OKRs
7
min read
Larry Page, the former CEO of Alphabet and co-founder of Google, publicly claimed in John Doerr’s book “Measure What Matters” that —
OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of 'organizing the world’s information' perhaps even achievable. They've kept me and the rest of the company on time and on track when it mattered the most.
To learn how to use OKRs for 10x growth in your company too, keep reading!
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What is an OKR?
OKR stands for Objectives and Key Results (OKR), a popular leadership tool for setting, distributing, and monitoring short and long term goals and results that align organizational purpose with individual targets across all levels. OKRs are frequently set, regularly tracked, and modified periodically. There are several aspects of OKRs that organizations need to understand to facilitate impact. This guide will help you navigate through several resources on the entire OKR lifecycle.
Components of OKRs
Before we move on to the different considerations of OKRs, let’s quickly understand the 3 key components of any OKR which you must refer to when writing OKRs for your organization. John Doerr, one of the most prominent venture capitalists, who introduced Google to OKRs, uses a simple formula for setting Objectives and Key Results—
Typically, an OKR framework must have 3 parts to be effective — an objective, 3-4 key results, and key initiatives (optional).
1. Objectives (where do I want to go?)
The objectives constitute the qualitative goals to be achieved on organizational, team, and/or individual levels. Objectives must be aspirational, time-bound, easily understood, actionable, and qualitative.
2. Key Results (how to ensure I am getting there?)
Each key objective must be complemented with 3-4 clearly defined measurable results that are aspirational but achievable and quantifiable. Key results determine whether an objective has been achieved or not. Key results can be characterized by their levels of difficulty, thus acting as a milestone.
For example,
Key result 1: Quantifiable target that can be achieved with 90% certainty.
Key result 2: Quantifiable target that can be achieved with 50% certainty.
Key result 3: Quantifiable target that can be achieved with 25% certainty.
Former Yahoo CEO Merissa Mayer defines key results by their quantifiability — “It’s not a Key Result unless it has a number.”
3. Initiatives (how to get there?)
The third component is the initiative or projects which constitutes a series of tasks or actions that you need to undertake to reach where you want to go. This clearly illustrates the how to compliment your why of objectives.
Setting OKRs and OKR implementation
Now that you understand the importance of OKRs for your organization, it is time to explore how you can leverage them for growth. You need to adopt a robust process for setting OKRs as well as for smooth OKR implementation. Your plan or process should focus on:
- Accountability, where you have one person responsible for implementing and managing OKRs — known as OKR Master or OKR Champion or OKR Ambassador
- Revision, with a system (preferably a software or tool) in place that helps you shift your OKRs as and when needed, generally mid-quarter
- Cadence, where company-wide goals usually take an annual approach, while team / departmental goals require quarterly cadence to remain effective in an agile environment.
How to create a Robust OKR Process: Read this article, for a detailed understanding on OKR cycle, which includes tips on:
1. Setting OKRs effectively
To illustrate top goals and priorities, based on collective brainstorming which are ambitious yet achievable, measurable and validate them too.
OKR Setting Template: Refer to this template for setting OKRs effectively.
2. Communicating OKRs across the Organization
Explicitly communicate/ roll out your OKRs and initiatives to highlight the responsibility of each team member and build organization-wide visibility using the right platforms.
3. OKR implementation to drive alignment
Start OKR implementation and the onboarding process with an OKR training module and make it easy to access OKRs, giving your employees real time visibility.
OKR Implementation Template: Use this template for more understanding
4. Robust Check-ins for OKR Tracking
Ensure regular check-ins for tracking OKRs by setting a regular cadence, focusing on achievement, blockers/enablers, using automated OKR progress reports, AI recommendations, etc.
OKR Tracking Template: Use this template for tracking OKRs with efficacy.
Run Successful Weekly OKR Check-ins and Quarterly OKR check-ins: Check out these actionable Playbooks to improve your check-in process immediately
5. Grading OKRs for Success
Set regular review cycles with clear data points to facilitate retrospective OKR analysis and decide which OKRs need to be continued for the next OKR cycle and create new ones.
OKR Grading Template: Use this grading template for grading OKRs for your organization.
Types of OKRs
Prior to moving to the next section on OKR review, here is a quick snapshot of how you can set different levels of OKRs:
1. Company OKRs
Define the company-wide vision and break company strategy down to company OKRs i.e. 3-4 specific targets your company must achieve within the next year.
