What Is OKR in Business? The Basics Explained

If you’re in business, you’ve heard of KPIs, but here’s yet another 3 letter algorithm for you: OKR. 

Before you switch off, you’re about to learn all about OKR and why it will increase your business success and productivity tenfold. OKR in business is a new, revolutionary form of goal setting that will actually engage employees and inspire them to out-perform. 

The thing about OKR? It has to be done right if you want to create meaningful change. That means learning exactly how to do it before you try; don’t crash and burn with another boring 3 letter algorithm. 

If you’re wondering, ‘but what is OKR?’ read on. 

The ‘O’ in OKR 

This stands for the objective, or what you want to accomplish. The objective should be relevant for every employee and inspire everyone to work toward a common goal. Objectives are not technical, more like sweeping statements of a goal. 

Some practical objectives could be: 

  • Improve employee wellness and engagement at work 
  • Improve our brand credibility and sustainability 
  • Have a successful product launch 

Notably, every employee (no matter of rank) can work towards helping the objectives be a success. The objectives are the main business priorities for the year. 

The ‘KR’ in OKR 

This stands for the key result, or how you’ll know whether you’ve achieved the objective. The key results are quantitative, metric, and do not leave any room for interpretation. They are actionable steps to help you meet your objectives. 

Some effective key results could be: 

  • Increase uptake of employee engagement surveys by 30% in 2021
  • Switch to recyclable packaging in 80% of our products in 2021
  • Achieve ┬ú50,000 in revenue from sales of our new product line in 2021

Every objective should have 3-5 key results that are timebound, measurable, and actionable. The objective inspires motivation, and the key results make it clear how to achieve the objective. 

OKR: Putting It All Together

Once you’ve set your OKRs, everyone will be aligned towards the same business priorities. You can either roll out the OKR framework to one department as a test run or the entire company. 

The benefits of OKR setting are company transparency, focused execution, strategic alignment, and improved employee engagement; you should put OKR setting as the primary business priority. 

Tracking, reviewing, and improving OKRs regularly is critical. You can use OKR software such as an OKR dashboard to track progress. When you’re examining an OKR, assess both the objectives and key results to determine the framework’s success.

Using this way of working is a constant learning process and can take up to a year to be successful, but as long as your reviews are thorough, it will help you exceed business targets.

Use OKR in Business for Exponential Success 

That’s the whistle-stop tour to using OKR in business. If you want to create meaningful change, engage your employees, and increase profits, it’s time to get started. 

Why not look at different OKR technology to guide you through the process? 

If you found this article helpful, make sure to check out the rest of our site for more valuable business tips!