During the (very) early days of Google, ex-Intel employee John Doerr introduced the young company to a management system called Objectives and Key Results — OKRs for short.
Rise of the OKR
“Kleiner Perkins had just invested in Google, and as a strong advocate of OKRs, I offered to introduce the OKR system to Larry, Sergey, and the leadership team,” recalls Doerr. “The entire company was standing around a Ping-Pong table and I walked them through the goals, benefits and implementation details of OKRs. Larry and Sergey saw the value immediately.
“They liked the idea of having a quarterly set of priorities for the company. It took a couple of iterations, but we figured out the right cadence and model and to this day, Larry writes his own personal OKRs and Google’s corporate OKRs every quarter. In my experience, this is a trial-and-error process and it usually takes a company one to two quarters to figure out.”
The concept wasn’t new, not even during the early days of Google. In fact, it had been around since the 1970s. Intel COO and business legend Andy Grove was looking for a way to improve focus within the organisation. How could he keep all employees accountable and focused on the same goals.
The answer was a new system called Objectives and Key Results, which had been created inside the organisation. It was a great success and many prominent business people became huge fans of it (including John Doerr), but it was really when Google started using it that it truly gained widespread appeal. Google, after all, is seen by many as the Platonic Ideal of the modern organisation.
Basics of the OKR
So what are Objectives and Key Results exactly? There is nothing particularly novel or groundbreaking about the system, but it packages typical management ideas in a way that makes them accessible and measurable.
Here’s how it works. Around five objectives are selected every quarter (the timeframe is important), and each objective is given a set of ‘key results’ that are measurable and can be scored.
So it might look something like this:
Increase traffic to the company’s website.
- Create a Facebook page and Twitter account that can drive traffic to the website
- Build an audience on Facebook and Twitter through regular posting and sponsored posts
- Write at least four blog posts per month for the website
- Create effective Google ads promoting the website
- Create three items of sponsored content for posting on popular new sites that will drive traffic to the company website.
From the above it should be fairly clear what ’objectives’ and ‘key results’ are, and how they are related. An objective, within the OKR context, is an outcome that is specific and highly desirable, but not particularly measurable. A result, meanwhile, is a measurable activity that will assist in the achievement of the objective. In other words, key results are a list of actionable items that will lead to the achievement of the overall goal.
Employees are scored on each key result, with the maximum score being 1, and the minimum 0. A good score would be 0,6 or 0,7 (any higher than that and you have to question whether the chosen key result was too easy.
Key results should be tough but attainable), but the process is much more important than the actual score. Also, low scores should be used to reassess what the company is spending its time and resources on. Why are scores low? How crucial are these results? Should we be focusing on different key results to get to our objectives?
OKR in practice
Although the implementation of OKRs will differ slightly depending on the company you look at, most systems tend to have the following things in common:
OKRs are selected on a quarterly basis: To maintain momentum and ensure that everyone is always actively working towards the achievement of a goal, the timeframe of an OKR should be relatively short. Knowing that a deadline is always on the horizon keeps everyone focused and accountable. Some companies have monthly OKRs, but most tend to settle on quarterly objectives.
They have hard, non-negotiable deadlines: There’s no point in setting monthly or quarterly OKRs if employees know that deadlines can be shifted if necessary. In order to maintain focus and urgency, deadlines need to be absolute.
Everyone gets about five quarterly OKRs: Give employees too many objectives and they’ll lose focus, or become utterly overwhelmed. John Doerr recommends four to six OKRs per quarter.
OKRs are public: A lot of companies — including Google — choose to make OKRs public. Google makes all employees’ OKRs (including those of the founders and other C-suite executives) available for everyone to see. They can all be found on the organisation’s internal directory. Scores are also public, which reinforces commitment and ensures accountability.
