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Your guide to unlocking your company’s full potential with OKRs
Achieving goals and driving results
Welcome to our introduction to OKRs (Objectives and Key Results). By reading this guide you will discover the power of this goal setting methodology and how OKRs can transform your team’s performance, drive results, and help achieve the company goals that will win the battlegrounds outlined in your company strategy.
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OKR guide contents
We have written this guide as an introduction to OKRs for leaders, managers and employees new to OKR, or for those that are struggling to implement OKRs or what we hear described as “making OKRs stick”.
What are OKRs?
OKR is a popular goal setting format that stands for Objective and Key Results. The OKR acronym uses an Objective (the O) to describe that needs to be achieved, and a selection of Key Results (the KRs) to describe the measurable outcomes that when achieved would result in the objectives success.
Introduction to the OKR (Objectives & Key Results) framework
The OKR framework can be used to set goals that are likely to move-the-needle. By using OKRs you will be measuring what matters, and be able to frequently track the progress of individual OKRs and OKRs grouped by strategy, department, team or individual. From this you will discover the areas of the business that needs support.
Using the OKR framework to set goals will help to improve clarity of purpose, alignment of efforts, and efficiency of resources within an organization.
Some key benefits of using an OKR system include:
- Create goals that uncover Objectives and Key Results that will make a material difference to performance
- Track Key Results that measure what matters and measure progress
- Create greater transparency and accountability throughout the company and across teams
- Create better alignment of individual, team, and company objectives
- Use of resources more efficiently and improve KPIs like Revenue Per Employee
- Help employees share their know-how, and see how they make a difference
This guide to OKRs will take you through the process of implementing OKR’s into your organization, from getting started all the way up to using metrics to measure performance.
Why use OKRs?
There are many benefits to using the OKR methodology, which is why they are growing in popularity among organizations. Some of the top reasons to use OKRs include:
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1. Increased impact, clarity and focus
By using a top-down and bottom-up approach to setting goals you will not only set better and more ambitious goals, goal clarity, engagement and focus will ensure there is a better goals will be achieved.
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2. Improved communication
OKRs help improve communication between different levels of an organization. They also help create alignment between departments and individuals.
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3. Greater accountability
With OKRs in place, individuals and teams are held accountable for their results. This leads to greater motivation and improved performance.
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4. Enhanced tracking and measurement
Using OKRs makes it easy to track progress and identify areas of improvement. This helps organizations learn and grow over time.
Expert Tip: OKRs are not just for tech companies
“A lot of people think OKRs are specific to Silicon Valley but that is not the case – we work with many different companies of all shapes and sizes. Public sector, start ups, tech businesses, huge enterprises – all can benefit from using OKRs.”
Paul Niven
Paul Niven
The OKR Format - Objectives, Key Results & Initiatives
This simple graphic explains how to write an Objective. You only write one Objective per OKR. You should write a supporting narrative with your Objective explaining why it’s important to make progress on this OKR and why it was chosen.
With each Objective you want to write 1 – 4 Key Results, 2 – 3 is most common. These Key Results are the measurable outcomes you’d like to achieve by the end of a period like a quarter. They are often KPIs and ideally are leading indicator bias as lagging indicators move too slowly. You can also blend leading and lagging, trying to act on the leading indicators to drive the lagging one.
- Key Results are often KPIs (but not always) and ideally are leading indicator bias as lagging indicators move too slowly. You can also blend leading and lagging, trying to act on the leading indicators to drive the lagging one.
The work or what are often called Initiatives are how progress on the Key Results is going to be made. Initiatives take many forms and can be as large as a project, a sprint or epic, a campaign, a launch, or even a collection of tasks. It’s common to brainstorm a list of Initiative ideas as part of the OKR writing process.
Expert Tip: OKRs are how you can execute and deliver your strategy
What makes a great Objective and Key Result?
