The Objectives and Key Results goals framework was created by Intel’s Andy Grove and then popularized by venture capitalist John Doerr in his New York Times best-seller Measure What Matters. Companies from Google to Adobe have rolled out OKRs to accelerate growth and drive innovation by helping teams see how their work fits into the overall company’s objectives.
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.
Objective: what you’re trying to accomplish.
Objectives are qualitative, and should be inspiring, e.g. “Ship an amazing MVP!”. An Objective can be long-lived, or you might set the deadline to be the end of the year, the next quarter, or even the next month (especially if you’re a startup where things change very quickly). The objective should be hard; the point is to push yourselves as a team or organization.
“When properly designed and deployed, they’re a vaccine against fuzzy thinking — and fuzzy execution.” - John Doerr
Key Results (KRs): how you’ll measure whether you achieve the objective.
A KR is measurable and verifiable; there’s always a black and white answer whether it’s achieved. When possible, use a metric with a number, e.g. “Grow to 1000 active users in our private beta”. Setting around three KRs for an Objective is a reasonable place to start, and you’ll want to assign a specific person to lead the KR and be accountable to its’ success. Completion of all the key results means you’ve achieved the Objective.
OKRs are a statement of intent by any team in your organization. It’s a public way of announcing what the team is going to work on and who will be accountable for its success or failure. At the company level, OKRs act as a north star for your business-- goals that are counting on efforts from every level of the business. Setting company OKRs allows individual teams to set goals that help drive those overarching objectives while preserving their autonomy and enabling their own development and growth.
The Objectives and Key Results (OKRs) framework can be a superpower for creating an environment where employees are able to work with purpose. Companies like Intel, LinkedIn and Airbnb have achieved amazing results with OKRs, but less often discussed is the fact that deploying a goal framework in the right way can create a vastly better working environment.
The venture capitalist and OKR guru John Doerr writes about four “superpowers” of OKRs:
Objectives need to be clear, inspiring, and easy to rally around. The golden rule of writing Objectives is that any reasonable person should be able to understand the Objective’s aim and motivation at a glance. When writing your objectives, make sure they are actionable, time-bound and ambitious.
Key results determine whether an Objective has succeeded or failed. The golden rule of writing Key Results is that any reasonable person would agree that completing all of the Key Results would guarantee completion of the Objective. Be very clear when defining key results. Make sure they are quantifiable and whenever possible, use metrics instead of a binary result. When Key Results are measurable, it's effortless for the team to see their progress and whether or not the Objective has been achieved.
Just like with objectives, asking a few questions about your key results will help make sure they’re describing the outcome you want:
When it comes to setting OKRs, 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. 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. During the brainstorming, give your team the freedom to contribute and to incorporate their perspective into the OKRs. This helps team members to stay aligned and inspired while working on the tough challenges tied to the objectives and key results.
Setting great OKRs takes practice, and early in the transformation towards a more dynamic, outcome-based culture, it’s easy to go off the rails. Some frequent mistakes when planning with OKRs include:
The formula for writing OKRs is simple: Objectives are goals and intents, while Key Results are time-bound and measurable milestones under the Objective. But what are some good examples of OKRs to communicate this goal-setting equation?
Let’s start with an example for when you’re planning a meeting about setting OKRs. John Doerr, author of Measure What Matters, recommends these OKRs:
There are three Key Results in this OKR, but according to best-practices, the maximum you should have is five.
When getting started with OKRs, the most common questions we receive are "How do I write good OKRs?" or "What should I include in my OKRs?
" To answer these questions, here is a list of example OKRs by department to help you get started.
Objective: Ensure the company meets the revenue targets
- Increase new inbound sales from $25k to $50k per month
- Attract 500 new marketing qualified leads
- Attract 100 new marketing qualified leads from EMEA
- Generate >$30M in new qualified pipeline from Marketing sourced leads
- Document and implement the new Account Based Marketing (ABM) process
Objective: Successfully Launch the New Product
- 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
Objective: Improve the quality of our product
- 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%
Objective: Hit quarterly revenue of $10M
- 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
Objective: Significantly improve our benefit program while staying within budget
- 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
Objective: Increase product adoption
- 100% of assigned accounts have at least 3 live touches
- Write re-engagement messages for 12 customer lifecycle points
- Improve NPS score to 65+
Objective: Improve our Annual Budgeting Process
- 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
Naturally, the executive team will establish top-level OKRs for the organization. Once that is complete, it's tempting to cascade OKRs down through the organization-- from company to department, to team, to individuals. 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. It’s far better to flatten the levels of OKRs to just the company at large, departments, and teams, and allow your teams to set their own goals, aligning theirs to the company objectives in their own terms.