They can exist on different levels: OKRs need not only exist at the level of the employee alone. Teams, departments or even the company as a whole could be assigned quarterly OKRs. It’s important, though, not to overcomplicate things — the whole aim of OKRs, after all, is to keep things simple. Start adding layers and layers of OKRs on top of each other, and the whole system will start breaking down. The aim is to increase focus, so keep things simple and straightforward.
The benefits of OKRs
If all of the above sounds like a lot of work, it’s worth taking a moment to consider what the advantages of OKRs are. According to John Doerr, implementing Objectives and Key Results in a company offers the following benefits:
It encourages disciplined thinking: By focusing on objectives and key results, you learn to look at your business in a very disciplined way. The unimportant things fall away and you start to notice what the major goals should be.
Assists with communication: Public OKRs give people a good idea of what the rest of the organisation is working on, which helps to keep all employees on the same page. There’s less chance of a communication breakdown if everyone knows what the responsibilities of everyone else are.
It makes things measurable: Even the most focused goals can be tough to actually track. What does success look like? When can you tick it off the list? OKRs provide measurable indicators that allow you to track the progress of employees in a meaningful way.
It encourages focus: Making OKRs public not only improves communication, but also keeps everyone in step and focused on the same goals.
By using OKRS, you allow the important objectives within your organisation to reveal themselves. This won’t necessarily happen immediately. There will be some trial and error, but by sticking with the process, you should reach a stage where you have a very good idea of what you should be focusing your time and resources on.
Excellent Performance Management Supports Great Character
Personal character, and the character and culture of an organisation, is core to organisational health.
“We have little power to choose what happens, but we have complete power over how we respond.”
– Ariana Huffington, Thrive
Good character feels right
Having good character simply feels right. You will sense when you encounter it in an organisation or an individual. On the flip side, you will want to run away if you experience its polar opposite being allowed to run rife.
The fruit of “good character” in the organisational context includes: Sincerely serving colleagues, customers and suppliers. Ethical leadership. Showing integrity while performing tasks. It is reflected in something as “small” as looking after company resources.
- Personally: Do you take stationary home? Is that stealing? Do you habitually leave 10 minutes earlier, or come late?
- Organisationally: Do we commit to the promises we make our customers? Do we remunerate our employees fairly, or do we sweat our assets to get more work for less pay?
Good character is tested during turbulent times.
Will the company turn a blind eye when confronted with situations that require neglecting good principles for the sake of making money or closing a deal?
It is then when we see who stands firm in their values, good principles, and beliefs.
The benefits of excellent character
No one or no business is perfect. Building character is a lifelong process.
Benefits of excellent organisational character include: Attracting better leaders and talent, making better decisions, having happy and engaged employees who will take less energy to manage, but instead will add energy to the business.
Customers will sense this. Strategic partnerships will be formed. The business will also attract suppliers that share the same character.
Other intrinsic benefits include: Being responsible stewards, and understanding why the organisation exists, what it contributes towards, and is part of.
Making a sizeable profit is great, and a responsibility towards shareholders. How you make that profit, and what you do with it (how you spend it), is what defines “who” the organisation is, reflecting its character.
Obstacles to excellent organisational character
Warren Buffet said: “It takes 20 years to build a reputation, and five minutes to ruin it. If you think about that, you’ll do things differently.”
I want to be able to say that I display great character all the time, but I can’t. I wrestle with it, and I am tested in various areas daily. But I try. I review my actions and motives through discussions with individuals, in internal meetings, and in conversations with clients. I often need to face the facts that in some areas I may have acted inappropriately. This is not about work only, but about life, which makes it a weightier responsibility. Being confronted with the standards of having good character is sometimes the biggest obstacle you face.
From an HR viewpoint organisations will face obstacles in various areas: Ensuring that goals are reasonable. Ensuring that employees and managers act with integrity, and are held accountable for their actions. Also, recruiting the correct fit within the job and culture and not just recruiting the quickest available candidate who might actually not fit the culture profile.
