Things have been looking pretty rosy for the life sciences sector of late. Investment in biotech doubled between 2020 and 2021 alone, with investors pouring $34 billion of capital into the rapidly growing sector.
Healthy investment often means healthier hiring budgets. According to data from the US Bureau of Labor Statistics, headcount increased by 5.3% year-on-year between 2021 and 2022. Meanwhile across the pond, a report by the UK government found that employment in the sector grew 13% between 2011 and 2020.
But big growth often comes with new challenges. As life sciences organizations navigate challenges at a talent, process, and sector-wide level, they’re going to need strategy on their side to meet ambitious goals.
SMART goals have proven to be one of the most popular frameworks for setting performance objectives. However, in an innovation-driven, highly collaborative industry like life sciences, OKRs can be a much more effective framework that connect individual and business goals, and prepare organizations for the next phase of growth.
Challenges in the Life Sciences Industry
Times may be good for the life sciences industry, but the sector is still facing some common growing pains due to its rapid growth.
Industry talent shortages mean that companies in this sector must do more with fewer people to maintain business velocity. Meanwhile, the COVID-19 pandemic dramatically accelerated changes across the whole sector, creating an unprecedented impetus for global collaboration, an increased dependence on digital technologies, and a ground-up overhaul of traditional methods of R&D.
To keep up with the pace of change and take advantage of the investment opportunities available, life sciences companies will need to:
1. Improve their knowledge management systems.
Research by Deloitte found that organizational silos in the life sciences sector prevented efficient knowledge sharing 16% more often than in other industries. While this is always a problem, the new emphasis on collaboration and partnership will make this an even more serious issue.
2. Increase organizational agility.
A report by McKinsey concluded that, while the life sciences industry has traditionally relied on technical problem-solving (using expertise and relying on best practice, and tried-and-tested solutions), recent game-changing developments (such as using combinatorial technologies to create novel therapies) have created a complex and ambiguous landscape. Navigating these developments successfully means companies must move to a more adaptive and agile mindset.
3. Increase operational efficiency.
The need for greater agility, coupled with a talent shortage, means that life sciences companies need to find ways to increase productivity without adding to their workforce. For instance, a 2021 McKinsey case study on Johnson & Johnson outlines how the organization pivoted towards a new operating model that prioritizes cross-functional teamwork, measuring progress through metrics, and employee autonomy.
Why Life Sciences Should Consider OKRs
Tackling these challenges won’t be easy, but the right goal-setting framework could help organizations manage their outcome more effectively. While many companies still rely on SMART goals for performance management, the OKR (objective and key results) method may be more effective for life sciences businesses. Unlike SMART goals, OKRs are a more holistic approach because they address both desired outcomes, and the steps you will take to reach those outcomes.
This makes them ideally suited for companies which need a comprehensive goal-setting strategy to adapt rapidly to market changes.
OKRs vs. SMART Goals
SMART (Specific, Measurable, Assignable, Realistic and Time-related) goals are a way for employees to establish consistent, objective and quantifiable targets.
They’re an effective way of clearly articulating an end goal, and are usually focused on a single metric of success. But while the outcome is clear, SMART goals don’t always help teams define how to get there, leaving room for ambiguity on the steps needed to achieve a goal.
With OKRs, on the other hand, you have to specify not only what you want to achieve, but how you’re going to achieve it.
| |
|
|
|---|---|---|
|
Purpose |
Define quantifiable and specific goals | Define goals, milestones, and outcomes needed to reach those goals |
| Best for | Individuals and small teams | Companies and teams |
| How long to they take? | Fairly quick — they’re designed to be flexible and reviewed regularly | Longer — they need to be precise and specific, so they may take a while to get right |
| Relationships to other goals | Cascade down from company-level to department and/or team-level | Can exist in isolation from other goals |
When you write your OKRs, you have to decide on an objective, and up to five outcomes (or key results) that you will need to achieve to reach that objective. The objective is a “strategic theme” — a qualitative goal that is easy to understand, and gives a clear sense of the business impact you’re trying to create.
OKRs aren’t just a format for writing out individual goals — they’re a framework for setting goals at an organizational level. As a result, they tie individual performance into organizational success, making them a great way to motivate, engage and unite your workforce.
How OKRs Empower Life Sciences Companies
In times of change and turbulence, goal-setting initiatives can help to establish clarity, improve productivity, and create a sense of cohesion. And with a laser focus on method and results, OKRs can help life sciences organizations tackle some of their most pressing challenges:
1. Optimized knowledge sharing.
OKRs are a great way to reduce the knowledge silos, because they get everyone on the same page.Each team sets OKRs that will help to deliver shared company objectives, meaning everyone understands how the work they are doing contributes to the overall company mission — both at a team level, and an individual one.