Writing Objectives
As far as an Objective is concerned, it must pass a number of tests:
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Make A Difference
The essence of all good goals is that when you achieve them, you should have made a real difference. So when writing you Objectives make sure they are addressing a significant opportunity or solving an issues.
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Easy To Understand
OKRs are designed to be shared with other teams that might not know some of your team jargon. Make sure you've written your Objectives in a way that any team could read and understand what you're trying to do. To help you achieve this, write a supporting statement covering why you chose this Objective and why it is important that you make progress on it now.
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Supportive
OKRs are usually supporting the execution of a strategy and the achievement of other OKRs.
Writing Key Results
Most Key Results use two different measurement formats:
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Metrics Based Key Results
The best Key Results usually have metrics or (Key Performance Indicator) KPIs in and show a starting value and a target value. The target value is often a stretch value and to help others understand that the target is a stretch, labels like 'stretch' or aspirational can be used. When the metric you are targeting is new and not being tracked yet you can mark the Key Result as "Getting a Baseline for 'METRIC NAME'.
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Progress Based Key Results
Sometimes the Key Result you want to measure is tracking the progress of a really important strategic project or initiative. Progress might be measured as a percentage or use percentages and milestones. If you can pair these with metric based Key Results, all the better, as you will want to know where the project or initiative was effective.
- When using metric based Key Results try and act on all leading measures / KPI or pair a lagging measures / KPI with leading ones that progress the lagging measure / KPI. If you only use lagging KPIs they move too slowly to track from week to week and by the time you find out there are issues, it is too late to make changes or pivot.
Expert Tip: The fewer OKRs you have the better
“OKRs do NOT have to cover everything you do, they cover the single most important thing you must exponentially improve this quarter.”
Christina Wodtke
Christina Wodtke
Measuring progress of OKRs
The success of your Objective depends on two factors:
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Key Result Progress
The level of progress of your chosen Key Results determines the success of you Objective. You can either use the average progress or use weightings if specific Key Results are much more important than others.
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Key Result Difficulty
It would unfair to expect 100% progress on an OKR that was deliberately set at a stretch / aspirational level of difficulty. Knowing how hard Key Results are and therefore the Objective ensures that we define success correctly. For example, progress of 70% or more might be great if the OKR was aspirational.
There are lots of different labels for Objective and Key Result difficulty. Aspirational is often used to describe an OKR that’s a stretch but not a moonshot and progress should reach 70% (note that Google use 60%). The expectation of Committed OKRs is that progress should reach 100%. A moonshot is often used to spark innovation and progress of 30% or more could still be game- changing.
It is also useful to be able to track progress of OKRs in OKR groupings and branches.
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Branch & Group Progress
OKRs can support other OKRs. OKRs can also exist in departments with sub-teams, be grouped around strategic themes. or clustered together using tags. It's therefore easy to measure the progress of OKR in strategic themes, departments, teams, and branches in OKR software like ZOKRI.
Expert Tip: Don’t be afraid to set ambitious goals
Using KPI and OKRs to keep score
OKRs are not going to replace your need for KPIs. In fact, there is a significant synergy between KPIs and OKRs that you will want to unlock. A good way to think about and approach unlocking this synergy is to track a small group of KPIs (Key Performance Indicators) in each team. This acts as the scoreboard for teams performance.
OKRs can then be set to answer the question: “What do we need to make progress on most this [year/quarter]?” Sometimes the answer lies amongst those KPIs, sometimes it doesn’t.
If progress is made on OKRs, your KPIs scoreboard should also make progress and look healthier. This is why ZOKRI allows you to have company, department, team and individual KPI and OKR scoreboards running alongside each other.
Transparency, accountability and peer pressure
OKR (Objectives and Key Results) are nearly always made transparent. This means that you can see the company OKRs as well as departmental and team OKRs. Personal OKRs are going to have a more limited audience i.e. managers and HR.
Most people find this transparency refreshing. Especially if they are used to working in silos and never really knowing what is going and and how teams are performing.
