MBO, OKR, PPR: mix but not shake
Let's talk about goal setting techniques. This topic is relevant in almost all companies. How to set goals? How to make the goal achieved? How not to get a formal reply in the style of "I will work long and hard", but without some specifics? Such goals are good as "emotional charge", but completely useless in terms of achieving results. Immeasurable, unobvious, and therefore unattainable.
There are many methods of goal setting, we conducted several experiments at Raiffeisenbank, and I want to tell you about the pros and cons of these approaches. Somehow it happened that all the techniques easily turn into three-letter abbreviations, try not to get lost in them.
The classical technique invented by Peter Drucker in the middle of the twentieth century. In the canonical version is a list of SMART goals for the year, which the employee and the manager negotiate as a kind of social contract. According to the classics, in the middle of the year these goals are taken to be revised / clarified and at the end of the year evaluation of results .
MBO target example:
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Advantages of this approach:
Cons of this approach:
And how does this work in our bank?
For us, MBO is a big vector for a year without defining specific tasks. These are the key financial indicators that the whole bank wants to achieve, these are indicators of client satisfaction and employee involvement. And all year we try to find the best approach to achieving these indicators. And OKR helps us in this.
Recently, only lazy does not write about OKR. Probably, the truth has already been lost in history, but it is claimed that for the first time the OKR method was invented at Intel, and it gained its popularity thanks to Google, Oracle, Linkedin and Twitter.
As Russian Wikipedia tells us, as well as other sources , the essence of the approach is that the company / department / specific employee determines for himself several complex goals for a certain period of time (usually a quarter); For each of the goals, 3-5 measurable criteria are assigned, by which progress in achieving the goal will be monitored.
The method assumes that the goals are set as ambitious as possible, and in this regard, achieving 70% of goals indicates success. Situations in which the goal is achieved at 100%, rather speak of non-ambition.
OKR Example
Suppose you are the owner of a chain of stores, and set yourself a goal: "to increase the number of stores in the network by 20%."
Remark on the fields, who are interested: I recommend the site , where you can practice writing OKR and see a lot of examples from different industries.
Advantages of this approach:
Cons of this approach:
Learning to think in goals instead of tasks is a long time, and not everyone likes this story.
How does OKR work in our bank?
The practice itself is not accepted at the level of the entire organization, but there are individual teams that work quite well with OKR, and this is another plus of the system: you can start from yourself without trying to change everyone around at once.
I will describe the work of the technique with an example.
The format of the meeting:
Many companies in the world use a similar methodology, complementing the standard format of employee assessment conducted by a manager. Often PPR is confused with 360 surveys, but this comparison is not entirely true, because PPR is conducted in person and only with colleagues — that is, employees from your own team, without customers and subordinates.
Advantages of this approach:
Cons of this approach:
How does PPR work in our bank?
By analogy with OKR, the technique works in separate teams, I observed interesting situations when the same teams, changing the composition, left and returned to the practice of PPR.
The answer will be standard: what specifically suits your company and meets the conditions in which it exists. It seems to me that a bunch of MBO (big goals for the year) + OKR (short goals for the quarter) + PPR gives good support to the team and allows you to achieve results.
How do goal setting and evaluation processes work in your teams / companies? Share livehacks!
There are many methods of goal setting, we conducted several experiments at Raiffeisenbank, and I want to tell you about the pros and cons of these approaches. Somehow it happened that all the techniques easily turn into three-letter abbreviations, try not to get lost in them.
Management by Objectives ( MBO )
The classical technique invented by Peter Drucker in the middle of the twentieth century. In the canonical version is a list of SMART goals for the year, which the employee and the manager negotiate as a kind of social contract. According to the classics, in the middle of the year these goals are taken to be revised / clarified and at the end of the year evaluation of results .
MBO target example:
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- Attract 1.5 million customers in the premium segment and ensure that the ratio of expenses to revenues in the segment does not exceed 34%.
Advantages of this approach:
- The system is scalable, it works both in small companies and in very large corporations.
- It is possible to cascade goals from the CEO to the lower levels of the hierarchy.
- In a standardized system, it is easier for divisions to share cross-targets.
Cons of this approach:
- Setting goals for a year (even with a revision every six months) is monstrously not flexible in 2018. The market is changing with a crazy speed and some goals may lose relevance within a month. The system must be able to react to it very quickly.
- An MBO, as an approach, does not limit the number of goals, and often we end this exercise with a list of 10 goals and an average weight of 10% each. There is a confirmed hypothesis that an employee cannot focus on 10 goals at the same time, and in general, the presence of 10 “most important things” is very doubtful.
- Unfortunately, there are very few companies on the market that follow the original idea - to write SMART goals, and therefore we often get goals in the format “To ensure high quality business processes”, immeasurable amorphous nonsense, which perfectly closes someone's inefficiency.
And how does this work in our bank?
