Just when I think the world doesn’t need yet another introduction to OKRs, I talk to a company struggling to implement them.
As an OKR convert (someone who didn’t like them, and now enthusiastically loves them), I think this stems from over complicating it and getting in your own way. While it can take a while to “get” the power of OKRs, once the lightbulb goes off, they can transform how an organization aligns towards goals, focuses, and executes.
And it doesn’t have to be complicated. OKRs are actually rather simple.
In addition to creating alignment, OKRs can help you create an accountable, transparent culture. That’s one of the reasons I think they work so well in remote, flexible work environments.
If you want to understand what OKRs are, why you would use them, and how to adapt them to your organization to maximize results, here’s a bit of an “OKR 101” to get you started in the right direction.
What are OKRs
OKRs (Objectives & Key Results) are a tool for aligned goal setting and progress tracking across the organization. An objective is a goal, and the key results measure progress in the achievement of that goal.
OKRs comprise an objective—a clearly defined goal—and one or more key results—specific measures used to track the achievement of that goal.Wikipedia
From a Beginners Guide to the OKR Framework: “OKR stands for Objectives and Key Results, a framework to define objectives and track outcomes. They are meant to set and communicate strategy and goals for a specific period of time for an organization, teams, and team members. At the end of the time period, OKR provides us a mechanism to evaluate how well the objectives have been executed. This feedback helps us to plan better moving forward. The primary goal is to connect company, team, and personal objectives to measurable results. Key results are almost always defined with numbers to allow us to measure success. They don’t specify exactly how a team will achieve those numbers, just what the goal is.”
Essentially, Objectives tell us where we want to go and Key Results help us know if we are getting there. As the quote above clarifies, OKRs don’t specify how a team will achieve the key results, which is also important (and probably one of the only shortcomings of OKRs). I always recommend once OKRs are set that managers go through an exercise focusing on execution so that everyone understands what has to be done in order to achieve the OKRs. But that’s a topic for another blog post!
Where did OKRs come from?
As legend has it, OKRs originated during Andy Grove’s leadership reign at Intel. They spread across Silicon Valley companies due to their effectiveness. And then they grew in popularity when Google adopted them 1999 (at the urging of venture capitalist John Doerr).
OKRs…supported Google’s growth from 40 employees to more than 60,000 today. Besides Google, other companies use OKRs, including Spotify, Twitter, LinkedIn, and Airbnb. But the OKRs system is not only for digital companies. Walmart, Target, The Guardian, Dun and Bradstreet, and ING Bank are also using OKRs.”The Beginner’s Guide to OKR
Why would your company adopt OKRs?
You might be adopting OKRs because your board or a strategic advisor told you to. You might be adopting them because you read a book, or because you know of another startup who implemented them. You may be feeling that everyone in your company is scattershot working on different things and you heard OKRs can help.
There are lots of reasons companies come to OKRs. I came to them when I joined a company that was in the early stages of implementing them and it was going “ok” but not great. It was complicated, taking lots of time, people didn’t understand what they were or why the company was doing them. And really, the company didn’t feel like OKRs were helping them achieve any goals. A pretty common scenario. As the leader of people & culture, I needed to quickly get OKRs on track and change our culture so we could continue the high growth trajectory we were on in a more coordinated, methodical, aligned manner.
Here’s what I learned and why I came to love OKRs.
- OKRs provide total transparency into company, department, team, and individual goals and progress. Everyone can see any OKRs (unless you opt to leave them private which you shouldn’t). OKRs help everyone know what others are expected to achieve and how they are measured. This helps ensure everyone is heading in the right direction. And more than anything, it creates a culture of transparency. Being able to see company, department, team, and individual (including the CEO’s) OKRs eliminate confusion, duplicate or conflicting work, and help create employee engagement. It’s simple but powerful.
- Because OKRs can (and should) be aligned to other OKRs (for example, a department OKR can align to a company OKR) you can be confident that the initiatives and goals people are focused on are pointing in the same direction (towards the company objectives). It’s important that everyone is rowing the boat together towards your big goals and OKRs help you do that.
- OKRs help everyone focus on the most important initiatives and in that way help staff to be accountable to themselves, their peers, and to leadership. Because OKRs are visible, everyone knows when goals are achieved, and when they aren’t. Hopefully, you often hit your goals. But sometimes you won’t. OKR transparency creates a culture of honesty and makes it safe to be open about how we are doing. People can be honest in their assessment of why an objective was missed and how to do better the next time around.
- OKRs can facilitate agility. When you have a quarterly OKR cadence, you can review the past quarter to assess how you did and make adjustments for the coming quarter to set your course for success. This agility helps you stay relevant and adaptable to the needs of the business.
OKR Tips and Tricks
OKR implementation is where companies fall down. So, in no particular order, here’s my OKR advice.
- I love a quarterly OKR cadence, but there is a benefit to also considering one main thematic (or campaign) objective for 6-12 months as well.
- Consider using one company OKR that spans 6-12 months that is more like an internal rallying cry or campaign that will inspire everyone. “Operation Crush” is a great example of how this was done under Grove’s leadership at Intel. There is so much power in this type of company objective! Make it memorable and meaningful to your company.