Objectives, Key Result and KPI ownership also increases accountability. When your name is next to an OKR, Initiative or KPI and they are transparent, you’re more likely focus on them.
There is also peer pressure at play. When Objectives, Key Results and KPIs are part of checkins and meetings you do not want to turn up to team meetings having not worked the areas you own and have committed to making progress on.
Marketing KPIs
Marketing KPI Scoreboard
- MRR
- SQLs
- MQLs
- SQL: MQL
- CPA
- LTV
- Web Trial Sign-up Conversion
- Organic Visitors
- # Pages Ranking In Top 4
- # Pages Published
- # New Link From PR
- Organic Attributed Sign-ups
- Paid Media Visitors
- Paid Attributed Sign-ups
- Paid CPA
- Social Visitors
- Social Attributed Sign-ups
- Referred Visitors
- Direct Visitors
- Email Visitors
An example of two Marketing OKRs that are aligned
Department: Marketing
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Objective (Aligned with Growth Strategic Pillar)
Scale the number of leads sales are receiving from Marketing
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Key Results
Increase MQL from 1500 to 3000 - Aspirational
Keep the MQL : SQL conversion rate over 20% - Committed
Why now?
We’ve more reps and their diaries need more sales appointments. We also have revenue targets we need to support.
Supporting OKR
Team: Content Marketing
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Objective
Scale ‘best on the web’ cornerstone content to create traffic that converts to leads
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Key Results
Create 10 new cornerstone pages with supporting content that can rank for high search volume terms - Committed
Generate over 10,000 visits for Organic Search to the new pages in one quarter - Aspirational
Create 500 new leads from these new marketing funnels in one quarter - Aspirational
Why now?
We’ve already proven that this is the best way of scaling leads fast. We’ve a great team and we can make this type of content easily.
Expert Tip: Use OKRs and KPIs together
“OKRs are a viable best-practice approach to performance management that requires the use of KPIs (key performance indicators). KPIs can exist without OKRs, but OKRs generally cannot exist without KPIs. KPIs and OKR scan be combined to take an integrated driver-based planning approach to performance management.”
Ben Lamorte
Ben Lamorte
OKRs are way more than a goal format
OKRs when used well are the focal point of some the best discussions and thinking you will do. Considering what your Objectives are in addition to what your Key Results should be will be the catalyst for better team work, innovation and learning.
You should therefore consider OKR to be a framework that leaders use to optimize business operations for the benefit of all stakeholder – shareholders, customers and employees.
You will also find that OKR implementations rely heavily on specific cultural values, behaviours and rituals. This is where OKR and Culture Management comes in and why ZOKRI offers both together. OKRs if embraced fully can improve your culture and make it more aligned to what would be considered a high performing culture.
Expert Tip: Create common goals and shared values
“Every enterprise requires commitment to common goals and shared values. Without such commitment there is no enterprise; there is only a mob. The enterprise must have simple, clear, and unifying objectives.”
Peter Drucker
Peter Drucker
OKR allow you to set measurable goals that are SMART and FAST
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Frequency
OKRs work when they are an agenda item that is frequently discussed. This is where a commitment to the OKR cycle comes in. The most common frequency is weekly.
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Ambition
OKR stretch us enough to make us think and act differently, without paralysing us. OKRs have built in systems for making ambition normal and even fun.
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Specificness
When you focus on too much nothing matters most, and you achieve less. OKR force objective and outcomes to be highly specific, like SMART goals.
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Transparency
When OKRs are transparent for all to see they help us belong to a whole, not in a silo. We feel part of a wider team, and we have context for the work we and others are doing.
Expert Tip: OKRs allow you to home in on what matters most to improve performance
“High-performance organizations home in on work that’s important and are equally clear on what doesn’t matter.”
John Doerr
John Doerr
OKR benefits summarized
The benefits of OKR and an OKR tool are numerous. The benefits to a leader of a company are obviously different to a more junior member of a team. The themes that OKR benefits fall under have a pattern though.