2. Improved adaptability.
Objectives are reviewed quarterly, ensuring the entire organization can respond quickly to changing priorities.
3. Easier teamwork.
OKRs enable cross-functional teamwork, meaning teams can collaborate on complex projects, both internally and across organizational borders.
4. Improved productivity and efficiency.
By drawing clear lines between top-level goals and day-to-day tasks, OKRs make it far easier to prioritize projects and for teams to maximize their productivity. And, by creating a sense of clarity, OKRs give employees and teams the autonomy to make their own decisions and the freedom to look for innovative solutions.
How to Set Effective OKRs in Life Sciences Organizations (With Examples)
Setting high-quality OKRs should not be an excessively complicated process. After all, you likely already know your top-level goals — you just may not have thought closely about how those goals relate to the objectives of the teams and individuals in the organization. The OKR framework is specifically designed to be simple, meaningful and transparent.
1. Set company-level OKRs that keep everyone aligned.
Good OKRs should be ambitious and meaningful goals that will help to move your company forward. Choose a maximum of five, each with no more than five key results.
When setting your objectives, ask yourself:
- If we achieve this objective, will it have a major impact on this organization and/or our stakeholders?
- Will it be valuable?
- Will it drive change and improvement?
You then need to set the key results that accompany each objective. These are the outcomes or milestones you will need to deliver in order to achieve your ambitious goal. They should be quantifiable and time-limited.
One of the biggest errors that companies make is to set too many goals, according to Stanford University lecturer Christina Wodtke. In a report by Harvard Business Review, Wodtke explained: “The problem is that many employees simply don’t have the time — or “working memory” — to juggle a long list of strategic priorities, which can lead to missed objectives and employee frustration.”
Goals are most effective when they’re set regularly, so set objectives on a quarterly basis, rather than annually, for best results. And aim high — Google, one of the early adopters of the OKR method, states that 60 to 70% is a “good” grade for an OKR. According to their reWork resource: “If someone consistently fully attains their objectives, their OKRs aren’t ambitious enough, and they need to think bigger. Low grades should be viewed as data to help refine the next OKRs.”
2. Align team OKRs to company objectives.
Once you’ve set your company-level OKRs, it’s time to translate these goals into meaningful goals at a team level and create alignment across the whole organization.
You’ll need to decide if every team should have their own OKRs, or if you only need OKRs at the department or business unit level.
Either way, setting the next level of OKRs should be a process of top-down and bottom-up discussion, allowing the team members, managers, and senior leaders to work together to agree on where time and energy is best spent. Each team should have three to five OKRs, which directly relate to at least one of the company-level OKRs. While it’s important to set relevant goals, setting OKRs shouldn’t be a long process. Instead, they’re intended to be an agile and evolving series of goals that change regularly as work progresses and the market changes.
At a team level, goals are most effective when they focus on fostering mutual ownership and accountability. They should also be specific and clear, so that each team member knows exactly what their contribution will be.
3. Cascade OKRs to create meaningful individual goals.
Individual employees might not feel like they have much buy-in when it comes to setting company and team goals. Sometimes this can make it hard to see where their contributions impact the wider organization.
While OKRs are mainly used at a team and company level, you can also use them to create a cascading goal framework that aligns team OKRs with individual performance objectives or employee KPIs. Using cascading goals gives employees a greater sense of ownership, which feeds directly into their motivation.
You may find it helpful to use an OKR software to bring it all together, communicate your OKRs to the organization, and track progress.
Examples of Life Sciences OKRs
Objective: Dramatically accelerate how fast we can get pharmaceutical X to market
Key results:
- Halve our time to collect data from clinical trials by 50%
- Automate data analysis process Y by the end of Q1
- Move 100% of our data results into internal sharing platform by end of Q1
Objective: Maximize use of OR time
Key results:
- Reduce operations with late start times to 2.5%
- Fully automate surgery scheduling processes by the end of the quarter
- Decrease patient no-shows from 5% to 3%
Objective: Release vaccine for disease X before end of the year
Key results:
- Secure approval for vaccine from Approval Body Y before end of Q1
- Identify 3 distribution partners in Market Z
- Meet 100% of manufacturing requirements
—
This is an exciting time for life sciences companies, and OKRs can help your business take full advantage of the opportunities ahead. For a step-by-step guide for how to implement OKRs in your life sciences business, check out our free workbook: How to Set Meaningful and Effective OKRs. If you think OKR software could help you get started, schedule a free demo of Lattice.
