CEOs are busy people. They spend most of their time working hard to run their companies effectively. Objectives and Key Results, or OKRs, are among the most effective tools executive teams can use to achieve their results.
In this article, we will explain what an OKR is, how it works, and why you should use them. We will also show you a few examples from real life. Your company is only as good as its strategy; we've been doing this for nearly two decades, so translating your strategy into actionable OKRs for your team effectively aligns your teams. OKRs have become one of the most prominent goal-setting frameworks used company-wide and can help with performance reviews and coaching sessions.
What are CEO OKRs?
OKRs are objectives and key results. They are used to set goals and measure progress toward those goals. Once the OKRs are set up, we can ensure that the strategy makes it down to team managers with company OKRs and team OKRs. OKRs are fantastic as they can be used with standard metrics, like KPIs. (Read OKR vs. KPI article for a deeper dive.)
Why are OKRs useful for CEOs?
OKRs allow CEOs to focus on the big picture. Instead of spending hours reading reports and analyzing data, CEOs can simply focus on achieving their OKRs.
OKRs give CEOs a clear view of what they must accomplish each quarter. This allows them to plan and work on important tasks (such as cost controls and revenue growth) and avoid wasting time on unimportant tasks.
What are the Three Steps to Implement OKRs?
There are three main steps to implementing OKRs. First, identify your OKRs. Next, define your OKRs. And finally, track your OKRs. Read the leader's guide implementing OKRs for complete details.
Identify Your OKRs
First, identify your OKRs based on your company's strategy. For example, if your company has a growth strategy, your OKRs may include things like increasing revenue, reducing costs, growing customer base, etc.
Define Your OKRs
Second, define your OKRs using specific numbers. For example, if one of your OKRs is to grow revenues by 10% next year, you should write down exactly how much revenue you expect to generate next year.
Track Your OKRs
Finally, track your OKRs regularly. Even if you're following quarterly OKRs, you should review your OKRs every week at your weekly meeting so that your team can adjust as necessary to keep all of your OKRs on track.
This gives you a chance to see whether you're meeting your OKRs. If you aren't, you can adjust your actions (but not your OKRs!) accordingly. OKRs are one of the most popular performance management tools used by companies across the globe. Rhythm systems strategy execution software can help you track your projects, metrics, meetings, and more. You can learn more about the best OKR Software.
Expert CEO OKR Examples
The executive team can use the following ten examples of high-performance CEO OKRs (Objectives and Key Results) to measure their company's performance.
Objective: Increase Company Revenue
- Key Result 1: Increase quarterly sales by 15%.
- Key Result 2: Launch two new products by Q4.
- Key Result 3: Increase customer retention rate by 10%.
Objective: Improve Company Culture
- Key Result 1: Decrease employee turnover rate by 20% within the following year.
- Key Result 2: Increase employee satisfaction score to 90% by the end of Q2.
- Key Result 3: Implement a new employee recognition program by Q2.
Objective: Expand Market Presence
- Key Result 1: Enter two new markets by the end of the year.
- Key Result 2: Increase brand awareness by 25% in the new markets within six months.
- Key Result 3: Secure five new significant clients in the new markets by Q4.
Objective: Enhance Product Innovation
- Key Result 1: Launch three new innovative products by the end of the year.
- Key Result 2: File five new patents by Q3.
- Key Result 3: Increase R&D spending by 15% by the end of the year.
Objective: Improve Operational Efficiency
- Key Result 1: Reduce operational costs by 10% by Q4.
- Key Result 2: Implement a new project management system by Q2.
- Key Result 3: Increase the on-time delivery rate to 95% by the end of the year.
Objective: Enhance Customer Satisfaction
- Key Result 1: Increase Net Promoter Score (NPS) to 80 by Q4.
- Key Result 2: Reduce customer complaints by 20% by the end of the year.
- Key Result 3: Increase customer service response speed by 30% in six months.
