OKRs Offer Nonprofits a Better Approach to Goal-Setting Success
The most successful organizations are able to collectively identify and engage around measurable goals. Many of them utilize objectives and key results (OKRs) to achieve these top priorities.
OKRs are a goal-setting system first pioneered by Andy Grove at Intel in the mid-1970s and then by Silicon Valley companies, such as Google, during the tech boom to set ambitious, measurable goals and establish ways to tangibly show the results. OKRs create alignment within the organization, putting everyone on the same path while providing a framework for tracking progress.
While for-profit organizations have used OKRs for years, nonprofits, for the most part, haven’t yet embraced the system to help them run their organizations. That’s unfortunate, since there is much nonprofits can learn from deploying OKR principles. From improving the way nonprofits plan, to establishing objectives that have measurable outcomes, OKRs encourage teams to aim higher in their approach to goal setting and offer a lot of flexibility in adjusting the path they take to get there.
Nonprofits can utilize the OKR system to, for instance, increase the organization’s efficacy in advocating for policy changes. They can use it to improve fundraising, engage more members, hone their mission and vision, advance their thought leadership, or elevate overall team performance, to name just a few examples.
Their reticence is understandable. Implementing OKRs can be challenging for nonprofits, as it shifts their operational perspective from output to outcomes. OKRs use these outcome-based metrics to drive and measure the impact of the organization’s initiatives and projects as opposed to just measuring the number of initiatives and projects executed. This shift often reveals that many nonprofits don’t have substantive data about their impact (Clear Measurement Counts, Kim Jonker and William F. Meehan III, Stanford Social Innovation Review, Mar. 20, 2014).
There can be cultural barriers to overcome as well. Nonprofits are often weighed down by a legacy of doing things a certain way, traditional governance and planning structures, and adoption of disruptive new approaches may be challenged. OKRs can also introduce a higher level of transparency and accountability within teams that some may find discomforting. OKRs are clear, simple, and precise, cutting through the less precise business jargon and performance metrics often found in the goals of many nonprofits.
The advantages of implementing OKRs far outweigh their complexities. We at Inteleos, a global non-profit community of over 120,000+ medical professionals united in assuring that patients obtain the highest quality healthcare, have been strong proponents and users of the OKR system for a number of years with measurable success. We have implemented team-based OKRs across operations within virtually every team. Along the way, we learned some key lessons on how nonprofits can adopt OKRs more effectively.
First, OKR systems need to be leadership driven. Inteleos’ program was introduced by our CEO and inspired by John Doerr’s seminal book on the subject — Measure What Matters. Since then, the executive team has worked hard to realign the organization’s mission and people, defining more precisely what we are trying to accomplish and achieving more quantitative — rather than qualitative — results. Informed by the latest evolutions in the OKR approach, we are constantly coaching and improving our approach to OKRs.
It’s also important to understand that organizations shouldn’t expect to achieve 100% perfection of their OKR goals. Striving for 70% attainment is a more realistic and manageable outcome. The key is to set key results that are more ambitious than what would be typically possible.
For example, when the COVID pandemic hit and our organization shifted to remote work, we realized we couldn’t continue to use the two- to three-hour hardware provisioning and onboarding process for new employees. A new key result was set to get the process down to a five-minute onboarding process and, ultimately, our objective is a zero-touch, cloud-based approach. After evaluating current baselines and analyzing areas for improvement, the IT team deployed new technologies and procedures that reduced the hardware onboarding process down to 25 minutes from 60 minutes within the first quarter, and since then a further reduction to around 14 minutes. Each quarter we set an even more ambitious key result to help us reach our zero-touch objective.
The key results should be time-bound as well. It’s not enough to define what you want to accomplish, but how quickly you accomplish it. Timeframes should be ambitious but realistic and measurable, with the team making regularly scheduled assessments on the progress. At Inteleos, individual teams track their OKR progress as frequently as once a week and as an organization on a quarterly basis. Breaking the roadmap into quarterly segments enables the teams to quickly pivot and adjust strategies when needed.
Lastly, effective OKRs need to be data-driven. Applying data analytics gives everyone on the team a “single version of the truth” that is verifiable. But more importantly, everyone on the team has to play their part in contributing to the data-driven decision making. In your early attempts to measure key results, you may not have exact data. In these cases, it’s acceptable to guess a baseline and then reassess the following quarter. The key is to start measuring outcomes.
OKRs are an effective goal-setting and leadership tool for communicating what you want to accomplish and for measuring your progress towards those objectives. They have been proven by some of the world’s leading organizations in setting and achieving aggressive-yet-achievable business outcomes. Likewise, nonprofits that adopt OKR systems can do a better job at keeping their teams aligned, focused on what matters, making them more accountable, and ultimately achieving greater goals for the organization.
[i] Clear Measurement Counts, Kim Jonker and William F. Meehan III, Stanford Social Innovation Review, Mar. 20, 2014