Introduction To Objectives and Key Results – OKR

What Makes OKRs Different From Other Goal Setting Frameworks?

You may have heard of the FAST goals. Well we’ve added an extra ‘A’ to make ‘FASTA’. We think FASTA really summarises what types of goals OKR are.

• Frequently discussed
• Ambitious
• Specific
• Transparent
• Aligned

 

Delivering Strategy & Aligning Work With OKR

You will find that OKRs are designed to deliver your strategy and complement Agile processes such as Scrum and Kanban.

They will also create clarity for execution teams by connecting their work to your vision and strategy. But what about the activities not related to strategy and change?

We have mentioned Strategy a lot, but not everything going on in your company is related to strategy. In fact, everyday jobs, processes and business-as-usual tasks are often the bulk of an employees’ day.

A key point to make here is that this work does not need to be codified as an OKR. In fact, one of the biggest reasons for a failed OKR roll-out is employees turning their to-do lists into OKRs.

We would encourage you to exclusively reserve OKRs for strategic and transformational goals. If you don’t you will dilute focus, effort and your OKRs potential impact.

Also, each quarter, we would like you to consider, agree and commit to an amount of time to dedicate to your OKR outcomes.

Depending on the Quarter, your team and your role – this will range between ZERO and ONE HUNDRED PERCENT of your time.

This means that when OKRs are implemented across your company, some employees will have lower levels of OKR involvement than others, and that is OK as their contribution will be recognised in lots of other ways.

 

 

Tracking OKRs Successfully

How are you going to track OKRs and the impact of business as usual work? You’re going to use KPIs as well.

OKRs and KPIs have different jobs to do. They are complementary and actually need each other. In fact they are frequently part of the same conversations, especially in OKR meetings.

For example, it’s common to have OKRs and KPIs as agenda items in monthly or quarterly business review meetings. And to help those conversations, KPIs can have their own targets and thresholds to maintain independently of your OKRs.

So, if you really want OKRs to succeed you might want to invest in defining and tracking KPIs as well.

Both OKRs and KPIs can be tracked and managed in ZOKRI.

 

What Is An OKR?

We have mentioned the term OKR a lot but still haven’t looked at what it is. So let’s take a look now.

OKRs describe important, highly desirable and measurable outcomes that you want to achieve in a period. That period is usually a quarter.

Another way to think about OKRs is to imagine presenting to your company at the end of each quarter.

Your presentation outlines what you targeted for improvement during the quarter in order to support the company strategy, what you did, where you got to by the end of the quarter and what you learned.

And in the same presentation you’d also run through the KPIs that you maintained and improved.

So OKRs are the outcomes you want to achieve in a planning period that is usually a quarter.

The work you will be doing to achieve them is often labeled outputs. These outputs are often called Initiatives, Tasks, To-Dos, Epics or Sprints.

 

Setting OKRs

To set OKRs you need to agree and focus on what change would have the greatest impact on Company OKRs during the next Quarter.

There might be KPIs that really need to be improved, or sub-optimal systems or processes that need optimising, or even strategic big projects that must be delivered.

The debate and ‘check-sum’ is this:

Of all of the things you could commit to, if this OKR made good levels of progress, would it help to achieve the company OKRs, and in doing so have made a material difference to the business.

 

What Makes A Good Objective?

There are four important things to remember when crafting the Objective of your OKR. Objectives must be:

• Easy to understand
• Reasonably short
• Describe what needs to be achieved
• Be exciting and motivating

If helpful, you can even add why this Objective is being done.

A couple of great Objective examples include:

“Customers love our product and we’re ready for take-off”

“Our product is chosen over competitor products every time”.

Getting consensus on which Objectives are most important right now is step 1 of an OKR.

Read more about writing OKRs see more OKR Examples.

 

How To Write Key Results

So what makes a really good Key Result? This is where things get interesting and sometimes challenging.

The DNA of good Key Results:

• Have an outcome that will drive the right behaviours
• Are quantitative, which means they have a number
• The number changes frequently – ideally weekly as this makes frequent check-ins relevant and useful

A top tip is to structure Key Results using words like ‘from’ and ‘to’ help to provide context for what needs to be achieved.

You will need agreement that a change in that measurement would make a big difference to the Objectives achievement.

The difficulty of Key Results is also important. Ideally they should be graded using labels like ‘stretch’ or ‘aspirational’. We will tell you more about why this matters in a moment.

Finally, like with Objectives, they need to be owned by an Individual, this is often the Objective owner – but this doesn’t always have to be the case.

So to summarise, quantitative measurements are the best kind of Key Results. But they are not the only kind of Key Results that can work.

For example, milestones can work, especially if the milestones are for the delivery of one of those really big strategic projects.

Key Results that are made up of projects, campaigns, sprints and epics – or even a series of tasks from your to-do list are not ideal. They are the work you’re doing, and should be clearly separated from your Key Results.

Here’s are a few examples of Key Results:

• Grow MRR from 1.5 to 3.5, or, Increase Weekly Active Users from 4K to 8K this Quarter.
• Increase Leads from companies over 2K employees from 50 to 500 this Quarter
• Reduce the time it takes to onboard a customer from 5 days to 1 day this Quarter.

Notice each example has a ‘from’ and a ‘to’ with a timeframe.

 

Why Stretch Key Results Matter

Back to the idea of setting stretch or aspirational targets. Knowing when and how far to stretch is a key part of planning OKRs. Often, we deliberately make OKRs difficult, but we do this for really good reasons.

Only when we stretch ourselves do we innovate more, learn more, collaborate more and focus more.

Now that we’ve said that. Imagine not setting hard goals!