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Strategy Delivery
For leaders, OKR provides a framework to execute and operationalize strategic thinking. Bridging the strategy - execution gap. This has the benefit of increasing KPIs like Revenue.
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Aligned Impact
For managers and their reports, OKR provides a an opportunity to stop and consider where the opportunities and issues are, and agree where progress needs to made now.
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Clarity and Focus
The result of leaders communicating strategy and teams considering what their goals should be that support strategy is alignment, prioritization and focus.
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Controlled Autonomy
When you have succeed with OKR, goals are clear, updates are happening weekly. Progress is visible and you can see where your wins are and where help is needed.
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Less Stress
When teams and employees know what their priorities are they are able to de-prioritise what matters less. This makes work more enjoyable and increases their impact.
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Greater Accountability
When you have helped create OKRs you are more engaged and energised, you're also happy to be accountable for the outcome and share the performance burden.
Expert Tip: Hold each other accountable to making progress on measurable goals
“One: set inspiring and measurable goals. Two: make sure you and your team are always making progress towards that desired end state. No matter how many other things are on your plate. And three: set a cadence that makes sure the group both remembers what they are trying to accomplish and holds each other accountable.”
Christina Wodtke
Christina Wodtke
The 10 golden rules of creating OKRs
Follow these OKR best practices to unlock the value of OKRs
1. Inspire, align and unite
Set company goals that inspire and align everyone in your strategic planning process. Not inspiring people is a wasted opportunity to unite everyone and drive the right behaviours and actions. Are you a right fit for OKR?
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Building a visionary company requires one percent vision and 99 percent alignment.
Jim Collins & Jerry Porras
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People are not lazy. They simply have impotent goals—that is, goals that do not inspire them
Tony Robbins
2. Focus on what matters most
Set team goals that focus on your strategic pillars that are wildly important and need progress to be made now, because BAU / everyday goals won’t move the needle, but will dilute focus.
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There is nothing so useless as doing efficiently that which should not be done at all.
Peter Drucker
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My success, part of it certainly, is that I have focused in on a few things.
Bill Gates
3. Collaborate Brilliantly
Write OKRs based on your org. structure and in cross-functional teams, and make them transparent, because siloed teams and invisible goals are obviously a terrible idea.
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Collaboration is a key part of the success of any organization, executed through a clearly defined vision and mission and based on transparency and constant communication.
Dinesh Paliwal
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It is the long history of humankind (and animal kind, too) that those who learned to collaborate and improvise most effectively have prevailed.
Charles Darwin
4. Listen, trust and motivate
Unlock bottom-up thinking, because leaders often don’t know best! Research OKR examples and start thinking about your own.
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Most people do not listen with the intent to understand; they listen with the intent to reply.
Stephen R. Covey
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When you talk, you are only repeating what you already know. But if you listen, you may learn something new.
Dalai Lama
5. Focus on measurements that matter
Make a measurable impact by acting on measurements that matter, which are often lead and not lagging indicators – the big lagging like Revenue and NPS make average goals and much better KPIs.
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Setting goals is the first step in turning the invisible into the visible.
Tony Robbins
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If you can't measure it you can't improve it.
Peter Drucker
6. Share what success looks like
Separate desirable and measurable outcomes, from the work that achieves them – your to-do list is valuable, but not a goal. Know the types of OKR you’re using.
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The more specific and measurable your goal, the more quickly you will be able to identify, locate, create, and implement the use of the necessary resources for its achievement.
Charles J. Givens
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It's very easy to confuse confident motion with being productive - and they're not the same thing. Productive to me means measurable outcomes that apply to my most important to-dos that positively affect my life. That's it.
Tim Ferriss
7. Frequently update and discuss
Commit to discussing goal and execution progress frequently, ideally weekly. Set-and-forget goals lead to mediocre performance. The best OKR software manages this.
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Every day you spend drifting away from your goals is a waste not only of that day, but also of the additional day it takes to regain lost ground.
