ROI from OKRs – Stretch!

Posted by Bo Pedersen
on September 24, 2018

In this blog series, we will be looking at the potential return on investment from implementing Objectives and Key Results (OKRs).

Across 5 articles we will look a how the different characteristics of OKRs drive return on investment (ROI).

In this first article, we will review how stretch goals drive performance.

Bottom Line: Stretch goals lead to higher higher performance (caveat).

A stretch goal is attainable only through significantly improved performance.

If we index the average performance of a given process at 100, but which has operated at 30% above average for periods of time, a stretch goal might be to increase average performance to 130, a 30% improvement.

Someone tasked with improving this process would have two main options available to them, assuming all else equal (i.e. no additional resources):

  • Work Harder
  • Work Smarter

Work harder

Work more. Sometimes the answer to getting something done is to simply get up at 5am to get a head start, or keep going past 5.30pm until it’s done.

Work more of the hours. Whether you like the 7 Habits, or fancy yourself a Pomodoro Master, we can all improve how we spend our time between 9-5 to get more done. According to a recent study, most people spend less than 3 hours per day actually being productive.

Work Smarter

Eliminate. “We’ve always done it this way.” What can we stop doing? Do we need to collect all this information?

Automate steps in the process. Are we doing manually what we could do automatically? Can we ask users to self-serve?

Innovate the process. What are we missing? What jobs are our users trying to get done? Which experiments can we run? What do we need to learn?

ROI from Stretch Goals

Edwin Locke and Gary Latham conducted research in the area of goal setting and goal theory.

The Key findings from the study were that goal attainment is positively and linearly linked to goal difficulty.

Bottom Line: Stretch goals lead to higher higher performance (caveat).