One of the biggest challenges organisations face today is spending 80% of their time IN the business, and only 20% spend time ON the business. To overcome this challenge, organisations must strategically plan, using goal setting frameworks like OKRs and KPIs to enable long-term growth and success.
Business is challenging, especially during difficult economic times like these.
As a result, business leaders and senior executives are all looking to improve performance, minimize errors and seek out new and novel ways to gain the edge over their competition.
Ensuring that our goal setting frameworks are being applied correctly and are aligned to the ultimate business dream or organisational vision, are vital for success.
I’ve found that OKR’s and KPI’s are an extremely effective framework for measuring success of a team or organisational, however I all too often see these frameworks being applied in the wrong way leading to a lack of clarity and understanding of the goal.
So what is the difference and how can they be allied to get the most out of them?
OBJECTIVES & KEY RESULTS – OKR’s
Objectives & Key Results or OKRs are just one framework of goal setting
Just like other goal setting frameworks, they can be applied to a company’s mission in order to increase the chances of delivering the goal.
John Doerr helped Google implement OKRs and he boiled it down to one sentence that explains how they work:
I/We will ___(objective)___ as measured by __(these key results)___.
So they represent two basic concepts, what do you want to do, and how you’ll know when you’ve achieved it.
KEY PERFORMANCE INICATORS – KPI’s
KPI’s are a set of metrics relating to an aim or goal.
So, when we are talking about metrics, we are talking about numbers, and when we tie a metric to a specific key business objective becomes a KPI or Key Performance Indicator.
To simplify this we can think of when we’re not feeling very well and we go to the doctor, the objective is to feel well, so we will explain to the doctor some of the symptoms we are feeling, he will ask you what is wrong and will listen, but he’s immediately searching for evidence to qualify your subjective opinion and one of the first things he will do is to take a set of metrics or KPIs. This will be in the form of temperature, blood pressure, heart rate, a blood test which will show up cholesterol, blood sugar levels etc etc
So KPI’s are simply a set of metrics linked to an objective.
So why do we need a goalsetting framework anyway?
At the top of any organisation there is a vision the vision is the ultimate dream, below that, many organisations will have a mission, a set of rules or ethics that they want to operate by, accompanying that will be a mission statement which sets out what they do, who they serve, how they serve them, so this mission clarifies the vision to the employees, shareholders, it basically sets out the morals values and ethics of the organisation.
Below that level is a strategy, this is a 12-to-36-month period of how the organisation plans to manage the reality of now towards the mission and vision. The strategy is what sets the company apart from its competitors, what makes it different, either in what it does or offers, or the way in which it does it.
Most organisations will go straight from the strategy to the daily tasks.
They won’t bridge the gap between the two, and this is where goalsetting frameworks, whether they are OKRs, Smart Goals, or whatever they use, these are vital to the company or organisation hitting their ultimate vision.
So, a goalsetting framework links your strategy to your everyday tasks.
How to apply them correctly
4 Golden Rules to use ORR’s & KPI’s to be successful:
Whether you are in the office or working remotely, I believe leaders should hold a performance cycle meeting for the team at the start of the week, Monday morning that covers the following.
An end of week Friday Focus Meeting is a good way to end with reflection but keep these meeting’s short and try and add a 10 minute wind down chat at the end, unrelated to work, where you simply ask others what they’re up to over the weekend, it’s amazing how far it goes just showing a bit of interest in someone else’s home life.
Try these with your team and with all things new, accept that these take time to really implement and the more you do the better you get.
For advice on how to apply to your organisation contact me at firstname.lastname@example.org
Article Written By
The Goal Setting Coach