Objective: Strengthen Brand Reputation
- Key Result 1: Increase positive online reviews by 25% by Q3.
- Key Result 2: Secure three positive media features by the end of the year.
- Key Result 3: Implement a new corporate social responsibility initiative by Q2.
Objective: Improve Employee Development
- Key Result 1: Increase the number of employees attending professional development courses by 20% by Q3.
- Key Result 2: Implement a new leadership development program by Q2.
- Key Result 3: Increase internal promotions by 15% by the end of the year.
Objective: Increase Market Share
- Key Result 1: Increase market share by 5% by the end of the year.
- Key Result 2: Outperform main competitor in key performance indicators by Q4.
- Key Result 3: Increase total number of customers by 10% by the end of the year.
Objective: Enhance Digital Transformation
- Key Result 1: Implement two new digital tools or platforms by Q3.
- Key Result 2: Increase website traffic by 30% by the end of the year.
- Key Result 3: Increase digital sales by 20% by Q4.
OKRs should be specific, measurable, achievable, relevant, and time-bound (SMART). They should also align with the company's mission, core values, and vision (learn about vision casting.)
Now let's explore how some of the most admired CEOs use the OKR methodology to improve their businesses.
CEO OKR Example: Netflix CEO Reed Hastings
Netflix CEO Reed Hastings has been using OKRs since 2012. He uses them to set goals for his team members and measure progress against those goals. He says that he sets quarterly goals for each member of his team. Then, he estimates whether or not they met those goals. If they did not, he held them accountable.
For example, if a team member didn't hit a goal, he would tell him/her precisely what was wrong and give him/her specific steps to correct the issue. This accountability system works well for Netflix. Their employees are held responsible for meeting goals. And they are rewarded for hitting their goals.
CEO OKR Example: Walmart CEO Doug McMillon
Doug McMillon is another successful CEO who uses OKRs. His team members report directly to him. They are expected to come up with goals for themselves and their teams. Then, they are held accountable for achieving those goals.
McMillon uses OKRs to hold himself accountable too. For example, he sets yearly goals for his company. Then, he measures his progress against those goals. He takes action to improve his results if he fails to hit his targets.
CEO OKR Example: Starbucks CEO Howard Schultz
Howard Schultz is an American businessman, former president, and chief executive officer of the Starbucks Coffee Company. Schultz has been using OKRs for over 20 years. He believes that they are a vital part of any organization's strategy.
His team members are expected to develop goals for themselves and their team. Then, they are measured against those goals. As a result, they feel motivated to achieve success and continue their global sales expansion.
CEO OKR Example: Amazon CEO Jeff Bezos
Jeff Bezos is the founder and CEO of Amazon.com. He founded the company in 1994. Bezos has been using OKRs ever since. He says he wants his team to focus on customer service, innovation, and operational excellence.
He uses OKRs to ensure that these areas are prioritized. He ensures that each required team member has at least one OKR associated with one of these high-priority areas. It allows them to keep the focus on getting better at one of the company's core competencies.
CEO OKR Example 5: Apple CEO Tim Cook
Tim Cook is the CEO of Apple Inc., a multinational technology company headquartered in Cupertino, California. Cook joined Apple in 1998 after serving as IBM's general manager of the Macintosh division. Since then, he has led Apple through several significant transitions.
Cook has been using OKRs to guide his decisions. He says that he uses them to drive employee engagement. He says that they allow him to identify company opportunities and challenges. This helps him prioritize tasks and allocate resources effectively.
These are just a handful of examples of successful CEOs who use OKRs. We can help you get into the Rhythm needed to complete your goals! Feel free to drop us a line if you'd like to learn how to write goals, expertly facilitate your strategic meetings, and use the strategy execution software to keep track of it all.
Looking for some additional OKR examples to help get you started?
Photo Credit: iStock by Getty Images
Photo Credit: iStock by Getty Images