OKR Payoffs: The acronym FACTS

OKR payoffs can be expressed using the acronym FACTS and are shown in the following illustration. In this article, we have also put together an introduction to OKRs.

The five OKR payoffs

Focus

An important guideline when implementing OKRs is to limit the number of objectives to 3-4 per person and the number of key results to 2-5 per objective. This guideline was created to put an exceptional focus on what you are trying to achieve. This also forces you to prioritize the key results and select those that are most important at the time.

Alignment

For this OKR payoff, too, objectives and key results are intentionally public and accessible to all employees of the company. This transparency makes it easier for employees to align themselves with the relevant goals of others who influence them or are influenced by them. When you are able to express and visualize alignments, every employee can understand and recognize the impact they have beyond themselves, their teams or departments.

Commitment

While OKRs are set at each level of the organization through discussions and conversations, each employee sets their own OKRs. They are assigned OKRs by their managers, but by and large everyone creates their own. The IKEA effect shows that employees are much more committed to achieving their goals if they have set them themselves. The third OKR payoff is therefore increased commitment.

Tracking

Tracking as the fourth payoff of OKRs is one of the main differences between traditional performance appraisals and OKRs. Your employees report back every week with their individual progress. You can use any type of assessment methodology. A widely used method is Progress, Plan and Problems (PPP) and is supported by our software. It is very effective when employees document progress for all their OKRs and then complete their PPP assessment.

Stretching

Assuming the following characteristics are equal, which of the two is better?

The answer is obvious.

However, traditional management systems encourage #1, while OKR encourages #2. If you are achieving 100% of your OKRs, it most likely means you are not setting aggressive enough goals. The ideal degree of target achievement is 65%.