A HR Odyssey in Goal Setting

Setting goals!

It can turn out to be a total game-changer!

But here's what goals are. Your vision of the future.

Now, there are two ways to face the future. One, with apprehension. Number two, with anticipation. 

Unfortunately, many people tend to face the future with apprehension, often because they haven't thoughtfully designed it.

If you're asking, "What's in it for me?" then let me share my experience in goal setting as an HR professional. Implementing goal-setting exercises in various organizations has been both challenging and rewarding.

While I possess expertise and a solid understanding of the framework, tailoring it to meet each organization's unique needs is essential.

Let's take a quick tour through the evolution of goal-setting methods over the years.

Goal-Setting Methods:

MBO (Management by Objectives)

Back in 1954, Peter Drucker introduced MBO, all about those SMART objectives. It's like the OG of aligning personal goals with what the bigwigs want. Think IBM, Procter & Gamble, GE, and Ford—they're MBO enthusiasts.

OKR (Objectives and Key Results)

Fast forward to the '70s, Andy Grove shook things up at Intel, and later John Doerr made OKRs cool. These babies are the transparency, alignment, and agility champions, with Google, Intel, LinkedIn, and Twitter swearing by them.

SMART Goals

In the '80s, SMART goals stepped in, championed by various management minds. It's all about specifics—making goals specific, measurable, attainable, relevant, and time-bound. GE, Microsoft, and IBM? They're all about that SMART life.

GROW Model

In the '80s, Sir John Whitmore gave us the GROW Model—Goals, Reality, Options, and Willingness to act. It's the coach's favorite, focusing on achievable goals and personal development. Not tied to specific companies, but it's a rockstar in coaching and personal growth circles.

Balanced Scorecard

Kaplan and Norton dropped the Balanced Scorecard bomb in the '90s, balancing financial and non-financial goals like pros. Analog Devices got the party started, and now Siemens, FedEx, and AT&T are on the Balanced Scorecard bandwagon.

One can conclude that each method has its strengths and limitations, and organizations choose or adapt methods based on their unique organizational needs.

Alright, drawing from my recent years dealing with OKRs, let's dive deeper into the topic!

In his book, High Output Management,'' Andy Grove, former CEO of Intel, describes how to effectively build a system for sharing goals, such as OKRs. states that two questions need to be answered:

What do I want to aim for? The answer to this question is your goal.

How can I measure my progress toward my goals? The answer to this question is a milestone or outcome measure.

Companies that spend significant time discussing strategic priorities & crafting OKRs can improve their overall strategy and align their teams easily.

To start with OKRs, you can use these formulas to write Objectives & Key Results.

Keep in mind:

• Set your goals at a high level, sometimes even a little daunting.
• Performance metrics should be measured numerically and easily evaluated.
• Make OKRs public to everyone in your organization so everyone can see each other's work.
• For OKRs, an ideal goal achievement rate is 60-70%. On the other hand, if the completion rate is always 100%, you can say that the OKR setting level is low and you need to set more ambitious goals.
• If the evaluation is low, use it as data to improve the next OKR.

Remember, OKRs aren't meant to judge employees or be some shared to-do list tool inside the company.

Achievable or Moonshots?

When we set goals that are higher than we think are possible, they’re called "stretch goals". 

In many cases, these goals attract top talent and create a vibrant workplace. Additionally, if you set your goals high, you can often make significant progress even if you don't reach them.

The key here is to communicate the nature of the stretch goal and the criteria for determining success. Each company defines its own % ratio, to be considered as successful. Achieving all OKRs is considered an amazing accomplishment.

These stretch goals are the basis for long-awaited feats like the moon landing, or "moonshots."

How can you get started with introducing OKRs to your organization?

The key to OKRs is their transparency. When introducing OKRs to your organization, be clear about what they are, why they're useful, and how you'll use them. Research has shown that people achieve better results when they aim for goals they agree with. Therefore, it is important that everyone is actively involved in the goals.

Tips for Rolling Out OKRs:

Unification of recognition

With OKRs, everyone understands what is important to the organization and how the achievement of its goals will be measured, making it easier to connect their own challenges to the organization's goals.

Discipline and priorities

As a member of an organization, it's hard to argue against good ideas, worthwhile projects, and needed improvements. However, once everyone agrees on the most important goals, it becomes easier to disagree with less important ideas. Instead of dissenting for political or emotional reasons, you can react rationally based on goals already agreed upon across the organization.

Communication

OKRs should be published within the organization to communicate the organization's goals and performance metrics to all members.

Set Goals & Performance Metrics

When setting goals, it is often suggested to start by setting OKRs for your organization. Set 3 to 5 goals, set about 3 performance indicators for each goal, and decide on overall priorities. OKR can be expected to be highly effective by combining both top-down and bottom-up proposals. To do this, everyone in the organization needs to be able to express their opinions on what they think is worth their time and how they can reach their full potential.

