personal growth is critical to company success
OKRs

How to pick the right Objectives?

April 8, 2021
Emily Vo
Kaisa Savola

Picking the right Objectives is relatively harder than you might think. Setting the right Objective at the right time is even more difficult.

Types of Objectives

It is not always clear to teams brainstorming their Objectives what an Objective can be used for. To get more clarity on this, you should first understand that an Objective is designed to get you out of your status quo, implying that if you are completely satisfied with how things are going at the moment, you may not need an Objective at all.

When you would like to move forward and get out of your status quo, there are 3 different types of Objectives you can use:

how to pick the right objectives
Figure 1. Three type of Objectives

To explain the 3 different categories in detail, let’s take car making as an example. When you are building a car from the ground up, most of your work will fall into the “Build” category. It is impossible to improve the engine if you have not even built the engine yet. Neither is it possible to innovate the driving experience if you do not have a chassis.

Once you have your basic car, you might want to improve different parts of it. You could improve the engine for higher performance or improve the manufacturing process so that you can build an engine with similar quality at a lower cost. This is when you can have “Improve” Objectives.

Sometimes you have to reinvent yourself, and if you do not, others will. If you see that your customers do not want to drive a car themselves anymore, you will need to have “Innovate” Objectives to make autonomous driving possible.

Important criteria for Objectives

An Objectives should meet the following criteria for it to qualify as an Objective:

how to pick the right objectives
Figure 2. Criteria for an Objective

Directional

Objectives tell you where to go, so make sure the Objective sets a clear direction. Having a direction also helps you to focus your efforts. Things that fall outside of the scope of the Objectives, should be said no to. Though directional can result in the Objective being a bit vague, that is ok as the Key Results will specify it.

Being directional, also means that the Objective should help move the company out of the status quo. Consequently, there is no need to reflect business as usual in your OKRs. For example, “Achieve an incredible revenue growth“ is directional, “Sell our product to customers” is not.

Aligned

Once your Objective sets a clear direction, it is important to align it. This ensures you are moving in the right direction. It is a great and easy way to ensure your Objective provides business value. You have four main options:

1. Directly support the company’s strategy

In Talbit, you will align your Objective to one of the company’s Business Strategies and Priorities. This is ideal for long-term, company OKRs,

2. Improve a KPI

If the conversion rate on your website has dropped, your Marketing team could create a quarterly OKR to fix this unhealthy KPI.

3. Support another OKRs

With annual company OKRs defined, the different teams or departments in your organization can decide how to best support these long-term Objectives, often through quarterly OKRs.

4. Don’t align the OKRs

This could be a red flag that your OKR is not going to provide business value. As alignment will also boost employee engagement, letting everyone working on the Objective see how their work fits into the bigger picture, it is important to align the OKRs.

Impact

Once your Objective is directional and strategically aligned, you can be sure you are moving in the right direction with that Objective. You should now make sure it will be a substantial step in that direction. As you should only have 3 or 4 Objectives, each one of them must have a real impact. Fast forward to the end date of the Objective. Imagine you have accomplished it, would it have made a difference?

Inspirational

Use inspiring language for your Objective. Some people use internal rules that state an Objective should be so inspiring that everyone working on it should want to put it on their resume. An easy way to make Objectives more inspiring is to include adverbs and adjectives such as successful, awesome, best, strongest, steepest, etc.

Time-bound

Every Objective should be limited in time and therefore needs a horizon. If you set OKRs on a quarterly cadence, the deadline is usually the end of a quarter. Objectives can, however, be due before or after the end of the quarter.

No-metrics

An Objective cannot contain any metrics. Leave the metrics for the Key Results.

How to pick the right Objectives

how top ick the right objectives
Figure 3. How to pick the right Objectives

Look at your business strategy & business priorities first

Typically, Objectives drive the organization forward. Directly or indirectly, they should get you closer to your organization’s ultimate business goal. Therefore, the most important thing to do when crafting Objectives is to look at your business strategy & business priorities. With the proper context, everyone understands where they can best focus their efforts, and they can make sure that their OKRs support the high-level goals and strategy of the organization.

Timing

Objectives are like destinations that you set out for your organization or team. They should inspire everyone working on them, and your teams and employees ideally buy into them. In the ideal scenario, you all agree that these are indeed the right things to focus on at this moment.

Imagine, for instance, a company with an Objective for Q4 is to "Become a great place to work". A Key Result could be to get certified by greatplacetowork.com. Even though it would be a great Objective, it is probably hard to buy into for employees if employee turnover is skyrocketing. A better idea would be to fix the turnover problem first: create an Objective for Q4 to "Fix the employee turnover problem" (an ambitious key result would be to reduce it by 50%). Once that problem is fixed, you can focus on becoming a great place to work.

Look at your KPIs

Your KPIs tell you how key areas of your business are performing. Are your KPIs revealing certain problems that need to be solved? If so, what could you do to positively influence those KPIs? If you are using Talbit, you can create an OKR to get an unhealthy KPI back on track.

how to pick the right objectives
Figure 4. The differences between KPIs and OKRs (download the full infographic)

At the end of the day, OKRs really only tell half the story of what each area of your business is working toward. Take your Marketing team, they likely have KPIs as well as OKRs – two different types of goals, with different purposes. If you are serious about transparency, you will need to track these goals alongside each other to get a complete view of Marketing’s priorities.

Close and review OKRs from the previous timeframe

Closing and reviewing your OKRs forces you to pause and reflect. It enables you to collect and share your learnings before you start focusing on something new. Without this period of reflection, you are doomed to constantly react instead of act. It is also a great opportunity for leadership to give recognition and praise to those who deserve it. Besides, when closing the OKRs, you should write up closing notes and answer 3 questions:

1. How would you rate your execution?

If the OKR was not achieved and execution was rated with 4 stars or less, it may have not been achieved because of poor execution, which means you would have to start all over again, if the OKR is still important. If the OKR was not achieved and execution was rated with 7 stars or more, you may have an entirely different issue.

2. What did you learn?

Whether the OKR was achieved or not, there are always important learnings that you do not want to get lost. You want these learnings to be easily accessible to others so they can build on top of them.

3. What have you decided based on those learnings?

Learnings empower decision-making and decisions are important steps forward for a team and organization. Therefore, we always ask the whole company, teams, and individuals what the consequences of the learnings will be going forward.

In general, always review your OKRs when the timeframe is about to end. This activity will tell you whether you need to port over any OKRs to the following timeframe, significantly impacting your available bandwidth for the future.

Check the purpose of your team

Why have you been hired? What is the purpose of your team and your position? Are you living up to these expectations? The Objectives that you have set for yourself, are they in line with what is expected of you?

Crowdsource the knowledge of your people

It is the people closest to the ball who have unique insights into what is going on, either within the business or in the market. Ask your team to suggest 1 or 2 Objectives for the upcoming period. Discuss the most popular suggestions with management and try to make at least one of them a company or team-level Objective.

If you’d like to learn more about how Talbit can help you manage your OKRs, book a demo with one of our product experts.

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