OKR is an acronym, with OKR standing for Objectives and Key Results. The OKR framework or methodology has been used to set goals by companies of all sizes since its inception in the 1970s at Intel, and later at Google.
The meaning of OKRs is simple: You pair a single Objective that describes what you need to make progress on during the next planning cycle, which is usually a year or a quarter, with what are usually multiple measures of success, that are called Key Results. The Key Results need to be achieved in order to achieve the Objective.
The purpose of OKRs is more interesting. OKRs have the greatest impact on a company’s performance when they are used to set goals that align with a clearly articulated strategy. This detail often gets overlooked and when it does the impact of the goals that are set gets diluted massively.
In this article we explain the OKR process in full, how to plan OKRs in a way that follows OKR best practices, and then how to track OKRs in a way that keeps everyone focused on achieving the outcomes described in the OKR format.
Assuming you have a clearly articulated strategy using concepts like strategic narratives and KPI scorecards, which we show you how to use as part of our FAST Transformation Toolkit, you are in a great position to start OKR planning.
OKR planning should start by having teams debate this question:
To execute the strategy: “What do we need to commit to and make progress on next?”
What will you notice when you ask teams that question? You will notice that the OKR format that can confuse those new to this way of writing goals stops being a hurdle and the narrative of the OKR becomes way more important – you want to capture the narrative. The debate can then be codified using the OKR format of an Objective and Key Results.
These are the OKR process steps we recommend you use:
Learn How To Establish & Follow An OKR Process As Part Of The Workshop Toolkit For $800
In learning to write and manage OKRs, if you’re not careful you can find yourself down rabbit holes and get the impression that OKR are complicated when OKRs are actually a simple and structured way to write goals.
The best OKRs are created through a series of discussions. The debates are trying to uncover where the biggest improvements need to be made. The OKR then describes a future end-state that is meaningful, measurable and will change frequently enough to track. Nothing more and nothing less.
John Doerr, who introduced OKR to Google, uses a simple way to express how you should write OKR.
OBJECTIVE: I will: E.g. Grow our Product Range
KEY RESULT: As measured by: ____________________
Key Results that are trying to improve metrics make great Key Results. The debate then becomes about which and how many metrics to measure, and what the target values should be. We will discuss Key Result difficulty and OKR grading in a moment.
Give thought to how the target is achieved as well. If you are trying to increase a KPI to a target value, is success measured by:
There are two ways to build in ambition to Key Results. The first is to use labels like ‘Committed’ for targets you need to hit and Aspirational’ for targets that are a stretch and if you fall a little short, that’s still a win. The other is to set two targets a Committed and an Aspirational. The approaches would make Key results look like this:
There is over 35 years of research on goal setting that beyond telling us what we know, which is goal setting is an essential part of achievement, the research tells us why goal setting works and the conditions that make some goals way more effective that others.
If your Objective is to achieve specific milestones in a period then your might set-up a Key Result that looks like this in ZOKRI. This type of Key Result could easily be a To-do as it’s an Activity / Project.
Open New Office Location
5% Propose Region
10% Agree Region
15% Propose Location
20% Agree Location
50% Hire Region Head
70% Acquire Office
80% Hire Team
100% Up & Running
The definition of what success looks like for Milestone Key Results is a little more complicated as it might be Hard to achieve but unlike KPI based Key Results, 70% might not be a good result. So if you do want to use Milestones as a Key Result and not a To-do, where possible we would recommend setting the difficulty as Business-as-Usual, where 100% is the definition of success.
There’s no rule that says Key Results can not be binary – either done or not done. It is however hard to track progress between weeks. In early stage companies where you’re learning curve is steep and your KPIs maturity is low these are often used for Key Results that are targeting and discovery and learning.
Best-practice guidance is that if you’re doing an activity that involves: completing, defining, providing, helping, developing, launching, planning, creating, delivering, building, implementing, releasing, or launching, then this might be better denied as an Initiatives. Initiatives can have more flexible due dates that can be within a period or extend beyond the standard OKR planning periods. Which is common for activities.
There is no rule that says you can’t use a number of the Key Result types in your OKRs. For example:
Wow customers with a next generation pet insurance app.
This OKR might be used to unify a cross functional team involving Marketing, Product Management and Engineering.
You could also choose to turn the Learning and Project based key Results into Initiatives. Here’s a bit more about how that can work.
If you are using Key Results that involve:
Success probably means completing projects and tasks. A good question to ask yourself is:
Which metrics / KPIs would be impacted as a result of delivering this project or task?
If we ‘build’ the new feature we ‘think’ we will:
If we ‘launch’ a campaign we ‘think’ we will:
If we ‘complete’ the re-platforming of our tech we ‘think’ we will:
You might have noticed that OKR tracking is a key step in the OKR process. OKRs that are not worked towards from week-to-week are less likely to be achieved. OKR tracking is one of the ways we hold ourselves accountable to what we committed to try and achieve.
What complements OKR tracking is transparency. When our colleagues can also see how we are doing, we are more likely to stay engaged and focused on making progress. We are also more likely to get support if there are issues, and praise when there is good news.
OKR tracking is a feature of ZOKRI with integrations with spreadsheets, tools containing KPIs and project management tools. Progress and the narrative of the update, that might include issues, can then be shared automatically via the app, email, Slack or MS Teams.
When you have your weekly meetings you’re not updating each other you’re planning together. Solving issues and setting priorities for the week ahead.
OKR best-practices have slowly evolved over the decades and we are now in a position where they are well documented, easy to learn and build into your own OKR processes. We would like to share the top 5 OKR best practices that we think matter most if you’re considering adopting OKR methodology.
OKR Process Management & OKR Tracking & Reporting
In addition to being a home for your Vision, Mission, Winning Aspiration, Strategy and KPI Scorecards, ZOKRI has class-leading OKR features that ensure OKRs are used correctly and make a material impact..