Include representatives from all levels while setting company OKRs to help the management understand what resources and support their employees need to achieve those OKRs on time.
2. Team OKRs
Team OKRs are set quarterly by team managers with direct inputs from team members and other teams’ leaders. Not every company-wide OKR needs to be reflected in every team’s OKRs.
Team OKRs should help all employees stay focused on their goals despite the distraction of urgent, impromptu work needs.
Strategic Goal Alignment: How to Align Teams Using OKRs: Check out this article for to understand how to facilitate team OKR alignment.
3. Individual OKRs
Individual OKRs are usually the initiatives that each individual team member must complete Weekly. Individual OKRs are only for high priority tasks and should not exceed 3, and must not become another checklists.
OKR review
Simply setting and implementing OKRs is not enough, you need to constantly ensure OKR review to track your progress against each objective and key result and eventually, identify enablers and blockers to accelerate progress.
How to Run a Successful OKR Progress Review: Read this article to identify all the necessary steps and best practices for OKR review. It includes:
- Three cycles, of OKRs i.e.
- Weekly to maintain continuity and encourage real time updates
- Quarterly to get a more expansive view on performance progress
- Annually to facilitate OKR grading and setting new OKRs
- Insights on how to prepare for different OKR review cycle for before, during and after the meeting
- Top 15 questions to ask during OKR review meetings
OKR examples
To help you get a practical understanding of what OKRs look like, we have compiled a few OKR examples. Since different teams have different OKRs, this quick snapshot captures broad guidelines for several business verticals, which can be refined for others as well.
Sales OKR Example: How to Write OKRs for Sales Team: This article will help you set specific OKRs for the sales team by focusing on:
- How to write OKRs for sales team, with 6 steps
- Top sales OKR examples for different stages of the sales cycle including lead generation, nurturing, closure and post sales
OKR software
Getting started with OKRs on your own can be daunting at first. With multiple priorities around you, it is best to partner with some OKR software which can help you automate processes, build organization-wide OKR visibility, drive accountability, track real-time progress and much more. However, you are bound to have several apprehensions about OKR software if you are just starting.
To start with, you need to create buy-in for OKR software. This involves creating a business case.
Should Your Business Invest in OKR Software? See the ROI: This article details the business impact of OKR software by helping you understand the potential return on investment. Explore the article to understand:
- The ROI of Goal Management using OKRs (real statistics of org-wide improvement)
- How an OKR software makes a difference
- How you can calculate the ROI of an OKR software
It will help you gauge the qualitative and quantitative aspects of your return on investment and enable you to take your first step towards partnering with an OKR software.
Once you have secured leadership buy-in, the next is following a process driven approach to choose the right OKR software. You need to make sure that the OKR software you choose is a perfect fit for not only your current needs, but can also help you in the future.
OKR Software: A Guide To Choosing The Best One: This article can help you make an informed choice. Explore its different sections to understand:
- The 8 critical steps for making an informed choice like clarity of goals, team size, integrations, required features, budget, etc.
- The 4 questions that you must ask for each OKR software you take into consideration, especially around scale, OKR tracking etc.
Now that you have a broad understanding of what are the factors you should keep in mind while choosing your OKR software, you need to start exploring the market for the options available.
11 Best OKR Software You Need to Know About (2022 Edition): This is a curated list to help you get a detailed analysis of some of the best OKR software available for you and give you a view of what features you should not miss. Check out this article to:
- Understand which are the top OKR software available and key information about them including which team size they are ideal for, key features, pros and cons, whether or not they offer a free trial and pricing
- Navigate through a list of OKR software curated especially from a startup lens enlisting OKR software which are most ideal choices for rapidly growing organizations
- Explore the key considerations you must keep in mind when comparing between different alternatives
OKR best practices
To aid you in effectively using OKRs, we have curates a list of OKR best practices that you should always keep in mind:
1. OKRs should be agile
The purpose of agile OKRs is to enable team members to work on projects that make the most impact to the business in that week and pivot at a moment’s notice without additional loss of resources. Thus, giving organizations the opportunity to quickly respond to internal and external changes and adapt their processes faster.
Intel contributes their microprocessor win against Motorola to the OKR based model of strategy execution
OKRs and Agility: Check out this article to understand how OKRs facilitate business agility by ensuring that goals are set periodically and not annually, with a focus on real time grading and feedback which makes rearranging priorities more accessible during uncertainty and ambiguity.
