Internal Customer Satisfaction
- Increase Revenue
- Decrease Expenses
- Manage Risk
Despite what look to be a reasonable set of objectives, there are some flaws — starting with the number of objectives. Let’s assume these objectives are for the calendar year. We hope to achieve all of them by year’s end.
Here’s a summary of the challenges the number of items present:
- How do you pick which of them to prioritize? Some departments may naturally gravitate towards one or another, but what if you don’t? How do you decide? Where do you even start?
- How much do you invest in each one? How much impact can you make? This many objectives treated equally runs the risk of diluting the results you can produce in each of them.
We will cover the quality of these objectives later. For now, realize the number alone is an issue. Here’s what you can do to address some of the challenges.
First, if you are unable to narrow down the number of OKRs, then rank them. Ranking them, will help provide focus and attention on objectives at the top of the list. It’s very likely that as time goes on, one or more OKR will drop from the list as you realize you won’t achieve it — naturally.
Second, make a distinction between performance indicators and goals. I like to think about it this way, goals are things you have not achieved but are important enough to put significant time, effort, and attention to achieve. Performance indicators demonstrate how well you’re doing in particular focus areas. They are always relevant to monitor, but may not always need attention — your scores may already be acceptable. By recording these indicators separately, people may be more willing to let them go as OKRs, knowing they will be able to monitor KPIs to ensure acceptable levels of performance.
Scenario 2 – The Oprah Effect
You get an OKR, and you get an OKR, and you get an OKR… In this scenario, senior leaders in an organization arrive at a set of OKRs that separately match what their part of the organization can deliver. Much like the last scenario, it’s very natural and easy to create OKRs that fall into this pattern. First, leaders independently like that their organization will directly contribute to a goal when they have one designed to match their focus and strengths. When you have a hard time seeing how your part of the organization will support an OKR, it is not only unsatisfying for you as a leader of that group it can also feel threatening to your importance and influence among your peers. Second, agreeing to these OKRs is easy because other OKRs often don’t impact your own so you don’t mind that they exist because nothing is required from you.
This scenario avoids some of the previous challenges by maintaining the status quo for focus and investments. The unique challenge here is there is no shared goal for the organization, lacking alignment and cohesion. There is little or no reason for them to collaborate with each other — limiting their impact to only what each alone can offer.
Limiting the number of OKRs from this set is more challenging because it may not be as simple as pairing down the list. In order to resolve this issue, you have to up a level — identifying common ground across departments and goals they can each contribute toward. I find every organization has some natural synergy between at least two departments. Finding these obvious pairings is a good way to organize around new OKRs.
For instance, user experience and mobile and web channels are a natural pairing. Knowing that, you can look at Humanize Experiences and Serve Customers Across Channels as candidates to be combined.
In this case, take the broader objective, Humanize Experiences, and fold elements of the narrower one, Serve Customers Across Channels, into its key results. By combining these, there is now one goal towards which they can contribute and report their progress. The key results now become the focus for these groups and how they can achieve them together. The objective is to Humanize Experiences, so any work done to serve customers across channels is done with a personal touch in mind.
You can take the same approach by combining Increase Platform Performance and Operate with Efficiency resulting in a list of three OKRs for the organization, as shown below.
Scenario 3 – Themes
Themes is a term I use when organizations create objectives without key results. Their makeup could fall under either of the previous scenarios, although more likely the latter. When leaders identify themes they are often for the coming year and there are usually a handful of them.
Themes are a low risk, low investment entry point for organizations whose leaders are not yet ready for OKRs are a more structured way of goal setting. Perhaps they could be renamed proto-OKRs, since they are considered a precursor.
Themes do convey a notion of what’s important. In companies and organizations where communication from leaders is lacking, even the introduction and sharing of themes can have a positive impact on the people within it. Moving from themes can be as simple as adding key results.
How Many is Too Few?
Zero. If you don’t have clear shared goals, you’re probably already familiar with the impact it has on focus, morale, and relationships.
There is nothing wrong with having a single focused objective for people to rally around. Each objective has key results that can be supported broadly or individually, by people in your organization.
Summary
Shared goals can support organizations making a bigger impact, focus and meaning for employees, and improved relationships. OKRs are a commonly used technique for capturing and communicating these goals. In order for them to be effective, limit your number of OKRs.
We’ve reviewed some common scenarios where people create a handful of OKRs. It should be noted that there is value in allowing people to go through a natural progression of defining OKRs. The goal is not to avoid all of the scenarios we described, but to identify them as possibilities and express a path to improve from there. In the next article in this series, we’ll shift from the quantity of the OKRs to the quality. It’s there we’ll take a closer look at key results which provide the key to business agility.