When we see re-occurring patterns of moral “red flags” we should act accordingly to protect our business from the harmful repercussions of having “a little leaven ruin the whole lump”. Flags like unfaithfulness, malicious jealousy, destructive selfish ambitions, dissensions, and outbursts of rage, sabotaging envy, and addictions.
Setting the boundaries and letting employees and managers know through leaderships’ example what it means to act with good character brings security, and will contribute to a happy and productive workforce.
Performance management contributes to excellent organisational character
Sometimes performance management is inappropriately used by managers as merely a tool to discipline, or just done as a “box-ticking” exercise. This is not the approach we recommend.
The Imenent approach is geared towards creating a culture where the employee and manager can honestly dialogue about the real progress of a function or task. The majority of empowered employees are generally able to fulfill well-defined functions. It is when things go wrong that a manager needs to be made aware of it quickly so that they can work together as a team to understand what happened, and what the solution is.
Our system is a voice for both the employee and the manager, supporting both parties with tools and advise.
We believe that this open relational approach to performance management is an enabler of great organisational character.
To conclude with another Ariana Huffington quote: “It all starts with setting the expectations that make it clear that no matter how much hardship we encounter – how much pain and loss, dishonesty, ingratitude, unfairness, and jealousy – we can still choose peace and imperturbability.”
Always seek to do good.
The Role Of Employers In Skills Development
Here are a few reasons why you should invest in skills development for your employees.
Recruiting talent in today’s working environment has certainly changed for the better. With the new B-BBEE compliance and Skills Development Act regulations, it has now become possible for business owners to make an impact by employing unskilled individuals and training them up to be valuable workplace assets. In such a competitive working environment, investing in one of the many skills programmes can benefit your human capital more than any impulse hire could.
From UIF to skills development levies and more, business owners need to be up-to-date with the latest labour law requirements as they are directly responsible for the growth and progress of their staff. Employer-endorsed skills development plays an important role in the future of your business. This, unfortunately, has made many employers shy away from skills development because they fear that investing in skills may result in employees leaving. While that certainly can be a reality, the Skills Development Act encourages businesses to invest in training to help contribute to society, and to generally increase their business opportunities with international and local companies.
Skills development is a powerful motivator for new and existing employees. Be it through learnerships, internships or workplace-based training programmes, individuals who feel that their company is investing in them, personally and professionally, are more likely to be loyal to your company.
Here are a few reasons why you should invest in skills development for your employees:
Attracts and retains valuable employees
Beyond the skills shortage in South Africa, employee retention is a major challenge for employers. While the hiring process might be easy, it becomes an unnecessary expense for business owners when positions aren’t fulfilled according to plan. Knowing that you can rely on your employees is both a benefit to you and the employee themselves.
Skills development programmes do not only build loyalty, increase your BBBEE scorecard rating and create a strong workforce, but it gives your business a good reputation. A company which invests in human capital creates new opportunities within and outside the company.
Helps you create promotable employees
Taking the time to upskill employees means that you’re making an effort to support them professionally, as well as contributing to the economy at large. By implementing skills development training in your business, you’re creating a capable workforce and giving them the tools they need to excel.
Employees become engaged at work
Employees who don’t feel appreciated or cared for are the ones who tend to come and go. When you provide them with an opportunity to learn and grow, you’re allowing them to challenge themselves. Most unskilled employees can’t afford tertiary education, so when you give your employees the help they need, they’re more likely to become loyal, motivated and value-adding employees.
Helps you save and earn money
When your company partners with a company like Proud Afrique, according to Sector Education and Training Authority (SETA) regulations, there are many ways in which your business can save money. One of the most beneficial ways is through tax claims.
There will also no longer be a need to hire and recruit talent as often because learning programmes will give your business the chance to build up a pool of trustworthy, willing employees who could, potentially, add value to your company in the long-run. Not to mention, a trained workforce contributes to a higher productivity and output level in the office.
