Objectives and Key Results (OKRs) is an agile goal-setting technique developed back in the 1970s and is gaining prominence with many well known organisations such as Google and Atlassian using it.
1. OKRs explained
"OKRs" stands for Objectives and Key Results and were first developed by Andy Grove back in
the 1970s when he was president of Intel. Since then they have been used by organisations
such as Google, Atlassian and even Bono with huge success.
OKRs serve as a simple tool to help organisations achieve their goals by building specific and
measurable actions; as well as communicating and monitoring progress toward them on a
frequent basis - typically quarterly.
Put simply, objectives are WHAT you want to achieve; and by definition are significant,
concrete, action orientated and (ideally) inspirational.
Key results benchmark and monitor HOW we get to the objective. Effective key results are
SMART (Specific - Measurable - Actionable - Realistic - Time Bound). You shouldn't be left in
any doubt if you've either met a key result ror you haven't.
Usually a limit of three to five objectives is recommended for each cycle and objectives should
be tied to five or fewer key results.
At the end of the designated period you should declare the key result fulfilled or not. Most
organisations evaluate their key results on a scale of 0.0 to 1.0, where 0.6-0.7 is the desired
sweet spot.
Where an objective can be long-lived, persisting for a year or longer, key results evolve as the
work progresses. Let's look at an example...
Let's say we're a GM of a NFL team. I have one objective the WHAT: Be the most successful
team in the NFL
My objective has two key results (1) to win the super bowl (2) Fill the home stands to 90%
capacity - the HOW. If I fulfil both of these key results we're bound to be the most successful
team.
I then share my OKRs throughout the organisation and as a result, the head coach and the
President of Marketing; use my key results for their respective objectives. From here each line
coach and business units within the Marketing department will create similarly aligning OKRs;
and very quickly we've gained alignment and we're moving in the same direction.
What I like about the OKR framework over other traditional goal-setting techniques or
Management Based Objectives such as Balanced Scorecards and KPIs is that it's:
2. Simple and agile: Reviewing objectives regularly allows organisations to respond quicker to
changing market conditions. It's also a beautifully simple framework that isn't time consuming;
allowing organisations more time to pursue their goals rather than creating them.
Creates focus, clarity, alignment and stretching within an organisation: OKRs are made
public. Since they are transparent it helps ensure alignment throughout all levels and
departments in achieving the objectives and to ensure everyone is moving in the same
direction.
Bidirectional: Because OKRs are transparent, they can be shared without cascading them in
lockstep - unlike traditional goal-setting frameworks. Once strategic OKRs are set and
announced, teams and individuals build OKRs that align with these simultaneously. This creates
a much more efficient and effective process than cascade goal-setting models. It's
recommended that every team and individual create 50% of their OKRs
Encourages collaboration: OKRs make it easy to understand how every person in the
organisation has a critical role to play in achieving the strategic OKRs. Since everyone is
moving forward toward a common objective, it makes it clear that no one can accomplish the
ultimate goals alone.
If you're looking to introduce OKRs into your organisation be considerate of the following points:
1. It is expected that you won't achieve 100% of your OKRs
If your organisation achieves 100% of its OKRs, they are likely to be too easy and you need to
set more ambitious goals.
2. OKRs should never be used an employee evaluation tool
In order to have employees feel safe setting ambitious OKRs, they need to know they won’t be
negatively impacted if they don’t achieve every OKR.
3. Everyone needs to get on board
The commitment to OKRs as a goal-setting framework needs to be company-wide. The process
won’t work if only a portion of employees and management are committed.
4. The process needs to be lightweight
Don’t overburden the process with unnecessary meetings or documentation. Part of the allure of
the OKR process is that it is beautifully simple and lightweight.
5. Patience with your organisation as you learn the process
As with anything you do, it might not be perfectly executed the first time you try. Give yourself
and your organisation time to become proficient with the OKR process.
3. OKR setting workshop format
Prep time: 45 mins
Time: 120 mins
Setting OKRs: set the stage (5 min)
(Re-)introduce your team to the terminology and scoring system. Remind them that OKRs are
supposed to be "uncomfortable". They won't be negatively impacted for setting an ambitious
goal and missing it.
Does the whole concept make your team nervous? Good.
That means you're outside your comfort zone – the only place real growth can happen!
Setting OKRs: choose your objectives (30 min)
Pose the question "What are the most important impacts we need to make in the coming
quarter?"
Spend a few minutes brainstorming ideas on sticky notes and posting them on a whiteboard or
wall. Group similar ideas together. From there, distill your ideas down into 3 to 5 aspirational
objectives.
Objectives should be high-level, qualitative statements that are aspirational – not tasks or
granular outcomes.
Setting OKRs: identify your key results (60 mins)
How do you measure progress toward a qualitative goal that is inherently un-measurable? You
identify measurable outcomes that indicate you've achieved your objective.
For each objective, think about the results you would see (and can measure) if you reached it.
Again, these are not tasks. These are results.
Wrong: "Ship feature X by the end of the quarter."
Right: "Shipping feature X increases new user sign-ups by 10% this quarter."
Assign each KR an owner on the team. If a KR will require collaboration with another team,
great! Follow up with them afterwards and make sure they're on board.
4. Setting OKRs: stretch yourself (15 min)
Review the objectives and key results you've built out and ask whether they're ambitious
enough. If you feel totally confident you can hit a KR, increase the target by ~30% and create a
plan to try and hit it. If you're not at all sure you'll hit a KR's target, it's probably set just right.
Make sure the KRs are articulated such that they can be scored on a sliding scale. Hard
numbers and percentages work great here.
Also consider whether you have too many or too few Os and KRs. I've found that for a single
team of 7-9 people, three objectives with 2-3 ambitious key results each is about right.
Setting OKRs: agree on next steps (10 mins)
Ask your team if there are any loose ends to tie up before you go into execution mode. Any
placeholder numbers to firm up? Objectives you should share with other teams? Or people from
other teams to recruit as co-owners of a KR?
If you end this session with a lot of open questions, that's ok. Schedule a follow-up session in a
few days and task each KR owner with the task to update their KRs prior to the session, so you
that session with your OKRs baked and blessed.
Good luck!