Ralph Marston
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A lack of transparency results in distrust and a deep sense of insecurity.
Dalai Lama
8. Be brave, be ambitious
Set stretch targets for difficult OKRs, because that’s where the magic happens, but only if it is OK not to always hit the 100% progress mark. Reading OKR examples and taking note of their grading will help a lot.
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A good goal is like a strenuous exercise - it makes you stretch. Goals should be slightly out of reach to be of maximum value.
Mary Kay Ash
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The greatest danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it.
Michelangelo
9. Value learning
Set time aside to consider how you did and what you learned, learning is a measure of success as well.
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The only real mistake is the one from which we learn nothing.
Henry Ford
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Missing the mark is one of the ways in which we learn to hit the target.
Eric Butterworth
10. Value learning
Commit to a culture that encourages the sharing of ideas, questions, concerns and mistakes. Make it clear that speaking up and taking risks will not negatively impact self-image, status, or career.
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Psychological safety isn't about being nice. It's about giving candid feedback, openly admitting mistakes and learning from each other.
Amy C. Edmondson
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If we have a goal and a plan, and are willing to take risks and mistakes and work as a team, we can choose to do the hard thing.
Scott Kelly
What are the key stages in an OKR cycle?
OKR cycle management is key to delivering strategy and getting results
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Step 1. OKR drafting sign-off
Propose okrs, discuss and reach consensus
What do we need to make progress on most this period? How will success be measured aka Key Results? Which activities will ensure progress is made? The best OKR tools will manage this for you.
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Step 2. Launch OKRs and stay focused
You're committed, let's do this
Launch OKR and keep everyone engaged and focused throughout the entire goal cycle.
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Step 3. Weekly Check-ins
Progress, plans, problems and wins
A quick update takes a few minutes and shares progress, problems and wins with the people that matter. This again, should all happen systematically at your chosen cadence in OKR software.
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Step 4. Focussed OKR meetings
One-on-ones or in teams - execution and issue focused
Quick meetings to talk about plans and any issues.
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Step 5. Stakeholder reporting
See the data and read the narrative behind the data
A commentary that goes with the latest OKR and KPI progress results. OKR software like ZOKRI will manage this along with other steps in your OKR cycle.
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Step 6. Quarterly retrospectives
End your quarter the right way - celebrate, learn, push on
The story of final OKR % progress and what it really means. The highs, low and learnings. When ready, agree the final, fair and balanced grading of success and decide to continue, or not.
Tips for OKR success
If you’re looking to implement OKRs in your company, here are a few tips to help you succeed:
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Define what success looks like for your company.
What are your objectives and key results? What do you want to achieve? Having a clear picture of what success looks like will help you set better OKRs.
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Communicate the plan to everyone in the organization.
Once you have a clear plan, it's important to communicate it to everyone in the organization so that everyone is on the same page and working towards the same goals. You can then set team OKRs and even personal OKRs.
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Track progress the progress of your Key Results.
Progress should be tracked regularly to ensure that objectives are being met and revisions can be made as needed. This will help ensure that your OKRs are effective and achieving the desired results.
Expert Tip: Plan one quarter at a time
“Why waste time carefully picking Key Results for Q2–4 before you’ve gotten all the learnings from Q1? It may turn out there is a better metric to watch, or that something about the retention will affect the conversion strategy.”
Christina Wodtke
Christina Wodtke
Expert Tip: Use OKRs to focus efforts, save time and money
“By clearing the line of sight to everyone’s objectives, OKRs expose redundant efforts and save time and money.”
John Doerr
John Doerr
Conclusion
Objectives and Key Results are an important tool for setting goals, tracking progress, and creating a more successful company. OKRs help to align teams around shared objectives as well as provide feedback on performance.
With this guide to OKRs, we hope that you have now gained a better understanding of how OKRs can benefit your organization and the best practices for implementing them successfully.
We wish you all the best in achieving measurable results with your OKR strategy!
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