Guidelines, best-practices and questions to help you and your team write incredible OKRs
First, a little context about OKRs. What are they? Where did they originate? In a simple answer, they are Objectives and Key Results—created by Andy Grove of Intel back in the 1970s and initially termed as "iMBOs." Later taught to John Doerr by Grove who formalized the term we know today as "OKRs." John Doerr—widely recognized for his New York Times best-seller "Measure What Matters"—introduced the philosophy to the founders of Google back in 1999, and Google’s undeniable success helped spread awareness of the framework.
The OKR methodology is a collaborative, goal-setting framework that helps teams and organizations reach their goals through identifiable and measurable results. By design, the OKR framework works across teams to create a standard the whole company can adopt. OKRs give purpose to teams and organizations.
Objectives - What you're going to accomplish
Objectives are what the team states it will accomplish. When setting team objectives, you want to make these statements qualitative and inspiring. Think about whether the Objective evokes emotion within your team. You want the team to look at that objective and say, "yeah, I want to help get that done."
Keep your Objectives to three
Typically objectives are stated monthly or quarterly. We recommend having no more than 1 to 3 objectives per team, per quarter, but the exact quantity you have depends on the needs of your organization. The situation you want to avoid is having so many priorities that you actually have no priorities. Keep this in mind.
Pro-tip: When stating objectives, push yourself to think about why achieving the objective matters. More on that below
Key Results - The metrics to know if the Objective was achieved
Key Results measure how you're going to know that you've accomplished the Objective. When defining key results, 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/goal in a meaningful way. Always push your team to create key results with a numeric value for the metric.
With Key Results, keep it to five or less
Again we don't recommend more than three to five key results be stated per Objective, but the exact quantity depends on your business. The good news is that it's easy to change your statements later, and it takes practice to get a rhythm for defining your objectives and key results.
OK, let's write some incredible OKRs
When it comes to creating and writing incredible OKRs consider the following formula: We will __(Objective)__ as measured by __(these Key Results)__
Objectives should be:
We will accelerate sales growth in Small-to-Medium Enterprises this quarter as measured by...
Additional examples of objective statements that we've seen from our customers:
"Ship an amazing MVP!"
"Have super successful pilots with X and Y and Z"
"Solve our support ticket crisis"
"Move from monthly release to continuous release process"
Key Results should be:
Black and white
Quantifiable - whenever possible, use metrics instead of a binary result
3-5 per Objective
Example Key Results:
100% of leads have an account rep assigned and a "plan to land"
Prove bottom-up "land and expand" within (2) two existing SME accounts
Close (6) six new SME customers before the end of quarter
Be very clear when defining key results. Make sure they are quantifiable. When Key Results are measurable, it's effortless for the team to see their progress and whether or not the Objective has been achieved.
It's not a Key Result unless it has a number —Marissa Mayer
Common pitfalls when writing OKRs
The primary pitfall to avoid is signaling that there are so many priorities that no-one in your team can see the path forward. Also, OKRs shouldn’t be so vague or unattainable that the team won’t believe in them.
Questions to ask the team while creating OKRs:
Are there too many OKRs? Too few?
Do they represent tasks rather than outcomes?
Are the targets realistic?
Are they ambitious enough?
Do we have the resources we need to deliver?
Key guidelines for creating OKRs
All teams create their own OKRs—the OKR process works best when it draws on expertise at every level of the organization to help the company win
Incorporate feedback from peers, management, and reports
OKRs should be shared publicly—transparency of OKRs drives greater alignment
Most companies should consider avoiding individual OKRs tied to performance management
It's straightforward to see a process of tying OKRs to performance management and incentives. But OKRs are meant to push your teams and your business forward, which requires asking people to get creative and innovate. That means you want them to dig-in and take risks, make bets, and think outside of the box. When you tie individual performance and incentive to a process that involves creativity and risk, a more conservative, reward-seeking part of the brain kicks in, and you lose the edge of disruptive thinking that pushes the business forward.
How to get the team onboard
1) Have the goal conversation, first
Sit down with your team and ask them, "what are the three most important things for us to accomplish in the next three months?" Then, ask them why it's important, and then ask them why again, and why again.
By continuing to ask why, leaders prompt their teams to share meaningful details as to why they are trying to accomplish specific objectives. If your team collectively understands the “why” on a deeper level, you're likely to end up with better active statements than you would otherwise, and you'll gain greater commitment.
For example, maybe one of the objectives is "we're going to ship an iOS App." Fantastic. That’s a great objective, but it's not inspiring.
So we ask the question, "why does that matter?"
