What is digital transformation? How to define OKRs?

Remember, simply applying digital technologies to existing business processes IS NOT Digital Transformation.

The digital transformation strategy must be designed to change and optimize existing and new business processes, leveraging the advantages of digital technologies to maximize business profitability.

A goal is a dream with a deadline. Goal setting (OKRs) is the primary step to achieving an effective objective. It’s when you put your life into real action mode. Without this step, the complementary steps of goal achievement cannot be accomplished.

Objectives and Key Results, what most people call “OKRs,” is more than an acronym used in the tech community. OKRs are a framework that helps companies set ambitious goals (objectives) and track their performance against them (key results). Former Intel CEO Andy Grove created the idea of OKRs and brought it to Intel. In his book, High Output Management, Grove wrote that there are two essential questions companies must answer to use a framework like OKRs:

1. Where do I want to go? – This gives you the objective.

2. How will I pace myself to see if I’m getting there? – This gives you the key results.

Figure 1 Digital Transformation Roadmap, Amendola.L, 2018

Successful digital transformation requires strong digital leadership skills not only at the team level but also at the senior management level. These skills can only be achieved when digital leaders meet the required expectations to execute the digital vision through OKRs. Looking back at certain global and international companies, we find that digital leadership skills are almost nonexistent.

How can we achieve this?

The main purpose of Objectives and Key Results (OKRs) is to connect company, team, and personal objectives with measurable results, making people move together in the right direction. It’s what I call in my book on operational excellence the connection between the castle and the shop floor.

A major part of OKRs is ensuring that each individual knows what is expected of them at work. OKRs are kept public for everyone, so teams move in one direction and know what others are focusing on.

OKRs consist of a list of objectives. Under each objective, typically 3-4 measurable key results are listed. Each key result has a progress indicator or a score from 0 to 100% or 0 to 1.0 showing its achievement.

Company-Level OKRs

OKR Example #1: PMM Innovation Group Organization

• • Objective: Significantly increase business value through digital transformation

• • Key Result: Increase annual revenue by 40%

• • Key Result: Maintain at least an 80% repeat purchase rate

• • Key Result: Maintain a net positive employee self-improvement and growth rate

OKR Example #2: Project Delivery

• • Objective: Deliver measurable and significant impact across all our work

• • Key Result: Lead the client in defining measurable success factors for each asset management project.

• • Key Result: Deliver at least 80% of all client-defined success factors for completed projects

• • Key Result: Actively update 100% of all resource plans weekly

• • Key Result: Complete 100% of timesheets before the weekly deadline

OKR Example #3: Human Resources

• • Objective: Support an environment where every employee has the opportunity to realize their potential

• • Key Result: Establish objectives and key results aligned with department goals for 100% of active employees

• • Key Result: Check in with 100% of active employees each month on their performance against OKR objectives

• • Key Result: Document career goals and development plan for 100% of active employees, including a prioritized list of skills, capabilities, and experiences the employee aspires to develop

• • Key Result: Develop a recruitment pipeline for the five most in-demand roles

OKR Example #4: Finance

• • Objective: Cost-effectively enable revenue growth and continuous improvement across all aspects of the business

• • Key Result: 100% of active projects in the order backlog assigned to revenue forecast and measured for comparison

• • Key Result: 100% of qualified deals in CRM assigned to revenue forecast and measured for comparison

• • Key Result: Maintain revenue, cost, and cash flow forecast with 100% coverage of backlog and pipeline

• • Key Result: Maintain data governance and reporting for 100% of backlog, pipeline, and planned expenses

With the era of digital transformation, digitalization, emerging digital business models, and automation are enabled by evolved modern technology including Artificial Intelligence (AI), data science and analytics, robotic automation, Blockchain, and the ability of machinery to absorb and process big data in real time.