Why are OKRs important? Well, the disconnect between enterprise strategy and the allocation of everyday work processes is a common issue within organisations.
However, an OKR (or Objectives and Key Results framework) acts as the bridge to connect broad company strategy with the achievement of results. OKRs are important because they break down strategic goals into clear deliverables, basically converting grand ideas into measurable outcomes. They unify organisations by bringing them together to work collectively on tangible milestones, and serve those greater goals in the process.
Objectives are the inspirational, qualitative goals which Executive Leadership and Strategy Teams identify for the organisation. Key Results, in comparison, are usually more quantitative, measurable outcomes which track progress towards those objectives. So, OKR frameworks redirect the organisation’s focus to outcomes and metrics, whilst allowing teams a little bit of wriggle-room in how those outcomes are achieved.
OKRs vs KPIs
You’d be forgiven for thinking that OKRs sound like a rehash of KPIs. But there are some key differences:
Whilst OKRs are outcome focussed, KPIs (or Key Performance Indicators) are performance focussed. Generally, KPIs are concerned with the long game, so they can track the performance of a particular process and activity over time, and measure that against organisational goals.
OKRs, by contrast, align teams and individuals towards common, short-term goals. The OKR framework measures how the organisation is progressing towards specific objectives which have set timeframes. OKRs define what an organisation wants to achieve, while KPIs measure how well the organisation is moving towards those goals.
Why are OKRs Important for I.T.?
I.T. may not be the first department you think of when implementing a new OKR framework, but it shouldn’t be overlooked. Organisations are significantly dependent on I.T., so work produced by the I.T. department is often inseparable from Key Results in an OKR plan.
For example, if your company’s strategic Objective is improving customer satisfaction, then improving the user experience of your website, or reducing load times, could be a Key Result.
Likewise, if increasing sales or conversions is the Objective, then working with your I.T. department to increase the reliability or running capacity of its systems is a logical Key Result.
Alternatively, if reducing operational costs is the Objective, then utilising digital processes or automating tasks could both be Key Results – all of which, of course, involve the I.T. department.
So, considering your I.T. department when determining OKRs will significantly improve the quality and timeframes of their delivery.
How to Write OKRs
OKRs are a powerful goal-setting framework used by organisations to align their teams around a common set of goals and track progress towards achieving them. So, to write effective OKRs, start by identifying a high-level objective that is specific, measurable, and time-bound. Your objective should articulate what you want to achieve and provide a clear direction for your team. Once you have identified your objective, break it down into a few Key Results that will help you measure progress towards its achievement. Your Key Results should be specific, measurable, achievable, relevant, and time-bound, and should provide a clear indication of whether or not you are making progress towards your objective. When writing your OKRs, make sure to prioritise quality over quantity, and limit the number of objectives and key results to ensure that your team is able to focus on what’s most important.
It’s also important to involve your team in the goal-setting process. By doing this you can ensure that everyone is aligned around the same set of goals, and that everyone understands their role in making them a reality. And this is why OKRs are important for building collaboration in all types of organisation. By making sure OKRs are regularly reviewed and adjusted according to the organisation’s progress, you can write OKRs that help your team stay focused, motivated, and aligned around a common set of goals.
OKRs at an Enterprise Level
By their very nature, large enterprises face unique challenges in forming and sticking to OKR frameworks, but the benefits definitely outweigh the trouble. Big organisations incorporate a wide range of functions and are prone to lower visibility, disunified efforts to reach business objectives, and a lack of consistency across enterprise activities.
However, OKRs can take the company strategy outlined by Executive Leadership and provide coherent ways to align its employees towards its achievement. The OKR puts in place coherent processes and timelines that guide your operations, whilst instilling a sense of ownership and responsibility among teams.
By breaking down company strategy into Key Results, every employee is seen to be contributing directly towards the greater goal. This can encourage versatility and innovation, as well as a culture of accountability and transparency.
Nevertheless, implementing OKRs is challenging. It requires clear communication, strong leadership, and a willingness to drive significant change at an organisational level. And this is where Portfolio Project Management comes in very useful.
How Project Portfolio Management and OKRs Work Together
The creation of OKRs often falls to the Project Management Office (PMO). Project Portfolio Management, or PPM, is a management process that realises company objectives at optimum efficiency by prioritising activities and outlining how they will be best achieved. PPM aligns all projects with the strategic goals of the organisation, and executes them in a way which maximise benefit and minimises exposure to any risks. Key features of PPM include portfolio analysis, project scheduling, resource allocation, and benefits management.
With PPM, projects are aligned with strategic goals, potential benefits are identified and prioritised, project methodologies and governance are established, and KPI’s (and all performance metrics) are agreed upon. In this way, PPM unites the ‘top-down’ messaging from company management with the ‘bottom-up’ (project level) division of tasks and responsibilities.
Doing the Right Projects and Doing them Right
So, PPM bridges the gap between enterprise strategy and daily work processes by providing the architecture to deliver key results. As a vehicle to realise your OKR, it helps all work divisions prioritise the right projects – and plan how to ‘do those projects right’. Teams are clear on their deliverables, timelines and governance, and employees are collectively focussed on achieving outcomes that serve strategic goals.
PMO365 is a Microsoft preferred PPM solution that is designed to enact your OKR plan. It harnesses the immense power of the Microsoft Power Platform to optimise the Project Portfolio with real-time data and integrations, bringing every work function under the same umbrella. A comprehensive library of Apps, Flows, Reports and Connectors created from over 15 years’ experience in the delivery of PPM solutions, provides business tools for portfolio analysis, project scheduling, risk and benefits management, and much more. PMO365 also integrates with virtually any Microsoft or non-Microsoft software and delivers tailored configurations to suit every kind of project or program delivery.
See how PMO365 will help your company achieve its strategic objectives.