The more profound answer— "It matters because there's been a drop-off in customer engagement and our customers prefer mobile" Or, "it matters because in order to stay viable in the market, we need to have a mobile presence and a native app to meet our customers where they expect us to be."
So a new objective might be "We're going to win back our customers by shipping an amazing iOS app."
Digging into why with your team brings to light the key aspects that make objective statements truly inspiring to employees.
2) Prepare draft goals and share with the team
Publish a draft of objectives ahead of time and then ask your team for feedback to get the conversation going. Sometimes, staring at a blank piece of paper is a lot harder than reviewing work in progress.
During this sharing exercise, instead of asking the question, "do you have any questions or comments?" consider asking your team to , "please suggest one or more variations that would improve this objective." Give your team the freedom to contribute and to incorporate their perspective into the OKRs.
We do this exercise every quarter at Koan. Our CEO shares a set of objectives with us, and we discuss ways to get to the heart of what we are trying to accomplish. By the end, we have clear, meaningful objectives across our teams. As we review progress in the weeks ahead, we're reminded why these objectives matter. This helps us to stay aligned and inspired while working on the tough challenges tied to our objectives and key results.
3) Conduct a team brainstorm to set Key Results
When it comes to setting key results, it's a good idea to conduct a team brainstorm. Brainstorming gives your team a level of ownership and drives accountability for those results. Brainstorming engages your team and inspires them to care as much about the OKRs as you do.
4) Debate Key Result ideas collectively
When crafting Key Results for each Objective/goal, get out the sticky notes. Have each team member jot down suggestions and take turns sharing and debating their metrics until you find the right level of difficulty to push the team.
5) Don't "cascade" OKRs down the org chart
It's tempting to cascade OKRs down through the organization. But if all your goals fit together into a pretty parent/child tree, teams almost by definition aren’t thinking creatively, taking risks, or showing initiative. It hinders alignment and collective buy-in across the organization, too.
Instead, consider aligning OKRs development through a bottom-up process. Invite teams at every level define their OKRs before bringing the organization together to understand and challenge their alignment with your overarching vision. Not all OKRs within the organization will align to the company-level, and that's OK.
Ultimately, you want to create a process where teams feel empowered to create their OKRs and then challenge teams across the business to ensure they’re focused on the right priorities at the right time. This process encourages creative thinking and informed risk-taking, all to push your business forward.
Some goal-setting best practices
Metrics in Key Results
Whenever possible, prefer metrics with numbers over binary results. Remember, it's not a key result unless it has a number!
Also, during early efforts in the OKR process, your metrics should be focused on macro/massive changes. As you move through the OKR process, later efforts may include many micro-optimizations.
Not all important metrics should be incorporated as OKR goals
You already have a separate set of health metrics that you track and report regularly. Those are typically treated as "business as usual" metrics. These health metrics should only become OKR goals if they become a problem or have become the center of attention for a potential change. All OKR goals should lead to fundamental change that pushes the organization forward.
For example, maybe you're a tech company and CSAT is declining rapidly over complaints about product quality. Setting an OKR focused on this problem will encourage you to invest the time and effort to get things back on track. Otherwise CSAT is normally a health metric.
Questions/statements to help the OKR process
Working through the OKR process both here at Koan with our customers, we've developed a set of tests that can help foster healthy conversations during the goal-setting process.
"You don't have goals, which means you haven't formalized priorities for your team. That's crazy"
"Can everyone on your team say the goals without thinking really hard?"
"You have too many goals. Seriously"
"Your goals don't seem that important. Will achieving them mean transformative progress?"
"There don't have to be goals to represent all the work getting done"
"Do your goals create more or less autonomy on your team?"
"Good difficulty = 'I'm pretty sure this is possible, but not sure how yet'"
"You just implement what Product says to do? That doesn't sound like a very interesting job for you or your engineers"
Some final goal-setting advice
Whenever possible, let team members decide which key results they'll lead
Make it OK to deliver bad news and encourage it to be early. "If you tell me there's a problem two weeks before the deadline, it's my problem. If you tell me there's a problem two days before the deadline, it's your problem"
With the above, know that it's OK to change your goals midstream if it means defining new success metrics
Goal confidence ratings are subjective but set some norms about what they mean to your team
Goals are not the same as the plan. Link a plan to each key result so that everyone has visibility into the tactics of how the goal will be achieved
Rate each goal every week
Make it OK to stretch and fail
Finally, remember that it's crucial to celebrate WINS and learn from FAILURES.
Celebrate when you win by providing public recognition of the team leads and supporting players. Use the opportunity to connect the win to the bigger picture of why it matters and be sure to have retrospectives with "what went well, what didn't, how can we improve the goal-setting process the next time?"