Measure business outcomes using objectives and key results
Modern operations require a modern approach to measuring business outcomes. Objectives and key results (OKR) is a powerful goal-setting framework for defining business objectives and tracking their outcomes. Your organization's OKR measurement platform should support your organization's outcomes and plan for growth by:
- Aligning the everyday work with strategic business initiatives
- Aligning the work of cross-functional teams
- Providing real-time progress and performance insights
- Enhancing staff productivity and agility
An overview of objectives and key results
The OKR framework fosters innovation, drives alignment in complex work environments, and helps individuals focus on what matters for their organization.
The two components of all OKRs are the objective and its key results. An objective is a statement of intent that describes what your team is trying to accomplish and why it's important. Key results are specific outcomes that track your team's progress towards the objective. You can define these components for your own OKRs by asking the following questions:
- Objective: Where do you want to go?
- Key results: How do you know you're getting there? How do you measure that progress?
OKRs move teams away from an “output” mindset (“What projects or tasks did we do?”) to an “outcome” mindset (“What was the business result of the project or task?”). You can set OKRs at the beginning of a key time period for your business (like a quarter or a fiscal year) and then check in regularly with those OKRs to keep your team focused on the importance of their work rather than its volume.
OKR key principles
Ally.io is an OKR software solution. This service helps you turn your business goals into results by ensuring you keep your most important objectives in focus throughout every process. Ally.io's three key principles to provide effective OKR management are:
- Connect work and outcomes: Clearly connecting each team's daily work with business goals
- Align individuals and impact: Creating a strong culture of employee engagement and growth
- Orchestrate the OKR process: Setting up and running personalized OKR programs to meets each team's specific needs
OKRs add value to an organization
OKRs give a strategic advantage to organization of any size and can be adopted by individuals in any role. OKRs add value to your organization in the following ways:
- OKRs help your organization navigate rapid change, reduce risk, and identify waste. The OKR framework gives a level of visibility into work done across your organization that allows you to proactively manage risk. It helps you identify themes, trends, and changes to diverse data sets that can go unnoticed without a unifying system. Your organization can shift focus from activity to outcomes, making the right changes at the right time to stay competitive.
- OKRs motivate and foster involvement. When done well and made the driving force behind your organization's strategic rhythm, OKRs can keep every employee connected to and invested in your broader mission.
- OKRs create cross-functional cooperation that unifies initiatives and improves collaboration. When each individual, team, and department goal is guided by the organization's broader strategy, teams can clearly prioritize each project, task, and outcome.
- OKRs offer clear, contextual communication with continual progress reviews. The OKR framework doesn’t stop when your goals are written. Instead, it creates a strategic rhythm around the most important outcomes that your organization is pursuing. The OKR framework should influence every interaction and foster continuous improvement in every review process.
- OKRs create clarity that is documented, measurable, and owned. The OKR framework provides accountability that is tracked and measured. This accountability works in both directions: each individual is responsible for their OKRs, and your organization's leadership is responsible for enabling their work.
Examples of OKRs
Objectives need to inspire your organization and its teams to fully understand your mission. Key results need to be specific and measurable within each quarter. The following example OKRs can help you as you work to design your own.
Objective 1: Be the top US provider of learning platforms to schools.
- 45 percent of K-12 schools using our platform
- A 12 percent increase in student engagement, as measured through internal systems
- A 95 percent satisfaction rate from quarterly parent surveys
Objective 2: Build a technology platform that supports every person in our business to innovate and create.
- Five new applications developed and adopted across the organization
- At least two members that use the Microsoft Power Platform on each team
- New cloud technologies like data analytics and machine learning introduced in all customer-facing applications
Objective 3: Transform our approach from sales-driven to data-driven.
- Increasing pipeline coverage from 50 percent to 200 percent
- Increasing closing rates for sales engagements by 5 percent
- Reducing the time to close deals by 8 percent
The following five steps can help your organization move forward with OKRs:
- Step 1: Learn. Start exploring what OKRs can do for your business. Tune in to some of your industry peers and leaders and learn how OKRs have benefited their organizations.
- Step 2: Plan. As you begin to draft your OKRs, ensure that your sponsors are contributing and involved in the process. Work with an OKR coach to refine your OKRs.
- Step 3: Launch. Each organization launches initiatives differently. Maintain a strong communication plan, and build OKR calibration and celebration process into your operating model.
- Step 4: Drive. Maintain rigor and focus by making sure that you share outcomes and results across your organization.
- Step 5: Improve. Continue to improve, revisit, and rethink how to connect more across your organization. OKRs in spreadsheets can be useful, but your organization will benefit most when everyone works together to meet objectives and gains insights from their aligned data.
Contact Ally.io to learn more about helping your organization move forward with OKRs.
Now that you've measured your business outcomes, you're ready to understand financial considerations.
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