Dive into the effective implementation and use of objectives and key results

This thorough guide will help you decide whether to use objectives and key results (OKRs), and will teach you to do so effectively. OKR gurus Paul Niven and Ben Lamorte provide details, definitions and examples, as well as the types of objectives, the right number of key results, how to score and grade your progress, when to meet and how often, and even what features to seek in OKR software.

Almost 200 pages about OKR may seem like a stretch, but those who must lead an OKR initiative, especially novices, will value this substantive guidance.

Objectives and Key Result - Driving Focus, Alignment, and Engagement with OKRs (Wiley Corporate F&A) by Paul R. Niven and Ben Lamorte
Objectives and Key Result – Driving Focus, Alignment, and Engagement with OKRs (Wiley Corporate F&A) by Paul R. Niven and Ben Lamorte

Take-Aways

  • Objectives and key results (OKRs) have spread throughout a significant part of the technology sector and now make inroads across industries.
  • Objectives describe what you want to do. Key results tell you whether you did it.
  • OKRs give employees a common language, knowledge of what’s important in the organization and shared purpose.
  • Before starting with OKRs, know precisely why you want to use them.
  • Every OKR initiative requires a committed, determined executive sponsor, and alignment up, down and across the firm.
  • Develop and deliver OKR education and training.
  • Create OKRs, starting with objectives. Objectives deliver incremental business value; they inspire collaboration and greater effort.
  • Create two to five measurable key results for each objective.
  • Track progress against your OKRs.
  • License an OKR software to help manage the process.
  • OKR goes on indefinitely and becomes a part of your culture.

Summary

Objectives and key results (OKRs) have spread throughout a significant part of the technology sector and now make inroads across industries.

When Google adopted the objectives and key results (OKR) approach to goal setting and performance management in the 1990s, it heralded a resurgence of a technique first employed by Intel and evangelized by Silicon Valley financier and Google investor John Doerr.

“OKRs is a critical thinking framework and ongoing discipline that seeks to ensure employees work together, focusing their efforts to make measurable contributions that drive the company forward.”

An executive who first learns about OKRs in the morning can use them by afternoon. OKRs support project-style execution – for example, when teams form and disband around a project’s lifespan.

Objectives describe what you want to do. Key results tell you whether you did it.
OKRs consist of objectives and key results. Describe your objectives qualitatively – what you want to achieve. Write your key results so you can measure them. A worthy objective might read as follows: “Design a compelling website that attracts people.” Corresponding key results might include details such as “20% of visitors return to the site in one week” and “10% of our visitors inquire about our training and consulting services.”

“Before embarking on this journey, you must determine why OKRs are right for you at this moment in your history.”

Objectives should be difficult, but achievable. They should align up and down the organization and bring teams and individuals together around shared goals and the firm’s priorities. Each OKR derives from organizational strategy and corporate objectives. Avoid top-down-only objectives; employees must participate. Review and update your OKRs quarterly.

OKRs give employees a common language, knowledge of what’s important in the organization and shared purpose.
OKRs encourage employees to work in unison and across organizational silos toward accomplishing goals. Their inherent transparency gives employees visibility across the organization and opportunities for lateral and upward movement. These factors lift employee commitment and engagement. Firms with OKRs tend to perform better than those without.

Before starting with OKRs, know precisely why you want to use them.
Determine how OKRs fit with your other performance management tools and processes, and how OKRs will replace them. Perhaps, as in most companies, you use performance tools and goals that few people understand and almost everyone dislikes. Simplify and streamline through OKRs.

Every OKR initiative requires a committed, determined executive sponsor and alignment up, down and across the firm.
Your OKR initiative must have support from the top. Link OKRs to one or more of the top bosses’ priorities, and involve them in implementation. Implement slowly at the company level first, starting with executive priorities and the firm’s goals. Move to divisions, teams and, finally, individuals, aligning OKRs as you go.

“One thing all companies that have achieved success in implementing a change program of any kind have in common is…a sponsoring executive who feels truly passionate about, and committed to, the endeavor.”

The process might take months or even more than a year. Link the use of OKRs to your corporate strategy, vision and mission – the company’s purpose. Envision a linked, interdependent pyramid with the firm’s mission on top, with supporting layers for vision, strategy, objectives and, at the bottom, key results. Your OKRs must never contradict your corporate mission, nor the subordinate missions of business divisions and teams. Mission guides the development of every OKR.

“OKRs…should be ingrained in your culture, and ultimately become part of the way you do business on an ongoing basis.”

Your corporate vision extends from your mission. Unlike the mission, which never ends, aim to achieve an aspirational but doable vision within a decade or so – for example, doubling the size of your company. OKRs become the steps and building blocks toward reaching your vision. To ensure alignment, practice continuous communication and repetition so every employee knows the organization’s mission, vision and strategy and its OKRs.

