As a leader, is it your job to help people be accountable for results, or hold people responsible for not achieving the desired results? If you are like me, you would prefer to help your managers be responsible for exceptional results instead of holding them accountable when results are lacking. Here is a tool that is used extensively by Intel, Google, Zynga, Oracle and many other companies to lead their industries.
If you are a manager, you have probably heard of KPIs, that is Key Performance Indicators. KPIs track how you are performing against any particular goal. For example, say that you want to make sure that you do not exceed budget appropriations. That is a simple KPI - know what level of performance is acceptable and track consistently it to maintain focus and clarity amongst your team.
Now, obviously, tracking a KPI in and of itself does not do any good. What matters is that you take that information and do something with it. That is where Objectives & Key Results (OKRs) come in. Where a KPI can identify whether or not you are not on track to reach your performance goal, OKRs can be used to change the trajectory of your performance level.
Let's take our example of not exceeding budget appropriations. If you are tracking performance with a KPI (actual vs. expected spend rate by month), you can see when it starts to get off track. That is when it is time to implement an OKR to change the trajectory.
This is where you can help your managers be accountable for results. When you see the performance starting to slip, you have a couple of options:
Door #1. Question the results until there is not enough time to reverse the trend. (Hint: this is not a good plan, or indeed any plan at all!)
Door #2. Tell your managers that they will have to "do better" and hope that they do. (Hint: If you have great managers, they might be able to pull it off. However, neither you nor they will know whether or not it is working until it is too late. Then you may have to "hold them accountable.")
Door #3. Two words: Spending Freeze! (Hint: Too much? Not enough? Who knows? At least we are doing something.)
Door #4. Engage your managers to come up with an OKR (Objective & Key Results) to enact a specific action plan to reverse the trend. Track the results with your people and adjust accordingly.
Our recommendation: Door #4
Sit down with your managers and ask them to come up with an OKR. A good OKR might look something like this:
Get spending back in line with budget estimates within the next quarter.
1. Actual spending cut to 105% of expected spending within 30 days.
2. Management identification of sustainable savings in each department that will equal or exceed the budget-busting line items within 45 days.
3. Actual spending cut to 98% of expected spending within 90 days.
To be most effective, Objectives need to be clear, ambitious, time-bound and actionable. Key Results must be quantifiable, link to the achievement of the Objective, and be able to be impartially reviewed.
Once you have clarified the Objective and Key Results, you can then pretty quickly come up with some specific initiatives to effect the change. Here are a couple of examples:
1. Within one week, identify and list the line items that are 10% or m.ore overspent.
2. Within two weeks, meet with those line item decision makers to review performance and continue meeting bi-weekly until the objective is completed.
3. Produce and communicate a bi-weekly budget to actual comparison report until the trend is reversed.
OKRs and KPIs work beautifully together. KPIs track your performance, and OKRs are used to affect change when your performance is not meeting expectations. Use this tool to HELP your managers be accountable for results so that you don't have to HOLD them accountable for not reaching the results.
Interested in finding out more about KPIs, OKRs and how this alphabet soup can help drive your community's strategy? Find out more at http://www.jdgraygroup.com/strategic-planning or contact us anytime at 972-885-6472 | firstname.lastname@example.org.