A Year End Update on the LIBOR Transition
For organizational leaders across the globe, January can feel like a blur. Once the carousal of New Years' festivities has faded, many of us are deep into the process of rolling-out what we will accomplish in the new year and what our success will look like when it finally arrives. The global pandemic of Covid-19 is now forcing leaders worldwide to re-think how they operate during the goal-setting process. With countless employees now working remotely, the need for clarity, alignment, and flawless execution has never been greater. If you aren’t 100% certain that your approach will yield the best results, a new system could ensure your organization stays on-target in the new year.
Goals bring an organization together and keep everyone focused on the north star. Successful teams use OKRs as a strategic framework to help manage and communicate top priorities while empowering teams to achieve incredible results. OKRs encourage alignment across departments and increase focus on what matters most to the company all up.
Perfecting strategic goals as a leader can be daunting. OKRs, KPIs, and SMART goals are some of the options you have, but OKRs are the most powerful because they are part critical thinking framework and part of ongoing discipline. They encourage collaboration and alignment across functions, helping teams work together, focus their efforts, and clarify what’s most important. An organization’s long-term success relies on every team member and their ability to understand what is most important to the organization. OKRs also help teams and individuals by keeping team members from trying to do everything. When you have OKRs to manage priorities, team members have the opportunity to say no when tasks don’t align. OKRs help individual contributors think about the bigger picture. When you identify those individual contributors who can think big picture, your team becomes more capable of anticipating impact and mitigating risk. OKRs also encourage team members to fail smart and fail fast. This type of failure is ideal, as long as your team learns from that failure and doesn’t repeat it. Using ambitious OKRs empowers your team to see there’s no shame in trying your hardest to achieve a stretch goal and coming up short.
OKRs consist of a single objective, or the O, and a set of three to five key results, the KRs. The Objective is a qualitative aspirational statement meant to inspire action. It’s where you want to go. The intent of an OKR objective is to move an organization in a specific direction quickly, rally teams together in the face of a new competitor, or enter a new market. Objectives inspire and are qualitative statements, while KRs are quantitative, specific, time-bound, and measurable.
The foundation of an OKR is The Objective (the “O” in OKR). Writing a powerful objective begins with understanding a problem and identifying a solution. A problem statement describes an issue or something preventing growth, change, or the desired outcome. Helpful questions to ask yourself when writing a problem statement include what do I want to change? What’s holding me back from creating my ideal scenario?
The Objective’s purpose is to propel a team or organization forward in the desired direction, and if achieved, it should move the needle forward. Company objectives should help everyone in the organization understand what’s most important to the business today. Companies set OKR Objectives quarterly, semiannually, or annually (depending on the organization’s size). A powerful objective describes what you want to do and where you want to go. You will know that you’ve created vital, clear objectives when everyone in your company at every level knows and can share the objectives and why they matter. When this happens, your company will achieve incredible things, like landing a person on the moon!
After you identify a problem you want to solve and write an inspiring objective to help you overcome that problem, it’s time to decide which key results (KR) you’ll use to measure your success. A good set of Key Results answers the following questions. Have we achieved what we set out to do? And how will we know if we’ve met our objective? Of all steps in writing an OKR, KRs take the most time and critical thinking. You can expect to make many drafts before landing on a set of perfect KR. To help you write KRs, remember to observe three critical traits. KR’s must be:
OKRs are a robust framework to align your company, track, and measure success with, but they alone aren't enough. A process to manage and consistently revisit them is also necessary. Not all companies are the same. Variables like the size and makeup of the group and the difficulty of the OKR can influence their structure. The point is to keep the OKR top of mind for all leaders. ' 'You'll also want to establish a single source of truth. OKR reporting should be painless for leaders. Assigning an OKR project manager to partner with the executive sponsor and driving success is critical. The project manager or PM should effectively manage and report OKR performance from a single source of truth or project plan. All KR owners track tactical timeline progress and deliverables. Lastly, trust your leaders. Although reporting and communication benefits from having structure at the top, most companies find success in allowing their departments and teams to structure their design process in a way that makes sense to them. In doing this, it's more likely teams, and departments will build and execute OKRs that support the company's overall OKR mission.
How will you manage the OKR process at your organization to become something that you set and forget? Sia Partners can help you design your OKR's and the process to manage and measure your success.