The counter argument is that not achieving 100% might be demotivating.

Well with OKRs, what needs to be clear is that 100% progress is not the only definition of success.

In fact, 100% is often not even the desired level of success as it could mean you were not ambitious enough.

Where can you decide whether the OKR was an achievement or not?

The answer is the OKR Retrospective – a key stage at the end of an OKR cycle.

Say you were approaching the end of the quarter having achieved progress of 57% on an aspirational OKR.

It’s in the retrospective that you can reflect on everything from the amount of time you had to work on the OKR, to the resources that were available, and challenges faced.

You can also capture and share what you learned and might do differently going forward.

So 57% might actually be graded as a great achievement.

Because stages like Retrospectives are so important, software like ZOKRI is needed to systemise the capture and sharing of these narratives and learnings.

 

Start Planning OKRs

Are you ready to start planning and discussing OKRs?

If you are, it’s useful to be able to answer these questions.

• Describe this OKR and why you chose it?
• How does this OKR align and support the company strategy and/or Company OKRs?
• Does this OKR align with other departmental / team OKRs and have you discussed your OKRs with them?
• Do you need the support of another department or team to make progress in this OKR?
• How many hours do you need to commit to this OKR each week to make progress?
• What business-as-usual work will need to be delegated or not done as a result of this OKR?

Again, this is where the important role of OKR software comes in. ZOKRI helps you systematically align the priorities that have a huge impact on performance.

 

Less Is More With OKR

When you’ve agreed your OKRs you are going to have OKRs that are owned by both departmental teams and cross-functional project teams. All should align with Company OKRs.

The expression ‘less is more’ couldn’t be more relevant when talking about OKRs. In fact, less is WAY more.

Remember that every Objective and Key Result you create adds additional complexity, reduces clarity, and dilutes focus. OKRs are an exercise in goal minimalism and impact maximization.

A good challenge is to try and limit yourself to just one OKR at every level.

Is that number of OKRs enough?

If you were to get to the end of the quarter and each of those OKRs was achieved, how significant would that be?

Hopefully the answer is that it would be game-changing.

 

Planning OKRs Quarter-to-Quarter

Earlier we mentioned that OKRs compliment Agile processes such as Scrum and Kanban. OKRs can be planned and managed in a similar way too – just at a quarter at a time.

This means that OKRs can sometimes continue between quarters and some will get completed early.

Thinking and planning like this means that if OKRs are completed early, another one can start from a backlog you might have.

Quite often when OKRs roll-over between quarters, you have an opportunity to re-calibrate or even redefine Key Results.

Having an OKR cycle that allows you to discuss and choose which goals are going to be committed to each quarter, based on where you are at that moment in time, means that planning future quarters is usually not a good use of time. There is just too much uncertainty.

OKRs allow you to be agile and decide as you go on how value can best be delivered.

Like with agile work, you are trying to not overload the system with too much active work.

 

OKR & Complimentary KPI Examples

Now let’s look at some OKR examples and the KPIs that compliment them and might form part of the same meetings.

Here’s an Objective to :

Expand internationally to accelerate growth

The outcome based Key Results:

‘Sign-up our first 100 customers in a [new market]’
‘Publish 5 case-studies from customers in the [new market]’.

Complementary KPIs for an OKR like this would be profit, costs, MRR, churn, LTV, CAC, EBITDA and CSAT or NPS.

Next let’s look at an OKRs aligned with that strategic one.

Scale marketing and sales

It has two Key Results.

‘To book 500 sales meetings’
‘Generate 10 new customers’.

Complementary KPIs for this would include funnel metrics such as the Leads to SQL conversion percentage and the SQL to Customer conversion percentage.

 

Finding Your OKR Rhythm

Right, we’ve covered the basics of setting good OKRs. What you now need to know is that the key to achieving and delivering the company strategy is to find and keep to your goal execution rhythm.

You need to ensure the right conversations are happening at the right time. In teams you need to plan and keep to a meeting schedule that is locked into diaries.

Away from team meetings, asynchronous updates to OKRs can be done through check-ins with notifications and alerts keeping everyone informed.

The right conversations at the right time deliver results. OKRs are the framework for these conversations and these will all live and be managed with ease in ZOKRI.

 

An OKR Roll-out

Hopefully you can now see the power of OKRs and what they could do for you.

So how do you start to roll-out and implement OKRs in your company?

Obviously it depends on where you’re starting from. But assuming you’re at the beginning of your journey, here are four milestones to aim for.

Firstly, agree a C-level pilot. Then take the time to learn OKRs the right way. Set the KPIs or health metrics for the company and set the first company OKRs. From here, start having weekly short OKR meetings.

Once the C-level pilot has developed rhythm and is working, start thinking about a Team, or cross-functional team pilot.

Coach these teams on what has been learned from the C-level pilot. Set KPIs, develop OKRs and again hold regular weekly OKR meetings.

Next, select and train OKR leads and ambassadors – the guardians of OKRs in the company.

Now you can roll-out to middle management and below.

 

Training New & Existing Employees In OKR

As part of this roll-out you are going to need to train and coach both new and existing employees on how you use OKRs.

The goal is to ensure everyone understands and uses OKRs in a consistent way. This is not a challenge as long as you have a plan to do it.

Having a bank of written and video assets to use when training your staff is helpful for when you run OKR workshops. ZOKRI has these ready for you to use in addition to the OKR software.

 

OKR Fit & Being Fit To Use OKR

By now you’re already familiar with what an OKR consists of, what it entails and the potential it has for you, your teams and company. Now we need a reality check.

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Below is a video that covers everything found in this guide. Watch this video to learn and implement OKRs in your organisation now.