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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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:

OKRs hierarchy 2023

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:

OKRs - Increased impact, clarity and focus
OKRs greater-accountability

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.”

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.

OKR

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.”

What makes a great Objective and Key Result?

Writing Objectives

As far as an Objective is concerned, it must pass a number of tests:

Writing Key Results

Most Key Results use two different measurement formats:

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.”

Measuring progress of OKRs

The success of your Objective depends on two factors:

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.

Expert Tip: Don’t be afraid to set ambitious goals

“If you’re achieving all your goals, you’re not setting them aggressively enough.”

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.

OKRs KPIs keep score

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

An example of two Marketing OKRs that are aligned

Department: Marketing

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

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.” 

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.”

OKR allow you to set measurable goals that are SMART and FAST

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.”

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.

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.”

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?

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.

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.

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.

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.

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.

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.

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.

9. Value learning

Set time aside to consider how you did and what you learned, learning is a measure of success as well.

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.

What are the key stages in an OKR cycle?

OKR cycle management is key to delivering strategy and getting 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.

OKR Drafting
Launch OKR

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.

Quarterly Retrospectives

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:

okr-tips

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.”

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.”

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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