With OKRs your teams will find a better focus and work more autonomously at the same time. Here you can find out everything you need to know about the trend from overseas and how you can establish OKR in your company.
The trend originated in Silicon Valley and is now making its way to us: more and more companies in B2B are recognizing the benefits of OKRs and using them to improve team performance. The key is linking top-down direction from leadership with bottom-up planning from team members themselves. We'll show you why it's so important to formulate OKRs in B2B today and why you should consider implementing them. The goal: More focus, alignment and autonomy for your teams.
Objectives & Key Results (OKRs) are a management leadership method based on clear objectives. The fact that a management sets goals and a team has to implement them and gets orientation through the targets is of course nothing new. The difference is that the teams and employees are involved in defining the objectives and planning the achievement of the objectives. Objectives & Keys Results thus link top-down specifications with bottom-up planning.
Several objectives lead your team to the desired goal. Above all, there is a vision, a strategy or another overarching purpose that must be achieved through partial steps. It is therefore crucial for the objectives to remain achievable in themselves and to appear so, even if the long-term vision is very ambitious. The objectives should give your teams orientation, motivate them and, above all, not act as a deterrent.
Objectives should possess some characteristics to be applicable in the context of OKRs:
Motivating and at the same time challenging
Roadmap to the vision or strategy
have a fixed time frame
are achievable independently of each other
It is important that each team is able to achieve its Objective on its own – regardless of the level of achievement of the other teams. You must pay attention to this when formulating the objectives.
These are typical Objectives as we formulate them for OKR:
“We want to increase our sales with B2B customers.”
“We want to place product X on the market.”
“We want to achieve higher brand awareness with B2B customers.”
With the Key Results, you answer the question whether your team has already achieved the Objectives. After all, you want to know how far you are on your way and whether the method shows success. Keep the following distinction in mind in order not to confuse Objectives and Key Results:
Objectives → qualitative → description of your goal → outcome
Key Results → quantitative → measurement of the achievement of your goal → output
The following characteristics are typical for Key Results:
Measurability
Feedback: are we on the right track?
Take different perspectives
several Key Results per Objective (usually 2-5)
These are some typical key results from B2B practice:
“Through measures X, we were able to increase sales with our B2B customers by Y euros.”
“We successfully placed product X in the trade and were able to generate Y euros in sales with it.”
“Advertising investments amounting to X euros have increased our brand awareness by Y percent”.
Objectives & Key Results are suitable for your company if you are on a fast growth path or are currently undergoing a transformation. Companies that are undertaking digitization projects are using OKRs for the agile leadership methods that are beneficial for this.
The use of Objectives & Key Results is also useful for companies that are on a modernization path and want to overcome time-honored approaches to their business. OKRs were developed in the 1970s in the USA by the chip manufacturer Intel. At the time, the company was facing strong competition and was in danger of going under. Intel developed the OKRs precisely for this purpose, namely to initiate modernization and make the company more dynamic again.
Objectives & Key Results are nothing new, but they have experienced a true renaissance in Silicon Valley in recent years
Corporations like Google rely on OKRs to stay ahead of the competition and adapt more flexibly to new conditions
One of the advantages of Objectives & Key Results is that they are independent of a specific company size. This means that it can be used in practically all companies.
There are three key benefits we associate with OKRs: Focus, Alignment, and Autonomy. Here we go into all three aspects in more detail.
OKRs allow your teams to better focus on the tasks at hand, thanks to clear objectives and frameworks. While OKRs are an agile leadership method, this agility is not to be confused with constant adjustments to plans.
Rather, teams get more consistency for their work thanks to alignment against specific OKR cycles, which are often a quarter long
The team receives the certainty that they can work on their objectives in peace during this one quarter
If the management then limits itself to formulating up to three objectives per organizational level, you benefit from maximum focus.
At the beginning of the cycle, all OKRs are aligned. Even though each team works on its own and independently, all OKRs taken together must implement the defined strategy or vision. So you synchronize the OKRs for the different levels and areas in the company that participate and for which you have created OKRs.
This approach is fundamentally different from the cascading approach often found in other companies. Here, milestones of higher levels serve as targets for lower levels in the company. This runs counter to an agile mindset. Cascades are typical of a top-down structure, whereas objectives in OKRs also work bottom-up. Alignment can thus be seen as the opposite of cascading.
One of the key benefits of OKR is that it promotes autonomy for your employees. You set goals, but not the way your teams achieve them. This starts with involving the teams in the formulation of the goals.
By collaborating, team members feel more committed to actually achieving the goals because they are also their own
With OKRs, it would be wrong to explain to teams step by step how to get to goal completion. OKRs are results-oriented and leave it up to the teams to decide how to approach their task. By using this method, you avoid giving your employees a roadmap to follow.
OKRs are ideal for companies that want to establish a clearly structured process for achieving their goals. The method can release creative energies in your employees. This makes the method especially important for companies that are under strong pressure to innovate or are going through transformation processes such as digitalization.
It is not uncommon, especially in older and larger companies, for a certain inertia to set in overtime. Management and employees in the various departments find it difficult to leave the beaten path. OKRs serve as a dynamizer here, emphasizing values such as autonomy or democratic decision-making. Small companies use OKRs to consistently follow their fast growth path. You trust your employees to reach targets on their own and even involve them in articulating the objectives. If you're interested in agile management methods in your business anyway, you should definitely consider taking advantage of OKRs.