OKR Consulting
The history of OKR is linked to the story of a young man from Hungary who arrived in the United States in 1936 with basic education. He studied chemical engineering at the City College, New York and completed his PhD at the University of California at Berkeley. In 1968, he joined an IT startup and later, went on to become its CEO. He was the first employee of that startup preceded only by its two co-founders. The company was Intel Corporation. And the man we are talking about is András István Gróf (1936-2016). He was the son of Mária and György Gróf. Mr. Grove was a man with distinguished accomplishments in the field of science, technology and management with OKR as one of them.
What is OKR | OKR Basics | OKR ExplainedThe emergence of OKR stems from the acquired understanding that valuing anything other than what matters for achieving the intended results or outcomes is accountable for average performances or even failure. Say that a retail store wants to improve its customer experience (objective). And for this, direct inputs are required from the customers (key result). An ideal solution is to make customers visiting the store fill up a feedback form (initiative). This kind of high-proximity mapping and interlinking of objectives with results is an example of OKR in action. OKR stands for Objectives and Key Results. Initiative is the silent aspect in OKR.How is OKR different?If you want to think of OKR in a simple way, it is "I want to lose weight" and "I will exercise every day". That is it. There is the chosen objective and there is the chosen way. That exercise could be walking, hitting the gym, playing a sport, or anything relevant. Losing weight is the objective and working on the result area is how you intend to achieve it. There is a strong connection between the objective and the key result. If you perform poorly on the key result, you may not achieve the objective.
OKR could also be quantified by including numbers in it. Let us say the objective is to reduce 15 kilograms in 1 month. The Key Result could then be exercising for 1 hour every day. Both the objective and the key result are measurable and trackable now.
Some business examples of OKR (Objective and Key Result) (qualitative) are:
- More customers’ and ‘more value’
- More footfall and ‘better in-store CX’
- More retention’ and ‘better culture’
- More productivity’ and ‘better training’
- Diverse workforce’ and ‘flexible hiring’
Perhaps, you already know what needs to be done at your business. Perhaps, you may also know how to do those things. OKR helps you in managing the implementation of your vision, ideas and decisions till the operations level. More than anything else, it is a leadership or management principle. OKR is letting people or teams or enterprises achieve and test their limits within a defined framework of objectives to be achieved and the areas they need to work on to achieve those objectives.
The benefits cited down below may look like very ordinary concepts. But it is the most ordinary of the ideas and ideals that we miscomprehend the most.
Focus: Important vs non-important
Implementing OKR helps businesses ‘focus’ on the important. And this applies to every department, every business process, every team, and every job. When there is focus on the important, it drives out where the focus need not be. For example, if you eat a healthy breakfast every day in the morning before leaving for work, you would not be required to compensate for it with any other food you could grab that could be unhealthy. Similarly, when businesses focus on and establish what must be done to achieve an objective, doing anything else gets ruled out from all kinds of planning, decision-making, and operations.
Objectivity: Direction
OKR is instrumental in helping businesses remain objective. Since OKR establishes the result areas (performing areas), the emphasis shifts to achieving these parameters. Every decision-maker and doer begins to think and perform along the lines of these parameters. For example, a departmental store may seek to increase revenue per customer. And it establishes the Key Result as providing increasing discount rates on increasing purchase amounts. This KR then serves as a guiding light for all business decisions aiming for cheaper procurement, reduced logistic costs, performance targets, compensation and incentives, etc.
Result-Orientation: Performance
All big business decisions and strategies eventually boil down to whether or not the results are achieved. Here we are not talking about being focused or objective because these two do not automatically secure the achievement of results. Results come from performance. And OKR defines the required results in terms of the required performance. At the operational level, OKR helps businesses pinpoint what exactly needs to be achieved with operational performance. Reconsidering the example used earlier, defining the KR as "I will exercise every day" sets the broad performance or result parameter to achieve the objective of losing weight. It is also focus. It is also objective. But more importantly for realising the objective, it adds result orientation.
Motivation & Morale: Culture & Productivity
One of the key benefits of OKR is that it creates the scope of enhanced motivation and morale of employees while at the same time attaching their performance to business goals and objectives. A skilled and enterprising individual does not like to be micromanaged. You can ask someone to make you a cup of tea for your headache. But if you give them a YouTube tutorial video, they may not like that. You can leave it up to them whether they do it out of experience or avail any assistance. But you have made it abundantly clear that you need that tea (key result) to help you get rid of the headache (objective). However, you must know that you are asking the right person and that person has the necessary resources (recruitment, training, resources for the job). Moreover, employees also get to see how their performances are linked to the bigger goals and objectives. They get the space to showcase innovation in their jobs. Trying new things or old things differently forces us to think and learn and unlearn which contributes to improved learning.
Operations: Implementation Accuracy
Every benefit discussed above eventually leads to or contributes to one thing – superior operational performance. And this is best realised when OKR is applied down to the deepest levels of execution. If one teaspoon of sugar is what is required in a cup of tea, then one teaspoon it is; not a quarter more or less. This brings us to the quantum level of operational planning i.e. Standard Operating Procedures. SOP is a powerful solution to implement OKR.
How BPX can helpWe are a process management consulting enterprise specialising in process and SOP development and implementation services.
OKR is an ingrained element of our working philosophy. We believe that when the principles are applied, their benefits are bound to come. Various functional areas where we help our clients imbibe OKR via our process and SOP solutions are:
- Inventory Management
- Warehouse/FC Management
- Layout Planning
- Logistics
- Order Fulfilment
- HR Operations, and others.
From planning to implementation, our process and SOP solutions are developed and delivered in adherence to planned and proven methodologies. The service design and delivery are carried out by a team of expert and experienced business process consultants. Today, BPX is a brand with scaling global footprints and we continue to emphasise moving ahead in that direction.
For more information visit us businessprocessxperts.com