OKR & KPI... Balanced Scorecard

In this professional world, driven by objectives and key results, it is instrumental to have goal setting and performance management in place.

In any organization, post strategy building comes its implementation. That’s where the rubber hits the road; where the culture, operations and management of the business have to come together to execute this strategy and make it a success.

Any organizations irrespective of their size of operations have social interactions, attitudes, opinions, emotions etc. within workforce. So how do you know when things are working and when they aren’t?

As a leader, you have your hand’s full, balancing between looking at what comes next and what is happening now. Unless you have a system in place, a way to track and steer progress your strategy is worth nothing.

Managing a business means measuring the right things – not just anything though. That’s where KPI comes in.

But how does your team understands what they need to do? How do you align them to where you want the business to go?

By using OKR’s you work with your teams, not simply top-down approach but you also provide them with the tools to understand what they need to achieve and then they decide the how to achieve it.

So we need to measure the right things and to set objectives at different levels of the business – but allow teams to do the objective setting like a cascade so it all knits together. In my option, that while KPIs and OKRs are different, there’s a clear benefit to having both.?

What is OKR?

1. Stands for Objectives and Key Results.
2. Action-oriented goals (objectives) and measures (key results).
3. Future focused and directional, trying to get from point A to point B.
4. Ambitious goals.
5. Should be aggressive and bold, help move the needle on something strategically important to your organization.
6. Growth Orientation.
7. Have a set time period (quarter, year, etc.), and changes from quarter to quarter or year to year as you progress.
8. A broad framework that enables clear communications aligned to roles.

What is KPI?

1. Stands for Key Performance Indicator.
2. Number (metrics) that measure the health of your business.
3. Could be a result or leading indicator (Looking at past results or future goals/targets).
4. Attainable goals.
5. Monitors the "steady-state" and provides benchmarks; It prompt actions when the numbers are off track.
6. Performance Management Focus.
7. Usually measured on an on-going basis may have many of the same KPIs from quarter to quarter and year to year, but the targets might change.
8. Linked to organizational performance – balanced scorecard.

How to Use KPIs and OKRs together?

• Both should be specific, clear and measurable.
• You should focus on a few of each that are truly pivotal. (Both acronyms contain the letter K for key, “pivotal “). You should have 3-5 OKRs at a given time and no more than 8-12 KPIs.
• You can have OKRs and KPIs for the company as a whole, for departments or teams, or for specific roles, individuals, or projects.
• You may run your business by aligning everyone around well-defined goals and clear measures of success.
• For the team, one needs an owner that is accountable for the results.

OKR framework:-

COMPANY MISSION?– The company's mission is a brief description of the company’s vision and purpose, and how they should be implemented.

MID-TERM-GOALS?– Mid-term goals are the link between the company's mission and the OKR. They are usually defined for one year.

OKR PLANNING – At OKR planning the respective objective and key results become defined for the entire cycle and at all levels. This is done both top-down and bottom-up.

OKR WEEKLY – The OKR weekly helps to synchronize the objective and key results?implementation and supports self-responsibility as a solid ritual of the teams during the cycle. The weekly should only take about 15 minutes and should give an overview of the current status of the OKR.

OKR REVIEW – Review meetings are used to determine the degree of achievement at the end of an evaluation cycle. The scoring should be consistent with team standards.

OKR RETROSPECTIVE – During a retrospective, the teams analyze the OKR process from a systematic point of view. What did the team learn? What should be improved in the next cycle?

OKR COACH – As experts, coaches, facilitators, change agents are OKR Coaches responsible for the smooth implementation of the OKR framework in the company and support their teams in the definition of OKRs and other regular events.

Closing:

The OKR model is a great way to align your team to the goals that matter most. It brings focus, clarity, transparency, and accountability. For the OKR methodology to function at its best, there needs to be clear communication, agreed-upon key results, and aspirational goals. While OKRs should be updated regularly, moving the goal posts too frequently can lead to burnout. You also don’t want to set too many OKRs, because priorities can get lost and confusing.

The OKR model is an effective way to set and measure goals, while achieving alignment throughout your organization. If you’re interested in implementing it, be prepared for highly communicative and transparent leadership, accurate goal-setting, cross-organizational alignment, and a lot of discipline.??