Creating Exceptional Performance through Objectives and Key Results

Switzerland recently celebrated its most successful Olympic performance in nearly 70 years. The team returned with a record-breaking result from the Tokyo Summer and Paralympic Games with 13 and 14 medals respectively. Like all successful sporting teams, close interaction between the athletes and coaches was a key factor in this success.

But imagine if coaches only gave feedback once or twice a season or at the beginning and end of the Olympics. How well would the athletes perform?

Yet this is how many organisations manage performance among team players; setting annual goals that have little buy-in from their team members and are not regularly revisited. Moreover, managers are often ill-equipped to provide effective and honest individual and team feedback and recognition or to conduct conversations about achievable goals.

Organisations are mobilising significant resources around performance management with sub-optimal returns. The impact of performance management processes on employees is significant – with positive and negative outcomes depending on how well it is managed.

To achieve the shift to a more inspirational and motivational performance management approach, we recommend the use of “Objectives and Key Results” (OKR). OKR is a goal setting and performance management methodology used by many leading organisations such as Adobe, Intel, Gap, Google, LinkedIn, Spotify and Twitter.

OKRs have five key benefits. They:

  1. Enable companies to “repurpose thousands of working hours and millions of dollars from tasks that do not drive performance”. For this reason, about 70% of multinational companies are moving to a form of OKR performance management and away from the annual review process. (Sources: GAP Inc. and HBR, The Performance Management Revolution)
  2. Help teams focus and deliver higher results on what matters and define what not to address. This is especially important where teams are working remotely.
  3. Aid in the development of employee trust, engagement and recognition because they rely on regular communications and feedback and are targeted to the specfic needs of team members.
  4. Support transparency across teams and incentivise people to collaborate and help each other win. The approach relies on ongoing conversations with teams to re-align goals and determine how they can work together to achieve them.
  5. Allow companies to become more agile through the regular review processes.

There are three critical components to OKR performance management systems: Objectives, Key results and Feedback:

  • Objectives are big-picture and qualitative in nature. Leaders set the stage by establishing organisational objectives which are inspirational and exciting.
  • Key Results are focused and quantitative. They are future oriented and help you assess how you will reach your objectives by measuring how well you are progressing toward your objectives, if you are on the right track or need to shift your focus. Key results need to be developed by the team where each individual becomes accountable for achieving a specific key result in a way that creates a sense of ownership. Key results should be challenging but achievable. Establish about three key results for each objective.
  • Feedback along with regular communication and monitoring of progress towards objectives, is essential. Many companies hold short weekly meetings where everyone briefly shares progress, asks for help where needed and discusses potential challenges.

An OKR approach differs from the standard annual performance management process in several ways. For example, key results are outcome and not task based, regular real-time feedback is provided to and from managers, colleagues, direct reports and others, rather than in an annual planning meeting. Performance management and compensation discussions are separated to focus on the development of team members.

As in the case of the Olympics, implementing an OKR approach takes times and discipline but it can also help teams deliver gold medal performances and business results alike.

The future starts now

Contact us if you’re looking for an understanding partner to help you navigate your organisation through these unpredictable waters.

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Our next article will outline the review and implementation process including reviewing your current performance management processes, communicating with and upskilling teams to successfully implement an OKR based performance management system as well as pitfalls to avoid.

This article was originally featured in HR Today Magazine.

Contact us

Jose Marques

Jose Marques

Director People and Organisation and Leader New world. New skills., PwC Switzerland

Tel: +41 58 792 96 34

Kevin Boti

Kevin Boti

Manager, People & Organisation, PwC Switzerland