Tips for Setting Goals

• Limit your goals to 3-5. Too many goals can overburden your team and cause them to become distracted and lose focus.
• Avoid phrases that don't aim for greater heights, such as "continue to hire," "maintain market position," or " continue to do X."
• Use expressions that indicate a goal or state, such as "climb a mountain," "eat five pies," or "implement feature Y."
• Use specific, objective, and clear language. It must be objectively clear whether the goal has been achieved. Research shows that the more specific your goals are, the more likely you are to achieve them.

Tips for Setting Performance Metrics

• Set about three performance indicators for each goal.
• Create indicators that are measurable and that, if realized, will directly lead to achieving the goal.
• Define the outcomes of actions, not actions. For example, if you include words such as "consult," "support," "analyze," or "participate," you are defining an action. For performance indicators, describe the results of your actions, such as "Publish customer satisfaction by March 7th" instead of "Evaluate customer satisfaction."
• Measurable indicators should include evidence of completion. Such evidence must be available, reliable, and easily found.

Pitfalls to Avoid

Setting clear goals with OKRs and measuring achievement through agreed-upon performance indicators increases team motivation for success and allows organizations to focus on high-priority goals.

On the other hand, if the OKRs he has set are inappropriate, there is a risk that the strategy will be confused, the internal indicators will become a mere shell, and the team's mentality will lean toward maintaining the status quo. When setting OKRs, beware of these pitfalls:

Develop OKRs for your team

How OKRs are developed depends on the situation, but stating your organization's goals first allows teams and individuals to take them into account when setting their own goals. This method ensures consistency of OKRs across the organization.

The next thing to decide is how many layers you want to divide your organization into and set "team OKRs." Consider at what level you need OKRs: by department, by function, by subgroup, etc.

When setting team-level goals, it is not necessary to reflect all of the organization's OKRs in each team's OKRs. You can also focus on just one of your organization's OKRs and set your team's OKRs. However, your team's OKRs must relate to at least one of your organization's OKRs.

One way to set OKRs for your team is to get all team leaders together to set goals. Each team leader may also list priorities for the next quarter, aligned with the company's OKRs. As you write down these priorities, keep in mind the alignment with your organization's OKRs and consider the following:

Are the team's priorities tied to any of the organization's performance metrics?

Do the team's priorities increase the likelihood of achieving the organization's OKRs?

Are there any issues that people outside the team think this team should work on?

Do you have three or more priorities?

Please note that OKRs are not a checklist. It's not a list of things your team needs to work on this quarter. If you interpret OKRs as a "team-shared to-do list," you could end up listing what you want to accomplish as a team rather than what you need to accomplish.

OKRs are about defining what kind of impact you want to have as a team and figuring out how to achieve it.

Examples of OKRs for teams and individuals:

OKR evaluation

Typically, you can rate OKRs as a number between 0.0 and 1.0. 1.0 means the goal was completely met. Evaluate the performance indicators individually and evaluate your goals based on their approximate average. The reason I say "approximately" here is because some performance indicators are weighted differently.

For example, if the performance metric was " Start a new widget marketing campaign, "the score would be either 0 or 1 because the final result is "Started or not." On the other hand, if the performance metric is “Release 6 new features'', the OKR will be evaluated as 0.5 if only 3 are released.

It may not be scientific, but what is important is whether it accurately reflects the actual situation and, above all, whether the evaluation method is consistent.

Things to consider when evaluating OKRs

The optimal success rate for OKRs is approximately 60-70%. Anything lower than this may mean the organization is underperforming. If your percentage is higher than this, you may have set your goals too low. Ideally, all OKRs should average between 0.6 and 0.7 using a 0.0-1.0 rating system.

When implementing OKRs for the first time, you may feel uncomfortable setting goals that seem unnatural and impossible to achieve.

OKRs are not a tool for evaluating performance. In other words, OKRs are not a comprehensive way to evaluate an individual or organization. Rather, it is used to summarize the work that an individual has focused on in the previous period and to highlight their contribution and impact on the organization's OKRs.

Publish your organization's OKR evaluation. At the organizational level, one should practice evaluating and sharing the organization's OKRs annually and quarterly. At the beginning of the year, hold a company-wide meeting to share evaluations of the previous year's OKRs and publish the new year's and quarter's OKRs.

Thereafter, hold quarterly all-hands meetings to review the evaluation and set new OKRs. During the company-wide meeting, each OKR owner (usually the leader of the appropriate team ) discusses the evaluation and adjustments for the next quarter.

Validate OKRs during the quarter as well. Examine OKRs at all levels midway through the quarter as a prelude to a final evaluation so that individuals and teams understand where they are at the moment. The results of the quarterly validation will prepare you for the final evaluation.

Update OKRs regularly

OKRs are part of the goals you are trying to achieve as a company. For some teams, revisiting OKRs several times every quarter can bring them much closer to achieving their goals.

By adjusting goals using OKRs, you can make it easier for everyone on the team to reflect new information, drop goals that are unlikely to be achieved or add resources that have a 50/50 chance of being achieved. It will be easier to take actions such as focusing on your goals. Below is an example schedule for working on setting OKRs as a team.

One often asks what is the difference between OKRs and KPIs!

OKR and KPI - are the foundation of the success of any organization. But a question often arises if you already have  KPIs then is it necessary to have OKRs? If yes, how are they two different?

Let the OKR journey begin!