Objectives and Key Results (OKR) — 101
The acronym OKR stands for Objectives and Key Results, a popular goal management framework that helps companies implement strategy.
How did Google grow from 40 to 88,000 employees and $100+ billion in global revenue?
WarningSure, their ubiquitous search engine, and cloud services played a huge role. But they also had a not-so-secret, secret weapon at their disposal: OKR.
More organizations are adopting Google’s Objectives and Key Results (OKR) methodology.
With this business practice, company leaders create objectives periodically, implement metrics to measure them, communicate along the way, and then discuss success and missed opportunities.
Implementing OKR takes a lot of commitment and hard work from both you and your team.
WarningWhile it may look like an easy path to success, it definitely is not that. It is a hard method to master.
But the benefits of the framework help improving focus, increasing transparency, and they lead to better alignment.
ImportantActually, OKR translate your company strategy into a digestible way that allows every team member to know they’re working on the right thing.
In this post, we’re going to run you through everything you need to know about OKR. From what they truly are, to tips for writing them, and how to implement them at your company. Sound good? Let’s get started!
OKR — The Basics
OKR helps entire companies communicate company strategy to employees in an actionable, measurable way.
It also helps companies to move from an output to an outcome-based approach to work.
An OKR consists of an Objective, which defines a goal to be achieved, and up to 5 Key Results, which measure progress towards the Objective.
Each OKR can also have Initiatives, which describe the work required to drive progress on the Key Results.
ImportantThe framework includes a number of rules which help employees prioritize, align, focus and measure the outcome of the work they do.
An OKR is an ambitious goal that’s supported by concrete actions that you need to take to hit.
Key Results should be numerically based and easy to grade with a number with the “Sweet spot” for OKRs success being somewhere around 60–70%.
Key Results are concrete, specific and measurable. They should describe how you will accomplish the objective and measure whether you are on track, behind, or at risk of accomplishing an objective.
Objectives should be ambitious, qualitative, time bound, and actionable.
ImportantKey Results show the most important things you need to do, not every small task you do each day. Key Results can be based on growth, performance, revenue, or engagement.
While you should set OKRs for quarterly or annually periods, it is important to go over your OKRs every week.
This way you can make sure you stay on track with your goals and provide and give feedback to team members as necessary.
OKR — The Setup
Before you start using OKRs it’s important to have a clear understanding of the challenge you want to solve.
For it be successful, the implementation and management of OKR should have an owner within the organization.
This person is usually called the “Ambassador” and the role is to ensure that everyone who will be using OKRs, is trained, engaged and has ongoing help and guidance.
The easiest way to set Key Results is to follow the SMART model.
ImportantSMART is a methodology that sets criteria to the tasks you set. The Key Results must be Specific, Measurable, Achievable, Relevant, and Time-bound.
Weekly Planning is a method of tracking the weekly activities of your company. It is an important, but often understated part of the OKR planning process.
WarningAlongside Objectives and Key Results you also need to keep your weekly plans or initiatives in mind, and think about how what you do each week contributes to your larger goals.
At the end of the quarter or year you should then look back at the accomplishment of your OKRs.
See what you did well and what you can improve on. From there you can start planning your next OKR.
Make OKR transparent throughout the company so that everyone sees the bigger picture and can hold each other accountable. Employees evaluate their key results (score them) at the end of each quarter.
Success in OKR adoption is tightly correlated with the values your company puts into practice.
WarningUnless your values espouse the underlying philosophy of OKR, chances of a successful adoption are slim.
Be it Google, LinkedIn or a Spotify. There is a very important reason why OKRs worked for these successful companies.
ImportantThese companies believed strongly in transparency, they were eager to disrupt their industries & the most important one — they had unwavering faith in their teams.
OKR — Best Practices
Objectives and Key Results would help your team move forward fast, but they need to know where are they going.
Set the vision and mission for the team to help them understand and visualize where the organization is moving.
So that they can align all their OKR in the same direction. It’s an important part to keep your team motivated and engaged with achieving great results.
If everything is a priority, then nothing is. OKRs are not about everything you need to do.
ImportantStart with 1-2 organizational Objectives. This will guide your team’s efforts and initiatives in the common direction. And it will be an excellent example for other groups to follow and implement the approach.
OKR can become flexible if necessary.
For example, a new competitor may arise or the company’s financial outlook may collapse or improve. While the OKR for the quarter stay the same, leaders can react by providing new goals for teams to do what’s best for the business.
Employees can be intimidated because they are afraid of repercussions for not accomplishing their objectives. Management can assuage their concerns by explaining that key results are independent of criteria for performance reviews or raises.
Never set any business goal and simply walk away.