Creates a forward-thinking mindset
Employee development is forever changing. Something that worked well this year might not work well next year. But the exciting thing is that your team will be up-to-date with the latest trends and innovations. Over time, you will be able to adjust your plan according to the employee and industry’s needs. While it might seem intimidating for employers, it means that you’ll constantly need to think ahead and try new ideas. This type of forward-thinking can also spark many valuable relationships.
Contributing to human capital development in South Africa will give your business the opportunity to grow, regardless of economic conditions. B-BBEE training offers countless advantages which will help you learn the process, the benefits and the goals of being B-BBEE compliant. Employment should be more than simply having a job or receiving a paycheque every month. A skills development training option is there to help your employees change their lives.
Leadership – Lead Your Team To Dizzying Heights Of Productivity And Business Success
To ensure your company’s success, you’ll need a productive, effective team. But first, you should ensure you have the right people on the bus.
What is productivity?
When pondering the answer to a very important question it proves often to be a good tactic to first think on what a concept is not. Productivity is not appearing to be busy.
Productivity is not spending most of your time actually being very busy, but busy with things that propel you forward on the journey towards great achievements and making your vision a reality.
Productivity is simply to produce results. Results that leaps towards your end goals and ultimate vision. Trying is not an option, doing the right things in the right way so that they produce results is the only option, that is, if you really want to build a legendary company.
The ground-breaking difference between effectiveness and efficiency
Efficiency means to do the right thing. It is the right thing to do in business to give quality service, right? So what if doing the right thing does not produce results?
Effectiveness on the other hand is doing the right thing in the right way so that it produces results.
Quality service given in the right way so that we obtain actual referrals and the client comes back for repeat business is an example of effectiveness.
What must you be busy with?
The Pareto principle applies but in overdrive. Really hone in on the 20% of things to do that really brings home the profits, the purpose of the business, and brings joy to customers and team members.
Yes only 20% of your activity as an entrepreneur (roughly on average) brings in the true results, the other 80% of your activity is pure fluff.
Entrepreneurs often revert to what they like doing as opposed to what they actually need to do to be a success. Business growth and productivity is not a game of meandering between the options of dislikes and likes , but instead, taking action on what needs to be done to reach goals whether I personally always like it or not.
Be busy with what works in relation to producing the desired results. If you do not know what actually does work, be busy in terms of researching what needs to be done to produce results.
Get the right people on the bus
Another critical question to answer is: Who must be busy doing the right things in the right way to produce results?
Well only the people who really want to be successful and are willing to pay the price of disciplined and purposeful action will sustainably be effective anyway.
Hire people that authentically believe in your business’ purpose. Hire people that love what they do and already are highly skilled, or alternatively will put in the required work to become very skilful. Remove toxic behaviour from your business by either coaching towards excellence or firing for misaligned behaviours.
Lead by example
Do not expect productivity in the true sense of the word, from your employees if you as an entrepreneur is not the living example of the results producing behaviour that you require from your team. Inspire your team, not only by producing excellent results, but by doing it in a creative, purposeful and joyful way.
As Mahatma Gandhi said: “Be the change that you want to see in this world.” Do not simply demand it, be it first.
“Slay the holy cows”
Most businesses have ‘holy cows’. That means things that do not necessarily produce any results, or even produce very negative results, but the team keeps on doing those things because:
‘That’s how we do things here’
‘That’s how we have always have done things here’
‘We love doing things in that way, here’
A troublesome example is the ‘meeting holy cow’. Some people just love the sound of their own voices and will carry on speaking for hours upon hours within meetings, which usually then leads to little or no action. A meeting is usually just talking whilst only action can really produce results.
‘Slaying the meeting holy cow’ does not mean we stop having meetings. We simply change the way we do them so that they become effective. By having shorter, very concise meetings, that are actionable, measurable, and results driven we have ‘slayed the meeting holy cow’.
Productivity is producing results that continuously move you forward on the journey towards attaining your vision. Be busy with the 20% of activity that produces the real and tangible results that you want for your business. Be willing to ‘slay the holy cows’ that take up time unnecessarily and that do not produce the desired results.