2. OKRs should be simple
OKRs should be simple, not easy. They should be a stretch to an individual or a team’s ability, but they should not be too complicated to understand and should focus on simplifying organizational visions into understandable action steps.
3. OKRs should be transparent and collaborative
OKRs are for creating alignment on an organization level. For most companies, everyone’s OKRs are accessible to everyone else’s. Thus, making the achievement of goals a clear, transparent, collaborative process.
4. Nested cadence
The OKR framework is so compelling to organizations because it carefully combines all levels of business needs. It addresses long-term top level strategic business goals with short-term quarterly team / departmental goals. Thus, OKRs ensure that at any point in time, all organizational effort and resources are aligned toward a specific vision.
5. OKRs are bi-directional
It requires top-down and bottom-up collaboration across leadership, managers and team members. Thus, the OKR framework also utilizes 360 degree feedback. Typically, around 60% of OKRs are set in unison with managers in a bottom-up approach.
6. OKRs are aspirational
OKRs are designed to stretch individual abilities to an extent where higher than expected performance is the norm while keeping in mind that overly aggressive goals might lead to frustration and fear of failure.
“If you’re achieving all your goals, you’re not setting them aggressively enough.”- Eric Schmidt
7. OKRs should only be reserved for high value goals
Every OKR should directly add value to business results. Choose OKRs that provide real tangible value to the business. If a team can achieve 100% of their assigned OKRs without using the entire team’s bandwidth fully, make sure to raise the bar.
8. Separate OKRs from compensation
As OKRs are aspirational, it is important to use OKRs as a management tool and not as an employee evaluation tool. Instead of financial rewards driving performance, let the aspiration and autonomy behind OKRs drive intrinsic motivation that pushes employees to take risks and reach for high performance.
Bonus Tip: How to avoid OKR mistakes
15 Common OKR Mistakes & How to Fix Them: Check out this article to understand which OKR mistakes you are vulnerable to and how you can anticipate or fix them to ensure maximum impact for your organization. You can leverage the quick hacks to ensure that you avoid the common pitfalls seamless in your OKR journey.
Benefits of OKRs
The benefits of setting clear, specific OKRs is manifold. Right OKRs can supercharge the performance of an organization within a short period of time by optimizing operational inputs. Here are some of the time-tested benefits of OKRs —
“By clearing the line of sight to everyone’s objectives, OKRs expose redundant efforts and save time and money.”
1. OKRs create accountability
OKRs are always verifiable. It is a transparent way of announcing what everyone in a department or organization is working on, thereby creating accountability.
2. OKRs help overcome communication barriers
OKRs aid in clear communication by letting employees know what is expected of them in a given period of time, while also communicating what’s not important.
3. OKRs align goals with purpose
OKRs connect individual efforts with departmental and team goals which is further connected to organizational vision by another set of OKRs.
4. OKRs accelerate growth
When employees have clarity about their roles, assignment, and purpose, and are willing to take risks, set audacious goals, and perform at a higher level, the business thrives.
5. OKRs influence culture
OKRs transform output-based culture into outcome-based culture, leading to a culture of accountability, focus, and continuous feedback and builds a highly engaged workforce.
OKR email course
With SuperBeings, 10 days are all you need to get started with your OKR journey and master it too. This 10 day OKR email course will ensure that you receive one email every day on different aspects of OKRs. This is your direct access to highly curated and exclusive resources to set, align and achieve OKRs like never before. It will help you streamline your efforts in a process driven manner, enabling you to take one step at a time and ensuring that you set OKRs for success. Moreover, it’s completely free! 🙂
OKR advanced guide (PDF)
Once you have a basic understanding of how OKRs work and get started with them in your organization, you may want to take the next step and deepen your OKR strategy. That’s when you will need an Advanced Guide to OKRs.
The OKR advanced guide talks about diverse themes focusing on setting OKRs for success, discusses the nuances of implementing them effectively, grading them strategically and how it influences your performance management process and culture.
“Healthy culture and structured goal setting are interdependent.”