“Cascade goals are a top-down, one-way, irreversible flow, with no feedback cycles that end crashing on the rocks. Everything an agile, innovative organization does not want to be.” - Felipe Castro
Setting the top-level goals for the organization gives you the opportunity to align OKRs development through a bottom-up process. Invite teams at every level to 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 okay.
Equally as important, especially for companies that are new to the OKR process, is keeping OKRs at the team level as opposed to going down to individual OKRs. Team members should lead or contribute to Key Results, but adding in another level of granularity creates additional fail points and too often ties OKRs to performance management, which discourages risk-taking and aspirational goal setting. Focusing on how teams as a whole contribute to overall company goals better helps them deliver on those goals.
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.
How you communicate your OKR strategy to the rest of the org is an important factor in the success of your OKR implementation. Your teams already have their hands full with their day-to-day operations, and asking them to add an additional layer to their work will only work with a compelling reason why. Some common things to address when communicating with the rest of the organization:
One of the biggest indicators of failure for OKRs is if a team doesn’t establish a regular cadence of reflections or check-ins on their goals. Too often, teams fall into the habit of setting their OKRs, putting them into a spreadsheet, and then only rediscovering them at the end of the quarter when it’s too late to make any changes that would have helped achieve those goals. Or, only the Owner or Department Leader is responsible for updating a shared spreadsheet, without input or context from the team that is responsible for delivering.
If a regular team-wide cadence for input doesn’t exist, there’s no mechanism in place for the team to think critically about the progress they were making towards those goals or how to better strategize or prioritize so that they see success.
Teams should consistently be prompted to provide their confidence scores and updates to their OKRs to have open and honest conversations on the likelihood of hitting their key results. This helps teams better surface leading indicators of failure and find ways around them, and also serves as a reminder that OKRs are learning opportunities, that hitting or missing their targets has value. By the same token, consistent review of progress allows for a celebration of successes along the way, and recognition of work well-done.
Creating a positive and proactive team culture around your OKRs helps not only with the likelihood of success, but also makes the process of closing out and having a retrospective for your OKRs easier since the process around learning from them has already been established.
The process of closing out OKRs should be a team effort -- everyone worked together to deliver the results, and everyone should come together to see the results. An ideal process would be:
Turning the process of closing your team’s OKRs into more of a ceremony can make it into a milestone moment. Moving slowly through each key result and taking a moment to celebrate the wins and dig into the growth opportunities in an end-of-quarter meeting takes OKRs from a theoretical goal setting exercise into a way to come together and truly see all of the progress that has been made as a team.
Not using a modern OKR management tool can provide a variety of challenges. Spreadsheets don’t scale and ultimately where strategies, goals, and progress disappear. Teams who use a software-based OKR tool have better alignment and work together with purpose. By having purpose-built software for the job of goal tracking, you’ll avoid a ton of time spent running around and getting updates. Here are a few reasons why you should use software over a spreadsheet:
An ideal OKR tool will build and reinforce great practices while fitting in seamlessly with the way your team already works. And a successful evaluation should always begin with the results you’re out to achieve. Some of the questions you should be asking as you evaluate different OKR tools include:
The OKR framework is a powerful, flexible way to align your business strategy. A great OKR tool should never hold it back. As you’re considering your options, asking a few simple questions will lead you to a fantastic tool – for even more in-depth guidance, read our post on choosing an OKR tool.
Is your company embracing a decentralized office? Distributed teams are growing in popularity and the ability to work remotely isn’t just a minor perk, but a top-line benefit on more and more job postings.
This increase in remote work isn’t without its challenges, however. While operational issues are easier to plan for, others are less apparent, though just as important–like ensuring your remote employees are aligned to your company mission, values, and goals. If alignment in traditional organizations is “the fundamental challenge,” then alignment of remote teams is twice as challenging.
Keeping remote employees engaged isn’t an easy feat by any means. But too often, remote employees are divorced from the broader work and how that work fits into the bigger picture. It can be difficult, especially if you don’t get to siphon off hallway knowledge, to feel comfortable in your place within the company or to really feel like you’re working with purpose. Here are three ways to bring remote teams to the forefront like we can do with in-office teams?
1. Don’t rely solely on communication tools to talk through high-level work. Make sure to communicate your goals clearly and in the appropriate places.
2. Give the broader context of how the work fits together. Make sure your employees understand your logic for the goals that you set.
3. Let your employees see what their role in the goals is. Teams work better when they know what their purpose is.