You’ve committed to the OKR methodology, you’ve implemented it within your organization and rolled it out across teams, run through a few OKR cycles, and are starting to see some of the major benefits of OKRs. Now that you’re building that operational cadence and maintaining those positive habits, it is time to take your OKRs to the next level.
Remember, the combination of broad goals and quantitative metrics is the key differentiator of OKRs from other goal-setting models, so setting the right metrics is imperative to OKR success. When creating your OKRs for the quarter, here are some concrete tips to help you set better OKR metrics, and ultimately achieve better results.
What is a metric?
It’s not a Key Result unless it has a number —Marissa Mayer
Generally, Key Results are the metrics used to measure whether or not you've accomplished the Objective. When defining key results, it's important to state these in a manner that's very black and white. We don't mean a binary yes or no answer, rather, strive for a very definitive metric with a number.
Defining key results using metrics with numbers makes it easy to communicate progress towards accomplishing your Objective or goal in a meaningful way. Especially within the OKR framework, having quantitative metrics help provide the balance between lofty, ambitious goals, and the concrete measurements (or plan) on how your team will gauge if you achieve that goal.
Why do OKRs use metrics?
Tracking OKRs from output to outcome is why the methodology is so popular with top-tier companies: it keeps teams focused, aligned and committed to the goal. Every OKR should be able to be tracked via the metrics established when the OKR was written. And with regular (ideally weekly!) check-ins, it prevents slippage or goals getting lost in the day-to-day tactical shuffle. Having these reference points to grade your current OKRs is the long-term magic in assessing whether or not you’re on track to meet this objective and why. Here are some of the unique ways that OKRs can benefit from metrics, including…
- Metrics make success (and failure) very clear: Clear, quantitative metrics leave no question as to how close your team came to the goals they set. You either hit the goal or you didn’t. If you did reach your goal, ask yourselves questions like: what were the specific factors that led to this success? Can we be more ambitious next time? And make sure to celebrate your wins too! If you didn’t hit your goals, it creates an opportunity for a healthy conversation about why, and ultimately sets you up for success moving forward. For example, ask yourselves questions like: what prevented us from hitting this goal? What could we change for this goal next quarter? Or even, was this the right metric to track success?
- Metrics make an agile approach possible: With a measurable goal, you’re also able to have measurable progress reports midway through the process. Tracking progress allows you to recalibrate target metrics as needed.
- Metrics make collaboration easier: Everyone has a clear vision at the outset of setting the Key Result and there is a common “language” through the entire OKR cycle. When each contributor understands what defines success, it's easier to communicate and work better together to achieve that goal.
Examples of useful OKR metrics
Innovative teams often strike a balance between reporting KPIs that are set for the entire business unit and also tracking ambitious OKRs to meet their goals. It’s important to do both. But as teams begin defining their KR metrics, it’s important to remember that these key results are designed by the people who will be implementing them, which means that every department's metrics may look a little different. Here are some examples of good OKR metrics in a diverse selection of fields such as:
Product Management OKR: Successfully Launch the New Product
- Key Results:
- Conduct 30 customer development interviews
- Review 10 usage videos via UserTesting.com and summarize it internally
- Do 2 training sessions on the new product for Marketing and Sales teams
- Review 15 customer requirements documents from Product Marketing
Engineering OKR: Improve the quality of our product
- Key Results:
- Reduce the average number of new bug reports from 72 per month to 60 per month
- Increase the crash-free ratio from 96% to 99% for the new release
- Reduce average QA rejections per-feature from 1.7 to 1.0
- Increase code coverage from 35% to 50%
Sales OKR: Hit quarterly revenue of $10M
- Key Results:
- Expand successfully into the APAC region by achieving $1,000,000 in New ARR
- Achieve >30% of New Business in Upsell/Cross-Sell to existing customers
- Increase the conversion rate from SQL to Opportunity to 11%
- Decrease the sales cycle for the Standard version of the product from 32 to 15 days
Human Resources OKR: Significantly improve our benefit program while staying within budget
- Key Results:
- Evaluate benefit programs of 5 similar local companies, select and finalize contract with new vendor with best fit
- Ensure >85% participation in benefit program
- Maintain benefits budget below $500 per team member per year
Customer Success OKR: Increase product adoption
- Key Results:
- 100% of assigned accounts have at least 3 live touches
- Write re-engagement messages for 12 customer lifecycle points
- Improve NPS score to 65+
Finance Objective: Improve our Annual Budgeting Process
- Key Results:
- Review & train on 5 Department heads on new process
- Review every department's budget proposals before mid-Q3
- Get sign off for the final budget from all leads
For additional examples of OKRs by department, visit our OKR examples resource page.
Setting OKR metrics: best practices
Well designed metrics within Key Results make transformative success possible for OKRs. Here are some best practices for setting metrics, such as:
- Develop target metrics through iteration: As you set your KR metrics, having a constructive dialogue with your entire team during the planning stage can help get buy-in from all contributors up front.
- Focus on macro issues at first: Set metrics that address higher-order concerns during early OKR cycles. By starting at the top, it may solve issues downstream, or help uncover other areas that need to be focused on in future OKR cycles.
- Avoid typical business ‘health’ metrics: Instead of basic business bottom-lines (total sales, ROI, etc.), choose more granular, nuanced metric targets specific to your team
- Know your starting metrics: To know where you want to go, it's important to understand where you’ve been. The same concept can be applied to OKRs: in order to set quantified goals, you need a quantified snapshot of current operations, and how to correctly measure these metrics.
- Track goal confidence metrics and morale whenever possible: Morale is key to success and follow-through, so you’ll want to chart it throughout the OKR process alongside with the Key Results. That’s where tracking OKRs via software can easily monitor both the quantitative and qualitative feedback throughout an OKR cycle, and help to identify issues early, before they become too big.
- Track metrics often: Identifying measurable key results allows you to check progress towards your objective. If you set a Key Result metric that can only be measured once a year, you’ll have a lower chance of understanding how your work helps to achieve your objective.
The reality is that most work, especially toward important goals, requires cross-functional collaboration. Koan offers the flexibility you need to easily create teams for cross-functional initiatives. By using software, you can assign goals to multiple teams to gather data from everyone involved. And to make the OKR process even more collaborative, you can use reflections to keep each other informed.
Get started using Koan to track your OKRs and metrics absolutely free, forever. Set yourself up for success with an OKR platform.