How to use OKRs for impactful culture
OKRs have an impact on organizations beyond the bottom line and achievement of business objectives, they directly help create a thriving and impactful culture. Explore this article to understand how you can use OKRs to create an impactful culture. This article will help you uncover the various facets of this topic, including:
- How OKRs lead to a spirit of collective goal setting and brainstorming
- The impact of OKRs in facilitating transparency by making goals clear along with assigning accountability for each OKR
- How OKRs help create a culture of check-ins and processes with their cadence driven approach
- The way OKRs help create a purpose driven organization by helping employee align their goals with company goals
- How OKRs result in a culture of autonomy which gives employees the freedom to take risks, and aspire high, without apprehensions
Why do you need an OKR master
Like any other department or priority in the organization, you need someone who can take charge of the entire OKR movement. Our article illustrates why you need an OKR master to truly unlock the potential of this goal setting framework. It talks about how without an OKR master, you will find it challenging to bring all your OKR efforts together and follow through with diverse stakeholders in the organization. An OKR master will help:
- Introduce OKRs to your organization and help everyone understand the need to adopt them
- Managers and team members use OKRs in an effective and efficient manner and prevent them from setting OKRs which are too many, too difficult or too easy
- Attain accountability and ensure that everyone responsible for OKRs is tracked in real time to monitor progress and provide support
- Employees deal with blockers and enablers and guide them in their OKR journey in case they are stuck/ need additional resources
- Facilitate regular OKR training to keep your employees up the curve and finally, ensure that your OKRs are being completed and not being left hanging in the middle
Flexible, simple, all-in-one OKR tool
SuperBeings OKR tool is all you need if you are getting started or are in the process of accelerating your OKR journey. With this tool, growing organizations like yours can build greater visibility into OKRs across the organization as well as enable real time insights into OKR progress to resolve issues.
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SuperBeings helps you automate reports, check-ins so you can spend your time achieving results. That’s not all, your managers can receive OKR coaching to implement right OKRs and sync OKRs with 1:1s. Check out SuperBeings OKR tool to align individual performance with business goals.
Want to see in action what you read? Book a free demo with one of our OKR experts today. No credit card required.
Goal Setting and OKR FAQs
#1 Are OKRs the same as KPIs?
Often, organizations starting their OKR journey get confused between OKRs and KPIs. While used interchangeably by some, it is important to understand that there are critical differences between them, and they often work together rather than replacing each other. On the face of it, OKR is more of a goal-setting framework which helps organizations determine what needs to be done and how, while KPIs are focused on performance evaluation while everyone strives to achieve those goals. Also, KPIs are sustainable over time and don’t change on a regular basis, whereas OKRs often have a short life and keep transforming regularly.
OKR vs KPI: The Difference and How They Can Work Together: Check out this quick read to understand the key differences between the two and how you can use them together for better results.
#2 What is the difference between SMART goals and OKRs?
SMART goals are defined as Specific, Measurable, Achievable, Relevant, and Time-bound goals.
First, The primary difference between SMART goals and OKRs is that the principles of SMART goals only allow to craft the chief objective. They provide the answer to “what should we aim for?”. Whereas, OKRs, on the other hand, give clear and specific directions on where and how to allocate resources to make sure the primary objective gets done on time. OKRs provide the answer to “what should we aim for and how do we get there?”.
Secondly, SMART goals are best for setting individual or the primary organizational goal. While working on day-to-day tasks, employees often lose sight of the bigger picture to understand how their work connects to the bigger purpose. Objective and Key Results framework prevent this by strategically connecting individual and the overarching organizational goal with team and departmental goals. Thus, OKRs help employees to work together in alignment with business strategy at all moments.
Third, SMART goals do not provide a roadmap for continuously tracking progress or the lack of it. OKRs are more insightful to measure performance and build accountability.
Instead of choosing one or the other, always set OKRs and make them SMART.
#3 Should individuals have OKRs or just up to teams?
While goal setting and management is important at all levels, OKRs are most effective when they are set at the team level. There are several reasons for this.
First, if employees start setting their OKRs, it eventually becomes a list of the tasks they seek to perform and not the overarching objectives and key results.
Second, OKRs are meant to be achieved together with collaborative work. However, if individual OKRs are set, each one will focus on their key results, which can seldom be achieved in silos.
For instance, if a key result is to increase customer lifetime value by 15%, it is a shared result, which one employee cannot achieve.
Therefore, it is best to set OKRs for teams, which can be cascaded down to individual employees as KPIs based on their strengths and competencies
Wrapping Up
Objectives and Key Results are critical for organizations to clearly distinguish between strategy, tactics, and operations. OKRs help organizations to stay grounded in reality while shooting for the moon, to plan for the future while staying focused on immediate goals. Setting OKRs requires careful planning but it takes far less time to do so than traditional goal-setting methods.
Don’t treat OKRs like new year resolutions that you set once and then forget. Keep following it up with all team members at regular intervals and make sure that resources are being used for the right things at the right time.
