What are the benefits of OKRs?

4 + 4 reasons why you should start using OKRs now


Every business understands the significance of goal-setting. That is why there are so many articles about setting objectives and determining success. OKRs is a goal-setting framework, or as we like to call it a management, planning and strategy execution methodology, that has allowed companies to develop their vision by mission, contribute to employee engagement, and reveal the ultimate OKR, meaning each company’s 3-5 strategic objectives. In other words, OKRs bridge the gap between strategy and execution, and is the new way to operate businesses.


The first thing that pops into your head when you hear the term OKRs is probably Google. And for a good reason. Google is arguably the most famous example of a company that has used OKRs to build a world-class organization. But you don’t have to be a large, publicly-traded company to reap the benefits of this goal-setting framework. If you’re just getting started, you might be wondering why OKRs are so effective and successful in achieving the most ambitious goals, and why I should start using them.


Below are the 4 + 4 main benefits of using the OKRs methodology.



Benefits for Board members & C-suite Executives


1. Focus on the most important outcomes linked to Vision/Strategy

OKRs allow executives to focus their efforts on only the most important goals which connect to a critical business topic. The methodology works best when you set 2 to 4 yearly OKRs and each Objective is measured by up to 4 Key Results. Similarly, during an OKR cycle, teams prioritize the most important outcomes through their OKRs, to create a shared sense of direction and hold themselves accountable. Therefore, it’s best to have a limited number of OKRs. Less is more!


2. Monitor execution plan progress with leading indicators

When Board members track progress towards achieving Company’s Objectives, they use Key Results as a measure of success. Before they can measure the accomplishments though, they need indicators that will tell them if the Company is making any progress. These leading indicators inform the progress plan, enable Executive Teams and Board members to reflect on past decisions, and reset their actions for the next cycle. In OKR terminology we describe this as tracking your OKRs from output to outcome. Thus, the recipe for success is regular check-ins of your progress through a set of measures (indicators).


3. Common data interpretation and transparency

Common data interpretation in OKRs methodology is the process of reviewing data based on measurable and verifiable Key Results, which will help assign some common meaning and understanding to the data and arrive at a relevant conclusion.


Transparency is also a key word of the OKR methodology. Once the mission by vision is set (3-5 years Strategic Objectives), OKRs begin their journey of cascading throughout the organization and connecting Executive Teams with all the departments/functions to what the company is trying to achieve. Teams link or better align their work to a company-wide vision which wouldn’t be possible if the organization hadn’t been transparent and open about its goals and priorities.


4. Money saving from ineffective goal setting & strategic initiatives

OKRs encourage visionary thinking for outstanding results, while at the same time the OKR cycles provide the company with the necessary agility to learn faster, experiment, and re-adjust if needed. Having an execution process like that also reduces the risk of spending time and resources on topics off the strategy path. These are all elements that contribute to a more cost-effective goal-setting process, but perhaps most importantly OKRs drive results!



Benefits for Managers & Employees


Similar to what Board members & C-suite Executives can expect when they use OKRs, when Managers and Employees connect their work and efforts to business outcomes, they feel how they influence business decisions and as a result, they become more empowered.


To sum up, the expected benefits that an employee of any level can look for are as follows:

1. Clear job purpose connected with strategic goals

Managers and employees are responsible for developing OKRs that contribute to the company’s KRs. This top-down and bottom-up approach creates alignment throughout the company as it gives every department, team, or individual the necessary sense of direction, meaning, as well as the ability to focus on what matters. In other words, OKRs can help managers and employees understand how their work directly impacts business goals.


2. Opportunity for individual leadership

It is often said that good leaders are the ones who motivate and engage their teams to achieve the goals they set. The framework of OKRs creates an ideal context and gives people the incentive to develop and showcase their leadership skills. This is another reason why OKRs need to be challenging so that the Objectives can motivate and engage individuals to step up their efforts, grow, and be more visionary.


3. Accountable & results-oriented teams

As the title of this benefit clearly states, companies and thus company teams who use OKRs, transform, and experience behavioural change, resulting in acquiring new skills. Perhaps the most important skills managers and employees develop are the ability to focus their energy and efforts on outcome rather than process, prioritize their actions, and be accountable.


4. Aligned teams ensuring organizational effectiveness

When a company is trying to achieve ambitious goals, it’s inevitable that sometimes it’s a case of trial and error by pursuing multiple options to find the best one. As we’ve discussed though, OKRs can help managers and employees focus on the important tasks, understand the ‘bigger picture’, work with clear guidelines and direction, give meaning and purpose to their work, and see how they directly impact business goals. All the above can improve the efficiency and change the performance of a team, which in turn contributes to the company’s vision by mission and ensure organizational effectiveness.


Check out our article "What are OKRs? A brief intro to Objectives & Key Results" for more information on the OKR framework.