High-achieving project managers understand the importance of aligning the specific project’s goals, objectives, and outcomes with the overall project vision. It is no longer enough to simply deliver projects on time. Project managers need increased levels of transparency and alignment within the team to improve productivity and growth.
This is where the OKRs framework comes into play. In this guide, we will deep-dive to understand what OKR is and how you can use it to enhance team performance. Let’s start with the basics and understand:
What Does OKRs Stand For?
Quite simply, OKR stands for Objective and Key Results. This tool empowers you to:
- Set, identify, and define goals as well as project objectives
- Identify three or four key results to measure the project performance
- Prioritize tasks and activities, and align them with specific organizational goals for project success
The underlying principles of this framework are transparency, communication, and accountability. Furthermore, what’s important to remember is that every result should be clear, measurable, and precise.
The learning: The OKRs framework empowers you to establish and communicate goals and results within your projects and company at large.
Moving on, let’s look at the OKRs framework with respect to two project management methodologies: scrum and agile.
So, What is OKR in Scrum?
One of the key differences that you need to understand is that OKRs help manage goals and results, which primarily occur outside the company. Examples include product sales performance, number of app installs, etc.
In contrast, scrum focuses on the actions you take inside the company to reach your OKRs goals. You take into account the features from the product roadmap and work towards a common shared goal.
The learning: OKRs provides a bird’s eye-view of the project objectives and results, whereas scrum focuses on micro-management. That said, the two methods complement each other in the way they work.
Next, let’s understanding whether:
Is OKR A Part of Agile (or not)?
For an agile framework to work, project managers understand that business outcomes have emerged as the gold standard for measuring progress. This is where OKRs lends a helping hand. It empowers you to move from Agile-defined outputs (think: features on roadmaps) to the important business outcome metrics.
For instance, agile teams can become laser-focused on the more minutiae tasks like writing code. OKRs provides a more long-term overview of the results and allows you to tie it to the deeper business results. This also allows you to deep-dive and gather more information about the customers, and drive informed decision-making.
In the next section, we will address another important question that might be circling your mind:
Can OKRs and Key Performance Indicators (KPIs) Work Together?
To put in short, KPIs and OKRs do work well together. Let’s say you have a KPI result that requires improvement in your content marketing, this will become the “key result” of an existing or a new OKR. So you can focus on improving the content, advertising, and marketing–which will ultimately enhance the quality of your content marketing initiatives.
Similarly, if your team needs to achieve an existing OKR objective, you may need to create new KPIs. You need to remember that in order to achieve both your OKRs and KPIs, you will need an ongoing dialogue between the managers and employees. At the end of the day, both KPIs and OKRs are important tools for goal management.
The learning: The basic learning is that OKRs will help you to achieve the ultimate inspirational goals you set for your company. KPIs, on the other hand, will enable you to monitor and measure the success, output, quantity, or quality of your project activities and processes.
In the next section, we will look at some key examples of OKRs in project management.
What Are Some Examples of OKRs in Project Management?
Here are a few examples of team-based OKRs you can take inspiration from:
#Example 1: Objective – Successfully launch a pilot version of a product
- Gather real-time feedback from the top-100 customers
- Drive authentic product reviews in 3 trusted publications
- Achieve 50% new sign ups
#Example 2: Objective – Identify problems with the existing customer support system and improve customer happiness
- Drive A/B testing of all features in real-time and gather customer feedback from varied communication channels
- Identify the problematic areas and list down the top-5 pain points
- Reduce customer churn by 50% and maintain an NPS of 9
#Example 3: Objective – Enhance team performance by 50% by Q2
- Identify key problematic areas where the team is struggling in terms of communication, performance, etc.
- Invest in a robust set of tools to boost collaboration, communication, and performance
- Identify the right KPIs to measure team performance and productivity by Q3
You get the drift, right? There are literally thousands of such OKRs you can integrate within your project management based on your project goals and outcomes.
So this brings us to the real question:
How to Set Up OKRs in Project Teams?
Using OKRs in project management is simple. Here are some best-practices to keep in mind:
#1. Set clear and inspiring goals and identify measurable and specific results.
The success of your OKR framework truly rests on how accurate, clear, and reliable your objectives are. If your team doesn’t understand them, the framework won’t work. Once you’ve identified the objectives, work on creating a list of specific results that can help you to achieve said objectives.
Pro tip: Don’t forget to look at your existing projects and identify the objectives they are linked with. Aligning your projects and objectives will help you to streamline your project and ensure that you’re always following the North Star for growth.
#2. Maintain transparency within the team.
If you want your team members to fully (and honestly) commit to the OKRs framework, you will need to instill a work culture of transparency and communication within the team.
#3. Measure your success consistently.
Once you have the project objectives narrowed down, you can focus on defining the key criteria for project success and failure. Remember that you need to simultaneously identify the key objectives and results in order to measure your performance and stay on top of things.
#4. Prepare for failure, always.
Project success cannot be guaranteed. What project managers need to do is prepare the team for instances of failure and motivate the team to do better the next time. That’s why it’s also important to learn from your past experiences and provide constructive feedback when dealing with failed objectives. As long as you’re working together as a team, you’ll be able to lift up the performance sooner than later.
#5. Challenge your team to do better.
Finally, remember that the objectives you set out should challenge your team. Fearing failure and setting simpler objectives will only do your team more harm than good. It is also important to note that OKR is a growth-oriented tool so make sure that your objectives are ambitious to start with.
The learning: If you want to use a ‘motivational tool’ to drive vision-focused project progress, use the OKRs framework to your advantage. By working collectively, you can achieve the shared objectives with greater sense of productivity, efficiency, and effectiveness.
At this point, it is worth answering the following question:
Should OKRs be Tied to Individual Performance?
The short answer is no. Here are three compelling reasons why:
- Unfair evaluation: Since OKRs are inherently collaborative in nature, fairly determining individual performance can become challenging. According to Andy Grove, often considered the Father of OKR: OKR is not a legal document upon which to base a performance review, but should be just one input used to determine how well an individual is doing.”
- Lack of innovation: Using OKRs to analyze performance can lead to a command-and-control style of management, which can ultimately kill your employee’s engagement, productivity, innovation, and risk-taking abilities.
- Output focus: OKRs focus on outcomes, not outputs. However, employee-focused OKRs often tend to lean on individual outputs to make evaluation easier and by extension, inaccurate.
The learning: long story short, OKRs is not a performance requirement management tool. Nor should it be used to evaluation the employee’s performance. Why? Because OKRs are all about the company’s goals and how every individual contributes to said goals. Performance evaluations, on the other hand, are all about how an employee performs within a specific time period and is independent from the OKRs.
What is the Difference Between OKRs Methodology and Project Management?
Both the OKR framework and project management are inherently different concepts. However, they work well together as OKRs define the bigger picture, allow you to measure project performance, and empower the manager to engage in productive project management.
To wrap up, OKRs is an effective framework that enables your organization to set goals and communicate (as well as assess) results in a strategic and organized manner. If you want to improve team performance and project outcomes, OKRs should be an integral part of your project management methodology.