OKR 101

Introduction

Objective and Key Results (OKR) is a popular leadership process for setting, communicating and tracking goals and results in organisations. The concept was invented at the Intel Corporation and spread to other Silicon Valley companies, including Google, Zynga, Spotify, Airbnb, Twitter and LinkedIn and many more.

OKRs are meant to set strategy and goals over a specified amount of time for an organisation and teams. Their purpose is to ensure that company, teams and individual contributors are going in the same direction, with clear priorities and in a constant pace. OKRs are generally implemented in an special OKR software.

OKRs are built around two different questions:

• Objective: Where do I want to go?
• Key Result: How will I get there?

The Objective is the goal of the company, team or individual and the Key Results are the measurable steps needed to accomplish the objective. This framework is repeated from the top of the organization down to the individual, which creates a cascading interplay of goals that keeps a group of people aligned.

How OKRs will help your company

Ben Lamorte, coach at okrs.com, tells this story “My mentor and advisor, Jeff Walker, the guy who introduced me to OKRs once asked me, “When you go on a hike, do you have a destination?” I paused since I was not sure where Jeff was going with this so Jeff picked up, “When you hike with your family in the mountains, it’s fine if you like to just walk around and see where you go, but when you’re here at work, you need to be crystal clear about the destination, otherwise, you’re wasting your time, my time, and the time of everyone who works with you.”

OKRs help companies in six core ways:

• Keep your company aligned: OKRs connect individual and team performance back to the shared company objectives, so management knows everyone is moving in the same direction.
• Focus on what matters: The OKR model recommends 3-5 objectives for each level of an organization, which forces companies and employees to prioritize the objectives that will have the greatest impact on the company.
• Increase transparency: OKRs enable an organization to have a transparent culture, as everyone knows how each team and individual is planning to make an impact.
• Empower your people: Increased visibility gives everyone the context they need to make the best decision and shows the employee the impact of their work.
• Measuring stick for progress: OKRs illustrate how far along individuals, teams and the overall company are in accomplishing the shared company mission.
• Accomplish the unexpected: OKRs are meant to be stretched - just beyond the threshold of what seems possible - so companies can achieve remarkable results.

How to write OKRs

When drafting objectives and Key Results, keep in mind the following best practices:

For Objectives:

• Each level of an organization (company, team, and individual) should have 3-5 objectives per organization level
• Objectives have a finite endpoint (expand to China) rather than an ongoing task (make progress on international expansion)
• Objectives push beyond what seems possible and should feel a tad uncomfortable. For context, Google considers success achieving 70% of an objective, and 100% completion is considered remarkable performance.

For Key Results:

• ~3 key results per objective
• Key Results are measurable ( “contact 10 journalists” rather than “develop relationships with journalists”)
• Key Results are the steps to completing an objective, if you hit your key results than you accomplish your objective.
• Key results describe outcomes rather than activities (“publish conversion funnel report” instead of “analyze conversion funnel performance”)

Bring OKRs to your organization

An important part about OKRs is their transparency. When bringing OKRs to an organization, it can be helpful to be clear about what they are, why they can be helpful, and how they will be used. Research shows that performance is higher when people are committed to their goals, so it can be important to get everyone onboard.

Tips for introducing OKRs:

• What are OKRs? Cover the basics of what OKRs are and how they work.
• Why use OKRs? Review of how the organization currently approaches setting goals, and any limits or issues with that approach.
• How OKRs work? Explain the timeline, what is expected of each person, what the major milestones are, and how people will be accountable.
• Still skeptical about OKRs? Leave time for questions, with a particular emphasis on drawing out any skepticism.

Some key tactics in order to implement OKR system in your organization:

• Start with the long term: Make annual goals and break them up into quarterly objectives. This creates long-term and quarterly clarity and focus, everyone knows how it all fits together.
• Top-down approach: Set top company objectives first. This allows you to set the top priorities to which everyone can contribute and align.
• Alignment: Once the organization knows what it’s focused on and how it will measure success, it can become easier for individuals to connect their projects with the organizational objectives.
• Discipline and prioritization: It can be hard for any one team in a company to say no to a good idea, a worthwhile project, or a needed improvement. Once everyone agrees what the most important objectives are, it can be easier to say no to the less important ideas. Saying no isn’t a political or emotional debate, it becomes a rational response to a commitment that the entire organization has already made.
• Communication: OKRs should be public within an organization so that every employee knows the organizational objectives and metrics for success.

How to get started with OKRs

If this is your first time setting up a goal system, the following process should start roughly six weeks before the beginning of a new year or quarter.

Best OKRs practices

Adopting OKR is a journey, not an event. As in company cultural transformation, change does not happen overnight. But, with the help of specialised OKR software, it is possible to modify the organisation’s dynamics in a few weeks, aligning and engaging the team.

In addition, there is not a single way to use OKRs, each company or team can adapt and tweak them, creating different versions of them as needed. However there are some best practices:

• OKR takes an agile approach, typically with short quarterly goal cycles.
• Objectives should be simple, short and easy to memorise. And don’t make them boring!
• Focus on 1-3 objectives at a time, with 3-5 key results for each objective.
• At least 50% of the OKRs should be set bottom-up in agreement with the managers.
• Are public by default to the company, so everyone can access for increased transparency.
• OKRs progress should be updated frequently - we recommend weekly.

Common mistakes and how to avoid them

There are the patterns that lead to challenges in using OKRs:

• You set too many OKRs per quarter: Try setting only one. Google needs multiple OKRs for the company because they are running a search engine and a supporting a browser and trying to crack social and making self-driving cars.
• You set OKRs for a week or a month: I’m not totally convinced that a start-up should use OKRs before achieving product/market fit, unless that objective is “find product/market fit.” If you can’t keep on track longer than a week, you probably aren’t ready for OKRs. If you do have product/market fit, then commit to the full three months. After all, what truly bold thing can you do in less than that? If it can be done in a week, it’s probably just a task.
• You set a metric-driven Objective: The OKR unifies multidisciplinary teams, and that means the dreamy designers, the idealist engineers and the caring customer service. The Objective needs to be inspirational, a call-to-action that gets folks to leap out of bed, ready for a new day and a new challenge.
• Your Key Results are tasks, not results: A Key Result is NOT something you do, it IS something that happened because of what you did. Save the tasks for the weekly priority list.
• You talk tough on Friday: We’re tough on ourselves and each other all week. Let’s crack a beer and toast what we did accomplish. Especially if we aren’t going to hit all our Key Results, let’s be proud of what setting big goals did let us accomplish.
• You Make OKRs part of the performance review: Everyone from Google to Zynga to Swipely warns against this. If you want people to aim high, you can’t punish them for not hitting outrageous goals. Instead, employees can use their weekly status mails and OKRs to write up a self-review of what they did accomplish.