The reason why your company isn't scaling and how to fix it
November 11, 2021
Table of contents
Ever wondered what's in common between Google and Netflix? Well, one starting point could be that both companies evolved from a modest setup to global enterprises worth billions of dollars. Another thing - their management model: everyone working towards one common goal. However, if you have hundreds or thousands of employees, it becomes somewhat tricky to ensure steady progress in the right direction. Hence, the OKRs methodology, which we also use to drive growth at Nord Security. This blog will cover everything you need to know to adopt this management model and help your company and teams scale their results.
Why are OKRs vital for your performance?
The first and most significant benefit of OKR is that it creates intense focus on the goal and teaches your team to be result-oriented. People are constantly reminded of what they are working on and what are the most critical priorities.
Secondly, your whole company is aligned and moving in the same direction. Everyone in the company knows who is responsible for what and their impact.
Thirdly, you build clear and effective communication and gain organization-wide transparency.
Last but not least, it leads to successful scaling and improvement.
According to Povilas Poderskis, COO at Nord security, OKRs help teams to achieve common goals. They unleash their creativity which positively impacts growth: "It enables companies to unlock the creativity of their employees by encouraging bottom-up initiatives to benefit the company goals that are set up for the top."
OKR acronym stands for Objectives and Key Results. This framework consists of 3 key elements: objectives, key results, and initiatives.
Objectives are short, memorable, and ambitious goals of what you want to achieve in a given time frame (e.g., monthly, quarterly, annually). Here are some examples of good objectives: gather customer feedback on product changes, research best hiring practices, and improve, etc.
Key results are a set of metrics that measure the progress towards the objective, e.g., decrease the number of negative feedback from 15 to 5 for the next quarter.
Finally, initiatives show a concrete action plan, projects, and tasks to achieve key results: hire a brand manager, create a customer satisfaction survey, etc.
How to create OKRs?
To successfully set up OKRs, it's essential to understand the company's vision and mission. Based on this, you can build OKRs for a company and teams not only for one quarter but for a much longer time.
The COO of Nord Security, Povilas Poderskis, says that there are some essential questions the manager who sets up OKRs should consider:
"Firstly, think about what your business aims to achieve, then consider your role in it and what your goals should be. It's important to understand that with OKRs, everyone owns their area of responsibility. Therefore they have to employ their knowledge and skills to reach a common goal and benefit the company. Thinking of the practical application of these skills and the main goal will lead you towards the successful creation of OKRs."
5 steps to adopt OKRs in your teams
Communicate OKRs to everyone. Communication - is an absolute must! Everyone in your team or company must know what OKR is and how they work.
Define 3-5 objectives, key results, and initiatives. There are usually 3 to 5 objectives, and for every objective, there should be 3-5 key results. For each key result, you should also set 3-5 initiatives. It's a tactical and concrete action plan that will be taken to achieve desired results.
Decide on a time frame plan. OKRs must provide clarity on what's expected and when. It can be set for monthly, quarterly, or annual periods, but most teams usually work on a two-time frame plan - annual and quarter.
Review and regularly update each result. It's essential to define a frequency, ideally on a one-week or one-month basis, when team members gather to share updates on their progress to ensure a successful execution process.
Evaluate your OKRs and celebrate them. Celebrate your achievements and evaluate the whole process to understand what worked well and what you should improve. Tactical details from each weekly team update can help make a more in-depth analysis and reflect it in the final OKRs review. Such findings help to plan OKRs for the upcoming years.
Rookie OKRs mistakes you should avoid
Setting up objectives that are too challenging or not challenging enough. To put it simply - objectives should be objective. Reaching 100% of a poorly set goal could make you overly confident, and getting a poor result could demotivate your team. Therefore, it's important to adhere to the 70% success rule - if you reach 70% of your goal, it's a success, and a good signal that you set up your OKR correctly.
Setting and forgetting your OKRs. To avoid it, make sure to implement a healthy and realistic review and update routine in your team.
Creating too many objectives and key results. Stick to the 3-5 rule depending on your company or team size. Otherwise, you may get overwhelmed and not be able to make progress.
Forgetting that key results should be measurable. Put numbers and percentages in place - key results should be quantitative, not qualitative.
Not keeping track of the big picture. It happens when individual objectives aren't aligned with the ones of the team or company. Therefore, your team members lack understanding of what they're aiming towards with their actions.
There's no one common recipe for making your OKRs a success, but as our COO, P. Poderskis, advises: "Implement it and cultivate it. Don't expect instant results, don't give up halfway. Push yourself and your team to strive for more and plan more. Look for inspiration in teams that are performing well and try to transfer the knowledge to those who are struggling."
He also adds that in some cases, mistakes can be avoided using tools, for example, when unifying the methodology used throughout the company or keeping track of the big picture: "It helps to communicate one single approach for multiple teams." Nonetheless, the tool itself won't solve all the possible mistakes and problems the company will face and "won't offload any effort that is crucial for understanding what is OKRs and how to implement them for YOUR company," says P. Poderskis.
Overall, there is no good or bad company management plan, but OKRs are definitely one of the most understandable and effective ones that can be applied universally: from enterprise-level organizations to teams or even individuals.