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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.
Ready to learn more about OKRs now?
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”.
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.
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.
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.
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There are many benefits to using the OKR methodology, which is why they are growing in popularity among organizations.
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.”
Share the reason to use OKRs
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 often use KPIs (but not always). If they are the measures being uses should be ideally leading indicators as lagging indicators move too slowly. You can also blend leading and lagging indicators. You then target moving the leading indicators that drive the lagging ones.
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
“OKRs look beyond the sprint and align with long term strategy.”
As far as an Objective is concerned, it must pass a number of tests:
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.
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.
Supportive
OKRs are usually supporting the execution of a strategy and the achievement of other OKRs.
Most Key Results use two different measurement formats:
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’.
Objective
Find ways to consistently scale quality leads that move along the funnel.
Key Results
Progress Based Key Results
Sometimes the Key Result you want to measure are tracking the progress of a really important strategic projects. 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.”
Objective
Develop a AI-powered dashboard for drafting website copy creates a step-change in productivity.
Key Results
Knowledge Capture Objectives and Key Results
Sometimes you have known unknowns or even unknown unknowns and your Objectives that are describing what you don’t know and need to find out. This is especially true of early stage companies and larger companies that innovate quickly.
In these instances you might set milestone or even binary Key Results. For example, perhaps you need to do a new country market analysis to decide on whether to set-up an office there and your
Objective
Evaluate the opportunity of expansion into Asia.
Key Results
Most OKR examples encourage these Key Results to be metrics that you’re trying to move from X to Y. When the future is less certain these Key Results almost become redundant.
For example, what if your business is trying to make sense of what Open AI will mean for its future right now because it is offering new ways to do many of the things we’ve always used people.
In fact, in this example it would appear that whether you’re writing content, code, or countless other applications, how we use computers alongside people is never going to be the same. You can either see this as an opportunity or a threat. The reality is it’s probably both.
Here are OKR examples that use the more common Key Result format as well as less common binary, milestone or strategic project based Key Results that are focused on investigation, discovery, innovation and rapid change.
Objective
Discover whether AI can speed up how we [PROCESS STAGE].
Key Results
Objective
Try to use AI to solve the challenge of [problem] for our customers.
Key Result
Objective
Evolve our pricing model to move from time to value based model.
Key Results
Objective
Improve patient outcomes through AI-assisted diagnosis and treatment.
Key Results
Objective
Enhance our legal services offering, using AI to improve efficiency and accuracy.
Key Results
OKRs are often preferred to other goal setting frameworks because of they encourage alignment – one OKR supporting the achievement of another.
Here is an example of a two aligned Marketing OKRs:
Objective (Aligned with Growth Strategic Pillar)
Scale the number of leads sales are receiving from Marketing
Key Results
Team: Content Marketing
Objective
Scale ‘best on the web’ cornerstone content to create traffic that converts to leads
Key Results
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.”
Becoming really good at goal setting means ensuring the right thought processes, conversations and checks have been carried out before starting to work towards its achievement.
ZOKRI can do these checks as part of its customizable OKR proposal and sign-off workflows. These can be made optional or mandatory as part of the OKR creation workflows your OKR leads and coaches can define. Or why not create your own process and questions?
A written paragraph of narrative that sits alongside the Objective. The question focuses you to create OKRs that will make a material impact (Wildly Important Goals) and tells others why this OKR matters and needs support.
Here you should choose the Company OKR the OKR align with. This might be a unifying single OKR, Strategic or departmental OKR. This selection can be made optional or mandatory in ZOKRI.
Here you should be able to name the teams / individuals you’ve spoken to.. This matters because socializing OKRs is an important step in their creation.
Here you might choose from the options like: No support needed / a little support / lots of support. The mattes because the more you need the support of other teams to make progress on an OKR the harder it is to make progress. This is why cross-functional teams are often created to work towards OKRs.
This builds on the question above and ensures the specifics of who is needed for collaboration is understood.
The final check to be done if collaboration is being relied upon.
Being overly ambitious and not having the time. money, and people to make the progress needed is not uncommon.
Creating Key Results that are outcomes not outputs is always preferable. By checking you are reinforcing the best-practice.
This is similar to the first question and double confirmation that the OKR is going to make a material impact.
Imagining achieving a goal is a great way of increasing dopamine levels and goal engagement.
Having a systemized approach to OKR creation makes it easier for teams to learn how you want OKRs to be thought about, planned, socialized, and eventually worked towards. The key benefits of a process like the one above being:
Having something you call OKRs is not enough. You need to be writing the right number of OKRs that can both move-the-needle and be resourced. Having a process that ensures that is a great way of ensuring quality, consistency and performance.
Share what makes a great OKR
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.
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
“If you’re achieving all your goals, you’re not setting them aggressively enough.”
Follow these OKR best practices to unlock the value of OKRs:
Building a visionary company requires one percent vision and 99 percent alignment.
Jim Collins & Jerry PorrasPeople are not lazy. They simply have impotent goals—that is, goals that do not inspire them.
Tony Robbins
There is nothing so useless as doing efficiently that which should not be done at all.
Peter DruckerMy success, part of it certainly, is that I have focused in on a few things.
Bill Gates
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 PaliwalIt is the long history of humankind (and animal kind, too) that those who learned to collaborate and improvise most effectively have prevailed.
Charles Darwin
Most people do not listen with the intent to understand; they listen with the intent to reply.
Stephen R. CoveyWhen you talk, you are only repeating what you already know. But if you listen, you may learn something new.
Dalai Lama
Setting goals is the first step in turning the invisible into the visible.
Tony RobbinsIf you can’t measure it you can’t improve it.
Peter Drucker
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. GivensIt’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
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 MarstonA lack of transparency results in distrust and a deep sense of insecurity.
Dalai Lama
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 AshThe 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
The only real mistake is the one from which we learn nothing.
Henry FordMissing the mark is one of the ways in which we learn to hit the target.
Eric Butterworth
Psychological safety isn’t about being nice. It’s about giving candid feedback, openly admitting mistakes and learning from each other.
Amy C. EdmondsonIf 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
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6 steps to OKR cycle management that delivers strategy and gets results:
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.
Launch OKR and keep everyone engaged and focused throughout the entire goal cycle.
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.
Quick meetings to talk about plans and any issues.
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.
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.
Share the 6 key stages of an OKR cycle
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. You can read more about OKR vs KPIs here.
To ensure your OKRs are achieved you need to ensure priorities are worked on and issues are solved as part of your standard business operations. All of this is made easy to manage, discuss and report on in ZOKRI.
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. You can read more about OKR vs KPIs here.
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.”
Share how to measure OKRs
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.
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
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If you’re looking to implement OKRs in your company, here are a few tips to help you succeed:
Expert Tip: Use OKRs to focus efforts, save time and money
“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.”
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.”
Share these tips for OKR success
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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