What Is An Objective In Company Objectives And Key Results?
What is an objective in company OKRs? We've written several articles about this topic but for this publication, we discuss objectives at a deeper level.
In our previous articles, we talk about the OKR framework and how it can help your business or organisation succeed. Today we are going to do a deep dive and explain what is an objective.
You’ve seen how giant companies like Google, Amazon, and Microsoft capitalised on this framework to fuel growth, boost employee performance, and achieve impressive milestones.
And now, you’re more than willing to try it for your company.
Not so fast.
Learning how to set OKRs may look simple. But to ensure success, you need to understand the two components of this framework: objectives and key results.
Today, we’ll focus on OBJECTIVES.
In business, the term “objective” is the GOAL that a company aims to achieve.
In OKR, an objective is a brief yet specific outcome it wants to achieve in a definite timeframe.
Objectives answer the vital question “Where do I want to go?” Think of it as a destination on a map.
The moment you unfold it, you know exactly how to get there, how many cities, towns, or regions you need to pass through, and an estimate of how long it would take you.
What is an objective and its characteristics
In OKR, objectives are the outcomes that reflect the priorities of an organisation.
Below are the key characteristics of objectives:
Group objectives (those that are created by departments, segments, or smaller groups in the organisation) should be aligned to the company OKRs set by the leaders or executives.
Each objective has a due date. Objectives should be kept within a short and strict timeframe. Why is this so? This is to encourage employees or team members to focus on their goals and review them in cycles.
Creating a timeline enables OKR holders to identify what’s working and what isn’t so they could change the course if their OKRs are not contributing to your company OKRs.
Objectives are ambitious and should often make a person feel uncomfortable. They should always be the things that when achieved, will have a hugely positive effect on your organisation.
OKRs involve everyone in the organisation. Each person (employee or team member) has their own set of OKRs which are made accessible to the entire organisation.
Not only does it promote transparency, but it also promotes collaboration and cross-functionality across teams.
Objectives clearly state what the person has to go through to achieve the desired outcome.
Every objective also has a corresponding key result. The key results are scored. Check out how Google scores its OKR here.
Objectives in OKR: Ambitious yet Achievable
In companies that adopt OKR, objectives go beyond what each team member expects from their role. It’s going the ‘extra mile’ to contribute to the organisation’s success.
Let’s take a look at a few examples of objectives and examine whether they fit the qualities of an OKR:
“Make our website better.”
While it sounds like a great objective, this statement does not clearly state what the company wants to achieve. It doesn’t answer the question – what is it that you want to accomplish? What is your desired outcome?
A clearer, more specific objective will be something like this:
“Improve targeted traffic to the company website by 30%.”
Let’s have another example.
“Increase online sales.”
Again, this one is vague because it does not state a specific desired outcome.
A more specific objective will be something like:
“Increase website conversions by 35%.”
“Grow sales from the company online store by 85%”.
In OKRs, the objectives you create should be attainable and challenging at the same time. Objectives should be something that is beyond your comfort zone.
So, for example, if you are constantly hitting your revenue goals, you can consider increasing it by 25% in the next six months.
Of course, you want to make sure that even though it is challenging, your objective should be realistic. Make use of data (such as sales records for the past few years and other relevant information) to verify whether you are aiming for a stretch goal.
Dos and Don’ts in Writing Objectives
Don’t go overboard.
When setting objectives, you want to prioritise things that have more impact. By practicality, you can only have 3-5 objectives for a certain “period”.
When choosing objectives, list down the goals you want to achieve and then rank them based on their impact on your company OKR. Use the five-why analysis to figure out which objectives are the most critical ones.
Do set a deadline.
What sets objectives from goals is that the former is time-bound.
Don’t stray away from your company OKRs.
One common mistake by many organisations is treating all of their OKRs are the same. However, no matter how many OKRs your organisation has, at the end of the day, there is only one top priority – and that is the business’ OKR.
Nonetheless, at any given point, everyone in your team or organisation should feel confident that their work is contributing to your company’s top priority.
Make it concise.
Objectives should be clear and specific. Usually, it’s a one-liner phrase or statement that is easily understood.
Group Objectives & Company Objectives
Objectives and Key Results are usually categorised into two – group (team) OKRs and company (organisational) OKRs.
Before the rest of the organisation is asked to make their OKRs, heads, leaders, and executives will first determine the company OKR.
Once established, these OKRs are cascaded to the entire organisation. Only until then can departments, teams, business units, and frontline employees can work on their Objectives and Key Results.
I hope this article answered your main questions: what is an objective. If you liked this article and you are looking for a way to align everyone in your organisation, let’s have a call or simply download our OKR Guide.
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