Going Big: OKRs for large businesses
Originally developed at Intel and now used by companies like Google, Amazon, and Facebook, OKRs have a proven track record of getting results for large-scale enterprises. With hundreds of thousands of employees located across multiple offices, these companies have successfully confronted the challenge of scaling OKRs across their organization.
In big companies, OKRs are a powerful way to “cultivate connections among far-flung contributors… give rise to fresh solutions, and… keep even the most successful organizations stretching for more” (John Doerr, Measure What Matters). Here, we’ll discuss why and how to implement OKRs in large organizations.
Enterprise OKRs: opportunities and challenges
OKRs offer an opportunity to tackle some of the most common challenges faced by large businesses, like communicating and coordinating across teams. However, the very things that make them so useful for enterprise organizations can also make them difficult to implement.
When kicking off an OKR process at a big company, there are a few aspects to keep in mind. You’ll want to make sure the whole team understands how to use OKRs, and why they are being implemented. You’ll also want to assign an OKR Champion to take charge of the OKR process—Champions are responsible for ensuring the process stays on track, and team members are regularly updating their Key Results.
Benefits of OKRs at large companies
Organizations can benefit from OKRs in many different ways. Here are some of the ways that OKRs can boost productivity for large companies in particular:
Keep teams aligned
One of the major problems large businesses face is a difficulty maintaining consistent communication between teams (especially when geographically dispersed). Occasionally, this can lead to problems. If multiple teams end up accidentally working on redundant projects, this can eat up both time and money. Moreover, cross-team projects become difficult to execute in the absence of a regular communication flow: one team may end up falling behind due to conflicting priorities, leading to frustration and challenges with completing the project.
OKRs increase opportunities for communication. The need to create a coherent strategy across the organization will ideally lead to increased alignment between teams and reduce the “silo effect”.
Another challenge faced by large companies is a temptation to do things the way they’ve always been done. Legacy organizations are, by their very definition, already highly successful, so there is sometimes a tendency towards using the tried-and-true methods that have worked in the past.
OKRs, when used the way they are designed to be, are a great tool for expanding beyond this mindset. Setting moonshot goals (stretch goals) and aligning OKRs encourages innovation. The goal is not only to accomplish what needs to be done, but also to go bigger and better—whether that means honing business processes, growing revenue, encouraging collaboration across teams, or otherwise improving the company. The conversations that OKRs open up can lead to some new and exciting ideas.
Increase employee engagement
Finally, OKRs can increase employee engagement by allowing employees to be involved in decision-making at the most basic level. By setting bottom-up goals for the company, and also encouraging employees to set their own inspiring personal goals, OKRs can be a motivating force. Employees who feel caught up in their granular day-to-day tasks will need to put some time aside to focus on the meaning of their work. They’ll be able to use OKRs as a “personal roadmap”, as well as a way of connecting with the organization’s purpose.
Challenges with OKRs at large companies
Of course, while implementing OKRs at a large company has many benefits, it’s not without its challenges as well. Here are some pain points you might face, with tips on how to avoid them:
Cascading vs. Alignment
One way of creating an OKR plan in an organization with a large hierarchy is by “cascading” OKRs. Top-level managers decide on organizational goals, and their Key Results subsequently become the Objectives for the next level downwards.
While this method is straightforward, it also suffers from a few flaws. Cascading OKRs is inflexible, and changes can take a long time to implement. Moreover, opportunities to connect horizontally (between teams) are limited. To avoid these issues, it’s often more effective to align, rather than cascade, OKRs: allow at least some OKRs to be designed in a “bottom-up” fashion.
Staying consistent with the process
Another challenge often faced by big companies deploying OKRs is maintaining consistency. Individuals need to be encouraged to create OKRs at the start of each cadence and update them regularly, and there should be transparency throughout the company, so that members of different teams understand what is going on at a macro-level.
Two good ways to combat difficulties with consistency are 1) assigning an OKR Champion, and 2) investing in OKR management software to keep things organized.
Enterprise OKR examples
In a large organization, you’ll typically need to set OKRs at four different levels: Company, Department, Team and Individual. Some lower-level OKRs can be set in a top-down way, while others can be set in a bottom-up fashion—a healthy company should have a mixture of both.
Here are some OKR examples for large companies:
Objective: Accelerate our global growth
- Hire 50 new personnel at our EMEA offices
- Achieve $500M in total global sales
- Produce localized marketing materials in our top 6 geographical markets
Department Level (Marketing)
Objective: Speak the language of our prospects
- Hire a country manager for each of our top 6 geographical markets
- Release localized website in our top 6 geographical markets
- Produce 2 new ad creatives for each of our top 6 geographical markets
Team Level (Customer Experience)
Objective: Crown the customer
- Gather feedback from 10 customers each month
- Reduce customer support ticket response times to 2 hours
- Increase customer retention to 90%
Individual Level (Human Resources)
Objective: Supercharge our company culture
- Execute a company fitness challenge with 85% participation
- Produce a summary of results from employee engagement surveys
- Achieve 100% positive feedback on this year’s holiday party
Hopefully, this should set you on the right track for launching an OKR process at your large organization.
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