Benchmarking & Performance Standards
How do you move from business vision to strategy to performance? You need concrete goals and objectives that link the strategy to execution. Goal setting with measures and monitoring bridge the gap between high-level organizational objectives and individual team members.
OKR – Objectives and Key Results
Remember, the Vision is what you want to accomplish. Mission is a general statement of how you will achieve your vision. Strategies are a series of ways of using the mission to achieve the vision. Goals are statements of what needs to be accomplished to implement the strategy.
A company’s goals and objectives are not the same. The goal includes a broad primary outcome. A business objective, on the other hand, is a measurable step people take to achieve that goal. Goals are general while objectives are specific.
An effective goal-setting system starts with disciplined thinking at the top, with leaders who invest the time and energy to choose what counts.
– John Doerr, Measure What Matters: How Google, Bono and the Gates Foundation Rock the World with OKRs
A goal setting framework, with a defined objective that maps back to an organizational goal. With specific metrics that measure progress along the way. OKR’s are designed using the SMART (Specific, Measurable, Achievable, Realistic and Timely) methodology.
Benefits of OKRs
- Translate strategy into daily operations
- Simple to understand
- Embraces ambitious goals
- Accepts failure as part of the process
Measuring what we actually care about — rather than what is easily measured – is fiendishly difficult yet critical to get right. OKRs allow you to link your strategy to tangible and measurable actions for your teams.
KPIs – Key Performance Indicators
KPIs are quantifiable measurements that help businesses assess how effectively they are achieving operational and strategic goals. KPIs are specific to departments, companies, and industries. Each measures a specific element such as sales, the number of hours employees are working, or speed to market.
MBO – Management by Objectives
First popularized by Peter Drucker in his 1954 book The Practice of Management, MBO’s focus on defining what you want to achieve and are typically jointly established between management and their teams.
OKRs blend major objectives based on the organization’s goals with defined results based on what the organization wants to achieve. KPIs are a complement to OKRs, and provide a hard measure of performance and health, such monthly sales, PE ratio. KPIs correspond to the detailed work within an organization that facilitates the delivery of projects or objectives. OKRs are the major elements of the corporate strategy that need to be accomplished to deliver the mission and vision consistent with the values