In this article, we discuss how OKRs, or Objectives and Key Results, a popular goal management strategy, can be used to fulfill your sustainability program. You’ll learn what makes sustainability OKRs unique from other corporate OKRs and how to implement them effectively.
What are OKRs?
OKRs, Objectives and Key Results, are an organizational management tool used to measure progress towards set goals. OKRs allow companies to set ambitious goals at the organization, department and employee level, creating a network of goals that collectively support the larger mission. It is a simple but effective framework for defining, measuring and communicating progress on specific initiatives.
An OKR consists of an objective which is a brief statement of the overall goal you want to achieve, followed by 3-5 key results that measure your success in achieving the objective. The key results should be measurable outcomes so that everyone involved can track their progress over time. By setting clear objectives and key results, teams have greater clarity on what they are working towards and can focus their efforts more efficiently. Additionally, it provides managers with a framework for holding team members accountable for achieving their goals while also providing them with feedback on the quality of work they are producing. The key to performance management is having a reliable and clearly defined plan to guide your team.
Sustainability OKRs
Now more than ever, organizations are facing more global regulations and public pressure to hold accountability for their social and environmental impacts. Incorporating sustainable practices into their operations is not simply the “right thing to do”, it’s becoming mandatory across all industries.
Using Sustainability OKRs is one way to ensure your company is making real progress in its sustainability performance because this strategy is based on measurability. There is often a lot of ambiguity and confusion around business sustainability because it involves many different facets – waste generation, energy and water consumption, product end-of-life, employee welfare, community impacts, and the list goes on.
Sustainability OKRs provide an effective framework for defining exactly which aspect of business sustainability you want to tackle. Your sustainability OKRs can range from local environmental impacts or larger social issues: For example, a few sustainability OKRs may look like this:
- O1: Lower post-consumer waste
- KR1: Reduce single-use plastic packaging by 25%
- KR2: Launch “buy-back” program in January 2024
- KR3: Incorporate 70% recycled content into product packaging
- O2: Reduce operational emissions
- KR1: Upgrade 75% of all facility lighting to LEDs
- KR2: Roll out EV charging stations in June 2023
- KR3: Offer free public transit passes to all employees by April 2023
- O3: Become a stronger supporter of community resilience
- KR1: Donate 1% of annual sales to a local charity
- KR2: Sponsor 1 community fundraiser per quarter
- KR3: Organize public workshops at community center from May to August 2023
By setting specific targets related to sustainability, organizations can create clear pathways for achieving them. This helps ensure that the organization is taking the necessary steps towards meeting its environmental and social goals, such as reducing its carbon footprint or giving back to the community.
Benefits of Sustainability OKRs
The benefits of using sustainability OKRs range from company savings to employee morale. Let’s take a look at some the biggest benefits you’ll see when using sustainability OKRs:
- Makes progress measurable and generates data for future comparison
- Simplifies goal management by defining specific targets and timeframes
- Increases productivity and goal attainment
- Aligns individual goals with the larger company mission
- Creates a way for companies and employees to hold each other accountable
- Encourages collaboration between departments, team members, and stakeholders
- Reveals how company operations impact people and planet
- Provides a reliable framework designed for continuous improvement
Where to Begin with Defining Sustainability OKRs
Defining sustainability OKRs is a company-wide effort. If you already have a green mission statement, this can help you define your objectives. Set the company-level OKRs first and then work with each department to tie their departmental OKRs to the larger company goals. Have the head of each department collaborate with their employees to set strong individual goals that support both individual employee growth and the larger company mission. Remember: It’s important to establish both short-term goals as well as long-term goals for all OKRs.
Challenges and Solutions to Using OKRs
As straightforward as OKRs are designed to be, there are still several challenges that come with implementing them.
One of the biggest challenges is staying aware of your OKRs and avoiding letting them fade into the background as business ensues. Keep the momentum going by scheduling monthly and quarterly meetings to review the company, departmental and employee OKRs. Given that OKRs are measurable, it should be easier to evaluate progress and identify any hurdles in the way.
Another obstacle is getting employees on board with the system. Employees need to understand why OKRs are important, how they should use them, and how they will benefit from using them. Employees should also have adequate guidance in navigating their objectives and resources for when they need additional help. Further, OKRs should be realistic and achievable for all employees, and should be relevant to their job and daily tasks. OKRs are not only designed to support the company mission, but should also motivate employees and encourage them to grow professionally.
A Real Life Example of Sustainability OKRs in Action
San Francisco-based sustainable footwear and clothing company, Allbirds, sold over a million shoes in just two years since its launch in 2016. While Allbirds initially set out to create footwear from ethically-sourced, natural materials, the company quickly realized the potential for their products to be 100% carbon neutral. Allbirds used OKRs (which they instead call KIWIS, or “keep improving with intent”) to track the carbon emissions across all points of their value chain including transporting materials to manufacturing finished products.
Once Allbirds had a clear measurement of its carbon footprint, down to the gram of carbon dioxide equivalent per shoe, the company could accurately offset these emissions and achieve 100% carbon neutrality.
Since purchasing carbon offsets is a quick and easy remedy for business impacts against the planet, Allbirds uses its OKR framework to collect benchmark data and plan for further emissions reductions per product, thus allowing them to offset less and less. Allbirds’ OKRs also include conducting a Life Cycle Assessment (LCA) for their products and reducing the environmental impact of their products by 10% annually.
To simplify the process of connecting company-level objectives to all departments and team members, Allbirds uses the acronym RIPEN which stands for, Retail, International, Product, Experience, and Non-Negotiables, each of which include their own OKRs. Allbirds leadership team works with each department to link those departmental OKRs to the company objectives.
Allbirds co-founder, Joey Zwillinger, praises the OKR framework stating, “What OKRs, and KIWIs in our parlance, have allowed us to do, is to maintain unbelievable focus, and that unbelievable focus has driven execution to a higher degree, and that has driven a clarity of message to the consumer.”
Conclusion: Maximizing Impact with Sustainability OKRs
The implementation of Sustainability OKRs can be a powerful tool for businesses that are looking to identify, measure, and reach sustainability performance goals with confidence. OKRs act as a reliable guide for navigating goals and set the foundation for effective team building and collaboration. When used correctly, sustainability OKRs can maximize the impact of your efforts by focusing each team and employee to strive after the same larger mission.
