OKR: What Is It?
As the name suggests, the OKR concept consists of two components: "Objectives" and "Key Results."
- Objectives: These are the goals that a company, department, or team wants to achieve. They should be as clear and specific as possible. It's important that the goals are challenging yet attainable.
- Key Results: These are the specific, measurable results that indicate whether an objective has been achieved. They represent the quantitative or qualitative metrics used to track progress towards the goals. Key results are typically defined with numerical data and deadlines.
The OKR framework also requires regular reviews and updates to assess progress towards these key results, allowing for adjustments at any time.
General Benefits of OKR
While the definition of "Objectives" and "Key Results" must be specific to each company and business process in practice, and will thus yield specific advantages for each company, the method and framework itself offer some generally applicable benefits:
- Agile Goals: Instead of a static annual plan, OKR uses an agile planning approach. With shorter planning horizons, companies can better respond to changes.
- Easy Implementation and Use: The implementation and use of the OKR concept are relatively simple. The individual OKRs are also very easy to understand. Intel's original model set monthly goals, requiring a lean process.
- Reduced Time for Goal Setting: Companies that use OKR typically reduce the time spent setting goals from months to days, allowing them to invest their resources in achieving their goals rather than in goal-setting.
- Transparency: A core goal of OKR is to promote goal alignment within the company. Therefore, OKRs are usually publicly available at all company levels – everyone has access to others' OKRs. Some companies even publish the management's OKRs on their intranet.
- Nested Planning Horizons: The creators of OKR recognized that strategy and tactics often move at different paces, as tactics generally change more quickly. To address this, OKR employs different planning horizons:
- A strategic planning horizon with high-level, longer-term OKRs for the company (usually annually).
- A tactical planning horizon with shorter-term OKRs for teams (usually quarterly).
- An operational planning horizon for tracking OKR results and initiatives (usually weekly).
- Bidirectional Goal Setting: The traditional top-down approach to goal setting takes too long and adds no extra value. Therefore, OKR uses a bidirectional approach, both top-down and bottom-up. The management sets strategic OKRs, which each department then uses as a basis for its own OKRs. These tactical OKRs should also align with the company's strategy for other departments. Typically, 60% of a company's OKRs are set bottom-up in consultation with management.
Using OKR in Service Level Management
Given all the general advantages of OKR, the question naturally arises whether and how the method can be used in SLM. Regarding the described approach – defining, controlling, and adjusting goals and key results – both concepts fit together very well. When OKR is used for SLM, the following benefits emerge:
- Clear Service Goals: OKR helps define clear and measurable service goals, such as uptime, response time, or service availability. These criteria are the basis for successful Service Level Management.
- Alignment with Business Goals: OKR enables the alignment of service level goals with the company's overarching strategic goals, ensuring that IT services directly contribute to achieving business objectives.
- Quantifiable Metrics: As mentioned, key results in OKRs must always be quantifiable and measurable. This allows the SLM team to capture and demonstrate service performance using specific metrics and KPIs.
- Transparency: This general advantage of OKR is particularly important for Service Level Management, as it makes service level goals and service performance visible to all stakeholders, including management and end users, leading to greater trust and accountability.
- Higher Performance: The OKR framework encourages continuous performance optimization. The SLM team can regularly evaluate the key results and goals, identify areas for improvement, and make necessary adjustments.
- Data-Driven Decision Making: OKRs are always based on data and KPIs to evaluate performance. This enables the SLM team to make informed decisions and optimize service quality.
- Traceability: OKRs make service performance traceable, not only for the SLM team but also for other relevant departments such as IT operations and the service desk.
- Flexibility: OKRs help provide more flexibility in Service Level Management. Instead of relying on static service levels contractually agreed upon in the past, the SLM team can respond to changing service level requirements, especially for new technology trends (e.g., cloud adoption) or changing end-user expectations (customer experience).
- Customer Satisfaction: Meeting service level goals with OKRs typically leads to higher customer satisfaction. The better the provided IT services function, the more satisfied the end users are.
- Strategic Planning: OKRs assist the SLM team with strategic planning, such as setting goals for implementing new SLAs or optimizing existing SLAs.
Integrating OKRs into SLA can improve the effectiveness of IT services, align them with the company's strategic goals, and promote the continuous improvement of service delivery. It also fosters a culture of accountability and transparency, which is essential for the success of SLA.
OKR as an Integral Part of klaricore
At the BizOps Forum Masterclass in October 2023, we introduced klaricore, our self-developed SaaS solution for SLA management and KPI reporting, to the public for the first time. Since we are convinced of the advantages of the OKR framework, it will be an integral part of klaricore.
If you would like to know more, please contact your amasol representative.