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Goals (OKRs & KPIs)
February 6, 2017

Simple yet effective tips for successful goal setting

Henrik-Jan van der Pol
Henrik-Jan van der Pol
CEO, Perdoo
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Simple yet effective tips for successful goal setting

1. Without a metric, it’s not a Key Result

Key Results can be seen as a feedback mechanism for achieving your Objective. Without a metric, deciding whether you achieved an Objective or not is only based on gut feelings. That’s why when goal setting using OKRs, you should make every Key Result measurable.

2. Set OKRs so ambitious that they make goal setting feel uncomfortable

When defining a target for your Key Result, there’s a good rule of thumb: the Key Result should make you feel uncomfortable and getting to 70% should represent a significant achievement. The reason for this is that setting challenging goals unlocks creative thinking, and stretches your capabilities.

3. Ensure everyone in your company uses OKRs

OKR is a goal setting framework that, in theory, only needs to be used by a few people in a company, e.g. leadership and management. However, involving every employee, from intern to CEO, will help you tap the full potential of OKR. After all, you want everyone’s work to be connected to the company’s strategy. You want transparency on all levels so that everyone is aware of the company’s top priorities, and how they contribute to them.

4. Make OKRs part of your day-to-day business

OKRs are often misinterpreted as something you set at the beginning of a quarter and don’t touch again until the middle or even the end of the same quarter. Instead, you should keep your OKRs top of mind by making them part of your daily processes. If you frequently check in and update OKRs regularly you should see increases in transparency, happiness, and your success rate. If you have weekly team meetings for discussing to-dos and evaluating progress, base them on your OKRs. This is how you become a truly goal-driven company.

5. Focus on the Key Results that are actually key

When setting Key Results, it’s crucial that you focus on the most important outcomes. If you’re a SaaS company, an Objective could be to achieve the steepest revenue growth since launch. SaaS companies have different forms of revenue metrics such as Monthly Recurring Revenue (MRR) from new business as well as from accounts expanding. To save complication we recommend you focus on the highest possible denominator for the Objective: in this case the overall MRR.

6. Look at your vision & mission before setting your company-level OKRs

In a perfectly aligned company, all efforts contribute to the mission (the purpose of your organization) and bring you closer to your vision (where you want to be in 5–10 years). At Perdoo we combine both into what we call yourUltimate Goal. If you don’t have a mission or vision yet, it’s about time! Company OKRs should always push the company closer towards realizing its Ultimate Goal or fix problems that stand in its way. Your Ultimate Goal is great source of inspiration to pick the right Objectives.

7. Don't link OKRs to employee performance reviews

OKR is about your company's success, not individual employees’ performance. It's about uniting your workforce behind a bold Ultimate Goal and accelerating progress towards common goals. OKR also helps stretch capabilities. Set moonshot goals and learn how far you can get. Linking OKRs to performance reviews discourages employees to challenge themselves and set ambitious goals. Keep them separated.

8. Establish a structured OKR closing process

You’ve been working hard to achieve your OKRs, so it would be a lost opportunity to rush the process of reflection. Use the first week of the new quarter to step back and review last quarter’s OKRs. We recommend budgeting a full week to evaluate the performance of each Objective and Key Result, derive learnings and opportunities for improvement, and draft new OKRs.

9. Only use Key Results to calculate progress on Objectives

Most organizations set OKRs on a Company and Group level. This sometimes raises the questions if progress on a Group OKR should directly drive progress on the Company OKR it's aligned with. The answer is no. Group Objectives don't guarantee the success of a Company-level Objective, and only Key Results tell you with certainty whether you're getting closer or not. That's why Key Results should always be the single source of truth for measuring progress toward an Objective.


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