For us, MBO is a big vector for a year without defining specific tasks. These are the key financial indicators that the whole bank wants to achieve, these are indicators of client satisfaction and employee involvement. And all year we try to find the best approach to achieving these indicators. And OKR helps us in this.
Goals and Key Results ( OKR )
Recently, only lazy does not write about OKR. Probably, the truth has already been lost in history, but it is claimed that for the first time the OKR method was invented at Intel, and it gained its popularity thanks to Google, Oracle, Linkedin and Twitter.
As Russian Wikipedia tells us, as well as other sources , the essence of the approach is that the company / department / specific employee determines for himself several complex goals for a certain period of time (usually a quarter); For each of the goals, 3-5 measurable criteria are assigned, by which progress in achieving the goal will be monitored.
The method assumes that the goals are set as ambitious as possible, and in this regard, achieving 70% of goals indicates success. Situations in which the goal is achieved at 100%, rather speak of non-ambition.
OKR Example
Suppose you are the owner of a chain of stores, and set yourself a goal: "to increase the number of stores in the network by 20%."
- KR1: Select 40 candidates for the opening of the franchise until the end of May.
- KR2: Educate 30 of them by the end of June.
- KR3: Sign contracts from 25 to the end of September.
- KR4: Open 20 stores until December.
Remark on the fields, who are interested: I recommend the site , where you can practice writing OKR and see a lot of examples from different industries.
Advantages of this approach:
- Well-defined OKRs are becoming a fantastically useful goal-focusing tool. You do not have a "blurry blabla", smeared for the whole year. There is a very specific goal for a short time.
- OKR'ov does not happen much, so you just think about what is important to you at the moment, before you formulate goals. A number of studies say that more than 50% of top managers find it difficult to name their five main priorities. And OKR is one of the tools to solve this problem.
Cons of this approach:
- Learning to single out the most important thing is really hard at the level of a company - a team - an employee. And therefore, incidents like “my OKR list is something that I do every day” often happen, that is, they write a turnover in OKR.
- Instead of goals, tasks are often written in OKR, for example:
"Reduce the waiting time in the queue at the client in the branch to one minute" instead of "increase the client NPS (net promoter score, consumer loyalty index) when contacting the branch to 35%."
Learning to think in goals instead of tasks is a long time, and not everyone likes this story.
How does OKR work in our bank?
The practice itself is not accepted at the level of the entire organization, but there are individual teams that work quite well with OKR, and this is another plus of the system: you can start from yourself without trying to change everyone around at once.
Group performance evaluation ( PPR )
I will describe the work of the technique with an example.
The format of the meeting:
- At the meeting, choose a coordinator.
- The evaluated employee shares his vision of the previous period on the results of OKR.
- The coordinator takes turns inviting participants to ask clarifying questions , without ratings. The evaluated tries to answer briefly, but capaciously.
- The coordinator in turn invites the participants to express an opinion in free form (what is pleasant, what is not enough, what you need to pay attention to).
- The coordinator invites the assessed comment on the opinions heard.
Many companies in the world use a similar methodology, complementing the standard format of employee assessment conducted by a manager. Often PPR is confused with 360 surveys, but this comparison is not entirely true, because PPR is conducted in person and only with colleagues — that is, employees from your own team, without customers and subordinates.
Advantages of this approach:
- You, as an employee, hear all the opinions of the team about your results. This is very important in order to see the widest possible perspective. If you value feedback and consider it a “fuel” for development, this tool is for you.
- Regular PPR helps build trust in the team. We are no longer trying to find out how a colleague was evaluated by a manager, we ourselves take part in the assessment. It is often much more difficult to hide something from members of your own team than from a leader with a zazylenny gaze, so such situations will also quickly crawl out.
Cons of this approach:
- Initially, people are completely unprepared to openly comment on anything in relation to other employees. This is especially evident in teams with low confidence. You get PPR in the format of "no questions - no comments", and the whole idea turns into profanity.
- Such formats need to be able to coordinate, smooth out the emotional intensity and not allow the meeting to turn into a quarrel. Often in the heat of the old insults begin to be recalled and the conversation moves away from discussing the results in the discussion of personalities.
- They say that there is such a notion of “Russian & Polish Feedback”, the essence of which comes down to the fact that it is customary for us to praise only for Olympic gold, and to blame even for spilled tea. And often you need to strongly rock the team, so that it not only “gave constructive feedback”, but also praised its colleague, paying tribute to his merits.
How does PPR work in our bank?
By analogy with OKR, the technique works in separate teams, I observed interesting situations when the same teams, changing the composition, left and returned to the practice of PPR.
What to choose you?
The answer will be standard: what specifically suits your company and meets the conditions in which it exists. It seems to me that a bunch of MBO (big goals for the year) + OKR (short goals for the quarter) + PPR gives good support to the team and allows you to achieve results.
How do goal setting and evaluation processes work in your teams / companies? Share livehacks!
Source: https://habr.com/ru/post/352958/
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