Embracing OKRs: A New Dawn for Accounting Business

Do you ever feel that despite your best efforts, the business objectives of your accounting firm remain elusive? Are your traditional methodologies failing to meet the evolving demands of the industry? If so, it's time to consider OKR, or Objectives and Key Results, an innovative framework that could revolutionize your firm's trajectory.

This is not a new concept. Developed in the 1970s, and championed by tech giants like Google and LinkedIn, OKR is a proven business methodology. Unlike traditional to-do lists that merely represent tasks to be done, OKRs establish measurable objectives based on key results. OKR differs from the classic "to-do" list as it is not merely a list of actions or tasks to be completed. It is a series of goals to be achieved based on quantifiable indicators. We will further discuss this distinction.

OKR Vs. To-Do Methodologies

The To-Do methodology could be considered one of the paradigms of traditional methodologies. In this approach, the "what" is of great importance and often defined from a top-down perspective. Additionally, the timeframe for their accomplishment is usually long, often on an annual basis.

However, OKR addresses not only the "what" but also the "how." They are often established horizontally, involving the participation of the parties involved. Furthermore, the timeframe set for their completion is shorter, typically every 3 or 4 months.

Here you can see some accounting OKR examples and how to set them in your firm:

Regarding the worker, the To-Do objectives establish a more inert methodology where the worker is limited to completing tasks within a predetermined time. In contrast, with OKR, the worker can continuously self-assess the process. With measurable objectives, they can see in real-time what is working and what is not. They can adapt their time management and performance to ensure the successful achievement of OKR.

As we can see, OKR introduces a strong element of adaptability and competencies that are not strictly associated with the knowledge required for task execution. They also promote areas such as internal communication and a more horizontal and democratic leadership style. But what are their specific characteristics? Let's explore them next.

Key Characteristics of OKRs

The success of OKRs is rooted in their unique attributes:

• Objectives vs. Tasks: For instance, "Increase blog traffic by 20%" is an OKR, whereas "Publish 10 more posts on the blog" is a task.
• Measurable: OKRs must be quantifiable, whether via percentages or absolute numbers.
• Inclusive: The creation of OKRs should involve the team members responsible for achieving them.
• Simplicity: They must be clear, focused, and ambitious without becoming overly complex.
• Short Timeframes: OKRs are typically set for 3-4 months, after which they are evaluated and reset.
• Continuous Monitoring: Real-time assessment of strategy progress allows for quick adaptations as needed.

The Role of CFR

Yes, acronyms are part of the deal. But what does CFR mean? It refers to the three dimensions of team management that need to be enhanced to work with OKR. They are as follows:

• Conversations: As we mentioned earlier, internal communication is crucial. In fact, it plays a fundamental role from the moment OKR is set. OKR should be established through consensus and horizontal communication. Additionally, throughout the OKR achievement strategy, analyzing how things are being done is also a communicative process that should be carried out periodically.
• Feedback: closely related to the previous point. Analyzing and communicating how things are being done in a constructive manner helps empower the team (whose autonomy is key in OKR-based work). However, it is true that feedback is not always provided constructively. That's why working with OKR helps enhance this dimension. And if needed, you can always refer to our article on how to give feedback.
• Recognition: Since working with OKR depends heavily on the team's or employee's initiative and self-management, it is always important to recognize their good work. However, it is also crucial that, in case the objectives are not met, the blame is not placed on the worker or suggestions are not made that it is due to poor performance.

How to set and track OKR?

Now it's time to set the OKR. They can often be documented in a written format. The optimal way to express them clearly is as follows:

• Understand the company's vision and mission: This can be learned through the directions provided by the company's top management, but it can be enriched by the opinions of the employees working in the specific area where we want to implement OKR.
• Determine the objectives: Based on our understanding of what is required and the resources available to us. It is advisable to set the objectives as ambitious as possible. Typically, it is recommended to set between 3 and 5 objectives. And, as always, their establishment should be the result of dialogue with the team.
• Decide how to measure them: It is essential that the objectives are measurable. Each objective should have associated Key Results (KR). These Key Results should be quantifiable and measurable metrics.
• Set the timeframe: This refers to when we want those objectives to be accomplished. The OKR philosophy advocates for short time periods, especially quarterly. Although it is possible to opt for longer timeframes, such as annually.
• Track progress: This is where effective internal communication comes into play. Tracking progress can be done through regular meetings. The frequency of these meetings is flexible, but considering that the timeframe is usually narrow, it is advisable for them to occur with some frequency, for example, weekly. This way, a close monitoring of the strategy's evolution can be maintained, and changes can be introduced if necessary.

How to implement them in your company?

The OKR methodology undoubtedly requires alignment across all areas of the company. This often depends on a well-defined corporate culture that considers OKR as a work philosophy. If your company is transitioning to this type of work method, here are a few ways your HR can facilitate this transformative journey:

• Adopt a competency-based approach to talent management. This not only includes task execution skills but also soft skills like communication and goal-oriented work.
• During talent acquisition, including the assessment of soft skills. While these are not directly measurable, they can be gauged based on past experiences and individual temperament.

Embracing OKRs in your accounting firm is not just a shift in work methodology but a transformation in work culture. It empowers your team to actively contribute to the firm's goals, promotes communication, and enhances their adaptability and performance. So, let the journey of transformation toward a more productive future begin today!

Kevin Mitchell, CPA

Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance. Skilled in managing audits and leading teams to deliver exceptional services. Proud father of two.

🔗 Kevin Mitchell | LinkedIn