WarningTeams that don’t have the top-management buy-in often fail with OKR. Top management should lead with an example by setting and achieving OKR and treating them seriously.
Depending on where do you stand as an organization, you might need to use moonshot or roofshot Objectives.
Moonshots are stretch goals that are beyond what the team thinks is possible whereas roofshot goals are the targets that the team aims to hit 100%.
Keep it simple! Focus on objectives that you know you can achieve in the given time frame.
ImportantMany employees think that they need to contribute to every department objective and end up spreading themselves too thin. Prioritize your objectives according to what the business needs the most.
OKR — Pros & Cons
OKR are a powerful tool. But they’re not a silver bullet for goal setting.
Every methodology has its upsides and downsides and OKRs are no different.
ImportantWhat makes OKR different is that they’re not simply just a way to set goals. OKR communicate strategy and priorities from the highest level right down to each individual team member.
They allow team leaders to push groups in the right direction while giving them constraints to make sure work gets done.
They’re fantastic tools not just for moving the needle, but for focus, prioritization, and clear communication.
On top of that, OKR are special in a number of other ways:
However, OKR, by the very way key results are defined, focus you on improving what you can explicitly measure.
However, there are often elements of the user experience, the brand, and the business that can’t be easily measured and therefore don’t end up being optimized.
The quarterly focus on defining and achieving outcome-oriented key results can also result in a team biasing towards a short-term mindset.
ImportantWhile this is beneficial from the perspective of helping to put wins on the board quickly, some of the most important initiatives are long-term in nature and require more than a quarter to accomplish.
While OKR are a powerful tool, they do have substantial downsides that need to be understood and addressed.
Bringing OKR to your company isn’t just a matter of copying the way a company like Google uses them.
WarningGoogle isn’t the average company, and they’ve spent almost 2 decades growing, scaling, and experimenting with how their internal goal-setting structure works.
That’s because at its core, OKR isn’t a methodology.
There’s no set path or steps you take for bringing it into your workplace. Instead, it’s a set of practices and ideals that you should understand and customize for your teams.
OKR — Case Studies
OKR are becoming the most prevalent way for setting and tracking goals because they have the flexibility to implement easily on any team size, either big or small teams.
Swipely, which is now Upserve, also implements OKR to handle their workforce effectively.
ImportantThe best thing they do is they make these OKR public so that every employee can view what his co-worker is doing. The OKR framework helped them a lot, and they hit a record sales of $1 billion.
Google is using OKR framework for a long time because they get remarkable results from it.
They set ambitious objectives and grade their key results on a scale with 0-1.0 by the end of each quarter. Google also doesn’t consider low grade OKR is a bad thing because they believe that these OKR are used as data for the OKR of next quarter.
Relying completely on OKR and believing that it will do all the magic is like living in the haven of fools. These companies not only just put all the efforts creating OKR but also work hard to get the results associated with their objectives.
LinkedIn also makes use of OKR. This framework helps them become a $20 billion company in a limited time.
ImportantThe CEO of LinkedIn, Jeff Weiner, believes that OKR is something that should be achieved in a limited time and motivates the entire team to set goals that are challenging. He prefers that the quantity of OKR should be between 3 to 5 in a quarter.
Huawei gave the old school strategy of KPIs and moved to OKR to take their business success to the next level.
Using OKR, they were able to set attainable goals that they achieved in a specific time. It helps them boosts the performance of their business by aligning all the employees so that they can work together on business goals.
Objectives and Key Results is a robust methodology that proved to be valuable over the last few decades.
Use the tips above to successfully implement OKR and align your team to achieve breakthrough results.
ImportantOKR can transform your whole organization, engage the team, and create long-term benefits for the business.
Setting your OKR is beneficial for each employee.
It fosters discipline and determination to achieve your objectives. It also gives you a clear guideline of what you need to focus your effort on for that time frame.
But OKR won’t make you successful just by their presence.
WarningYou have to convert the framework into your own process & monitor it along the way as you learn more about your team’s take on it.
Remember that adopting OKR is a marathon, not a sprint.
The process needs to be consistently monitored for efficiency & effectiveness. Start slowly and accumulate the momentum!
It doesn’t matter how quickly your company grows if it’s going in the wrong direction.
But if you do the work upfront to dial in your strategy and vision, OKR can be the superfuel you need to blow past your goals.
I hope this post empowers you to create a highly effective OKR program within your team, enabling your team to achieve new heights in terms of focus, alignment, accountability, and outcome-orientation. Don’t hesitate to share your thoughts in the comments section below!
Digital Dandy. Hacker From Heart. Workaholic. Coding Artist. Self-made.