How to Set Okrs for Your Small Businesses (and Why You Should Do It Now)
If you’re a small business owner, you know that staying up to date with the newest business conducting methods is a must in your work field. One such method, especially recommended for all the entrepreneurs willing to clearly define their firm’s future based on a set of values and principles, is the so-called OKR.
OKR, used by many big companies such as Google, became a big topic of the last years. To find out what is OKR, how it can help your business, and learn how to successfully implement OKR methodology into your business plan, follow our guide.
What Is OKR?
OKR, or rather the Objectives and Key Results method, is a simple yet powerful management tool based on goal-setting and clearly defining the path leading to achieving it.
Composed of two parts, the objectives and expected key results, OKRs enable firms to completely modify their view of the goals and accelerate their development. Good OKR can help you more clearly set the company objectives and define the path leading to them.
In the long run, implementing OKRs will help your small business motivate more productivity and commitment within the team through clearly defining the business mission and letting your team engage with it. By letting your employees know each other’s OKRs, you can increase the clarity and transparency of the organization and create more alignment and trust among people.
Moreover, it can enable you to safely and honestly keep track of your employees’ accountability.
Please note that for the proper functioning of OKR, you should implement it as a part of a bigger, more complex, and sound system of business management and prioritization. The said system should include, besides OKR, such factors as, for instance, good business continuity software, set risk management, and access to the performance reviews of your team.
How to Implement OKRs in Your Company?
In short, implementing this management strategy is composed of two parts: objectives and key results.
Define the Objectives
Objectives are the short-term goals for your small business. Typically you should set them for three-month periods to increase the goals’ tangibility and let you more easily track the development. If you decide to establish long term OKRs, remember to accompany them with quarterly OKRs.
When creating the goals, remember they should be demanding and inspirational, but at the same time possible to achieve and within your team’s reach. Their main goal is to provide the employees with a new milestone to get to and get the people motivated to work.
Moreover, the right goal should be measurable within the time frame.
For example, a good objective for small businesses could be: “Improve sale of the product by 50% per quarter”, or “Develop 10 of 30 trial clients into long-term relationships.” Both of those examples describe a goal of the process and are specific and measurable.
What is more, the goals are not too high, yet are ambitious and intelligent, i.e., they align with the company’s overall mission. Moreover, they are motivating and will help move the company into further progress and long-term growth.
A bad, too general and vague, goal would be, for instance: “Improve brand recognition.” This way of goal setting doesn’t specify the required steps to achieve the objective and doesn’t help the company. Moreover, it cannot motivate the employees, as they don’t know the ultimate measurement of good brand recognition.
Define the Key Results
While the objective is a goal you want your team to get to in a specific time, key results are the process you will use to get there. Setting key results helps you establish in detail every step you have to make to achieve the objective.
For instance, for the objective “Develop 10 of 30 trial clients into long-term relationships”, the key results you need to implement may be:
- Develop a one-week challenge for the trial users.
- Promote a challenge among users on Facebook through paid ads.
- Measure results with Google Campaign and work on improving them.
Such key results are specific enough to make people focused on the goal and aware of its implementation. Moreover, they establish how companies can track their performance and continually analyze the objective’s growth and movement.
You can summarize the sum of objectives and key results in the formula:
My team will (objective) as measured by (key result).
By the end of the month, quarter, or any set date, you should always analyze if the goals were met and review what should be done better or differently. It might be useful to discuss those results with your team.
Knowing how to implement OKRs in your small business, to amplify your knowledge on the topic, you might search the web and review how other companies do it. It’s widely known that Google does it the best: and who to learn from, if not the best ones in the game?
When reviewing different businesses’ OKRs, please remember that it should be just for inspiration. Typically, every small business has unique features, pricing, and environment, so it’s crucial to match the Small Business Objectives and Key Results to fit your system’s needs.
Using this methodology, bear in mind not to go over the top with the number of objectives and key results. For the starters, set from three to five objectives. Please remember that the main point of OKRs is to let you entirely focus on a few tasks at a time, so first, start small and learn how to perform good OKRs and implement them in your work practice. Then, you are welcome to move onto bigger things and eventually – achieve a grand success.