- A good rule of thumb is 1-3 quarterly objectives for a company, and 2-3 quarterly objectives for departments, teams, and individuals. Each objective should have 2-3 key results. It’s OK to repeat important evergreen objectives, don’t think you must recreate the wheel every quarter.
- Objectives should be short and easy to understand. One of the most frequent mistakes I see is overly wordy objectives. Just write an objective the way you would say it.
- Key results must be measurable. A key result is not a task or an initiative. A common OKR mistake is creating a set of key results that are really a to-do list. In an OKR system, the “How” part of getting there is not contained in the OKR. Sometimes a key result has to be a task but strive to make them something measurable.
- Alignment, alignment, alignment. Once you determine company OKRs, a department leader sets OKRs for their department that are aligned to the company OKRs. A team within the department does the same. And a manager & team member do the same. This creates cascading alignment where everyone is working on things that ultimately help to achieve the company’s OKRs.
- Use a system. Some companies use spreadsheets or slide decks. But there are fantastic online tools purpose-built for OKR management. Some even have best practices built in to give you a head start.
- Make OKRs totally transparent. All OKRs should be visible across the organization. Of course, occasionally a leadership team, or a person, may need a private OKR when extreme confidentiality is needed. But one of the benefits of OKRs is the visibility and alignment they create, so I avoid private OKRS as much as possible.
- Use joint OKRs to help further alignment. Some OKRs are by their very nature interdisciplinary. I love OKRS that are owned by more than one department, or more than one person as they create opportunities for true collaboration.
- Consider how OKRs may conflict and cause competing priorities. This is where OKR trouble happens. If you have OKRs that create competition for resources or are unintentionally at cross-purposes with others it can create incredible organizational strife. Think through the implications of OKRs, what the dependencies will be, what the available resources are and how they are all woven together.
- Don’t overcomplicate it. Write simple OKRs. Just a few each quarter. Make sure you can measure the outcomes for the key results in a reliable way. Think about what you need to achieve and how you will know if you have done it. That’s it.
Writing OKR examples is harder than you would think. I’ve rarely found good examples online, and even the ones below leave something to be desired. But, I know examples also really can help you consider how an OKR is constructed, so hopefully this is helpful for you!
Example Company OKR
- Objective: Increase user engagement
- Key result: Reduce monthly NET B2C churn to 5.6% (from 7%)
- Key result: 90% Q2 B2B Gross Retention
- Key result: Increase NPS score to 73 (from 70)
Example Department OKR (for customer success)
- Objective: Increase business customer adoption of our product
- Key result: Achieve 90% gross retention
- Key result: Achieve 84% of seats used per account
- Key result: Increase usage of feature X by 15% per account (from 7.46 to 8.57)
Note this department objective to “Increase business customer adoption of our product” can align to the company OKR to “Increase user engagement”.
Example Personal OKR (for a customer success rep)
- Objective: Increase team adoption of my customers
- Key result: Achieve 80% of seats filled on my accounts
- Key result: Increase usage of feature X in my accounts by 15% (from 7.93 to 9.11)
Note this personal objective can align to the department OKR which aligns to the company objective.
I hope you come to love OKRs as much as I do! If you feel inspired to do so, check out these additional articles and books on OKRs.
- “OKRs comprise an objective—a clearly defined goal—and one or more key results—specific measures used to track the achievement of that goal. The goal of OKR is to define how to achieve objectives through concrete, specific and measurable actions. Key results can be measured on a 0-100% scale or any numerical unit (ex: dollar amount, %, items, etc.). Objectives should also be supported by initiatives, which are the plans and activities that help to achieve the objective and move forward the key results.” From Wikipedia: https://en.wikipedia.org/wiki/OKR
- “Within a small company, it is fairly easy for different teams to stay coordinated around the common goals that everyone has to work towards to make the company successful. However, as the company grows in size, it becomes a really hard exercise to coordinate all teams to work towards common goals on a regular basis. If not managed properly, it becomes an exercise of “herding cats”, spending a lot of time and energy to just keep different teams from duplicating efforts, or to prevent them from working on conflicting objectives that can risk confusing the customers and lead them to abandon the product or service provided by the company.” A Beginner’s Guide to the OKR Framework: https://www.linkedin.com/pulse/beginners-guide-okr-framework-ragavendran-madhusudanan/
- “The philosophy behind OKR is that if the company is always reaching 100% of the goals, they are too easy. Instead, OKR targets bold, ambitious goals. Besides aspirational objectives, OKR believes in enabling the team to set challenging goals. Goals that make the team rethink the way they work to reach peak performance.” The Beginner’s Guide to OKRs: https://felipecastro.com/en/okr/what-is-okr/
- “If you want your startup to be transparent, accountable, have the right priorities, and be clear on the strategy at all times, you should be using OKRs.” Why Your Startup Should Use OKRs: https://7geese.com/why-your-startup-should-use-okrs/
- Start Less, Finish More: Building Strategic Agility with Objectives and Key Results
- OKRs, From Mission to Metrics: How Objectives and Key Results can help your organization achieve great things
- Radical Focus: Achieving Your Most Important Goals with Objectives and Key Results
- Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs