Project Management ABC: O for OKR

Project Management ABC: O for OKR – Part 2: Application

Properly phrasing of objectives and key results

In order to be able to work in a focussed manner, not too many objectives should be defined; therefore, as a rule, a maximum of five objectives per organisational level are set. It is also important that it must be possible to complete the selected objectives within one OKR cycle, i.e. within approximately three months. However, OKRs should be formulated ambitiously so that they do not have to be fully achieved. A value of 60 – 70 percent of target achievement is therefore considered satisfactory.

«If you set crazy ambitious goals and miss them, you’ve probably still achieved something remarkable.»

Ken Norton, Ex-Director of Product Management at Google

An objective describes a desired future state and should have a motivating effect on all participants. Each objective is assigned two to a maximum of five key results that make the degree of goal achievement measurable. The KRs are therefore quantitatively measurable and conclusively assessable key figures. Therefore, they should be formulated SMART, i.e. specific, measurable, attractive, relevant and timed.

Helpful for the formulation is the OKR formula:

“We will {Objective} as measured by {Set of KR}.”
(Wir werden {Objective} gemessen an {Key Results}

How does the OKR cycle work?

Basics

The OKR cycle consists of OKR Planning, OKR Refinement, Weekly OKR, OKR Review and OKR Retrospective. It is important to note that during an ongoing cycle, the existing OKR rules may not be changed and the team’s commitment does not change during this time. What is special about the OKR is that the goal setting and review is done in a fairly short period of time of about three months and the staff are actively involved. As soon as one cycle ends, the next one begins immediately.

1. OKR Planning – one-time at the beginning of the cycle approx. 4 hours:

At the beginning of a new OKR cycle, OKR Planning defines the objectives and key results at all organisational levels for the coming months. However, shorter or longer periods can also be chosen if necessary. In this phase, the organisation-wide OKRs are first formulated and presented to the staff. The company’s vision, mission and moals are included in this process. Then each individual team develops its OKRs. Keep in mind that the different teams or departments of a company should share their OKRs transparently, otherwise unforeseen dependencies, duplications or conflicts may arise. In this way, about 40 per cent of the goals are set top-down by management and 60 per cent are developed bottom-up at the operational level. As a result, employees identify with the goals and are intrinsically motivated.

2. OKR Refinement:

The next step is to maintain and improve the OKRs. For this purpose, a refinement meeting usually takes place in the middle of the cycle so that it can be checked whether all objectives and key results are comprehensible and still up-to-date.

3. Weekly OKR – approx. 15 minutes per week:

In addition, there is a weekly meeting that serves to exchange information about the current status. In this meeting, staff can briefly report on the current status, what the next steps are, if there are any problems or if support is needed.

4. OKR Review – once at the end of the cycle approx. 4 hours:

At the end of an OKR cycle, the results are presented in the OKR Review and evaluated with regard to the objectives. The key results show to what extent the objectives have been achieved. In addition, an OKR Review can be used to summarise what was learned during the cycle and what consequences should be drawn from it.

5. OKR Retrospective – once at the end of the cycle approx. 2 hours:

The retrospective is important for the continuous improvement and development of an organisation as it reflects on the cycle. This meeting not only marks the end of a cycle, but also reveals obstacles in the team that stand in the way of achieving the goals, as well as factors that promote the achievement of goals.wie Faktoren, die die Zielerreichung fördern. In this way, potential for improvement is uncovered and the team decides what should be changed in the next cycle. The OKR retrospective thus serves as a basis for Lessons Learned. Afterwards, a new cycle begins seamlessly.

Application in project management

Projects are also a way to achieve the company’s set goals. If your company uses OKRs, they can be used to ensure that the projects that are implemented support the corporate strategy, mission statement and goals. However, OKR can not only help in selecting the right projects, but can also be applied in project management itself. On the one hand, it can be used to set the project goals, which are then followed up in a regular OKR cycle. This is particularly useful for agile projects. In especially complex projects, OKRs also provide good orientation and thus help to maintain an overview of sub-projects and goals.

Areas of application

Because of the short cycles, the OKR method can be used well in agile organisations – and in any size of company. The method can be used for the whole organisation as well as in individual teams and departments, and for specific products, projects or developments. OKR is also suitable for use in various phases of a company’s life cycle. Thus, the method can help both in the founding as well as in the development and management of already established companies.

Tips

• Cycle length: The length of a cycle depends mainly on your company and the dynamics of the environment. For example, it may make sense to implement a 12-month cycle for the top level, i.e. higher-level, long-term goals, with a 3-month cycle for all other company levels. It is important that the length of the cycle is repeatedly checked in the OKR retrospective to see if it is reasonable and is adjusted if necessary. A cycle is chosen too short if the goals cannot be achieved by the end of the cycle and too long if the goals are no longer relevant at the end of the cycle or the focus has changed.
• Openness: In order for OKR to work, employees and managers should be open to this method so that they are motivated to contribute to the company’s goal development. Otherwise, due to the high transparency of the method, discontent could arise in the company. At the same time, it is important that management stands behind the method and trusts the employees as they set their own goals.
• No evaluation: The fact that all goals are disclosed should not be perceived as a control, as this could have a demotivating effect and also entail the danger of manipulated or embellished results. Therefore, it is also not useful to use the set targets for staff appraisal.
• Ambitious goals: To be truly motivating, OKRs should be ambitious and set high so that they do not have to be fully achieved. However, they should still be achievable, as otherwise they have a demotivating effect. A level of 60 to 70 per cent target achievement should be a realistic expectation.

Conclusion

OKR offers companies great potential. The short cycles and regular reviews enable a high degree of transparency and flexibility, so that it is possible to react quickly to changing conditions or needs. With some practice, the OKR cycle quickly becomes routine and ensures that your company goals are achieved as well as your employees are motivated.

Learn more about the project and portfolio management software myPARM:

Would you like to get to know myPARM in a demo presentation? Then make an appointment with us right away!