“Objectives are always qualitative, representing a desired action, while key results are necessarily quantitative so that we can apply numbers to confidently determine whether or not we’ve met the objective.”

Link each OKR to corporate strategy. Determine your strategy from what drives your company, what you sell, your customers and how you sell. Align your OKRs to that strategy.

Develop and deliver OKR education and training.
Train and educate leaders and employees to understand how and why OKRs work, and how to develop, assess, score and track them. Create top-level, corporate OKRs. Gather employee input on corporate objectives. Form a small team to draft the OKRs. With your first OKRs in hand, present them company-wide, then monitor and report on them quarterly.

“Employees today crave knowledge of what is most important so that they might align their actions toward those goals, which results in greatly enhanced meaning at work.”

Every employee must know your corporate-level OKRs because they form the foundation around which all other OKRs align and connect. Don’t use a KR from a higher-level OKR to form a lower-level objective. Aim for “loose couplings” between OKRs. Ensure vertical and horizontal alignment of OKRs by running half-to-full-day meetings in which teams discuss their OKRs in the context of corporate OKRs and other teams’ OKRs. Afterward, ensure vertical and horizontal alignment of OKRs.

Create OKRs, starting with objectives. Objectives deliver incremental business value; they inspire collaboration and greater effort.
Keep objectives concise, and use simple language. Frame them in positive terms – for example, say that people should eat healthfully instead of saying they should avoid fast food. Make every objective an action, not a label – for example, “increase customer loyalty,” not “customer loyalty.” Make OKRs sufficiently difficult so that only focused, combined effort can accomplish them. Keep them achievable within one quarter. Keep each OKR within the control of the team accountable for it.

Create two to five measurable key results for each objective.
Schedule a full-day workshop. Divide the objectives among teams of two. Have them draft corresponding KRs and present them to the larger group. Have teams refine the KRs based on feedback. Seek ideas and remain open. After the workshop, each team of two should present their KRs to other parts of the organization to ensure alignment and win support. Don’t expect consensus company-wide, but demand support for the firm’s final KRs.

“OKRs must lead you to the achievement of your vision…and be consistent with your mission.”

Keep KRs concise, clear and positive. Use specific and unambiguous language to ascertain whether you meet the objective. Ensure that a person or team owns the result. Craft KRs so people can see and feel progress toward achieving them. Key results should align vertically with KRs above and below, and should align horizontally to complement (and not duplicate or detract from) work on other teams. Think through each result to uncover potential unintended consequences affecting other efforts within the firm. Don’t confuse results with tasks or to-do lists. “Meet with the new VP of Sales” doesn’t work as a key result. “Add 25 qualified opportunities to the pipeline” does.

“Ensuring your people are aligned around a common purpose is job number one for any multinational corporation, regional government, local nonprofit or neighborhood lemonade stand.”

To assess whether a team has met its objectives, convert everything to numbers in accounting for your results. This is sometimes difficult. For example, you might have an objective to expand a new software release to multiple countries in the third quarter. But you might not have a good idea of what can you achieve in a quarter. That calls for assessing KRs on a measurable scale. For example, you can award a score that accumulates with each country you add. This approach can work for any OKR.

Track progress against your OKRs.
Conduct short meetings each Monday to gauge your progress on your OKRs and to uncover barriers. Everyone should communicate weekly priorities, progress to date and confidence levels. Team leaders can use the results to make adjustments, provide inspiration, shift resources or provide help. Use mid-quarter reviews to dive into estimated progress and confidence levels. Assign a confidence score: Aim for achieving a 1.0, and make adjustments accordingly. Gradually, teams should average about a 0.7 on achieving key results and meeting objectives.

“If you try to create a robust set of OKRs without the benefit of a widely communicated and understood strategy in place, you can be certain of drifting off course.”

In rare cases, you might change or eliminate an OKR at the mid-quarter review, because your business changed in a fundamental way. Make adjustments and reset priorities for the remaining six weeks of the quarterly cycle.

At the end of the quarter, assess progress against objectives and discuss the previous quarter’s work. Assign scores for your achievements. Replace OKRs that you achieve with new OKRs.

“At the point you’ve become utterly weary, bordering on ill, from communicating the how and why of your corporate OKRs, that’s when you might just be getting the message across.”

Where you have unsatisfactory results, ask “five whys.” This involves asking a new why question through five iterations to get to the root of the problem. For example: Q1: “Why didn’t the software contain a key functionality?” A: Because a server crashed. Q2: “Why did the server crash?” And so on.

Once you understand root causes, reset KRs for important but unachieved objectives. Add them to the next quarter’s OKRs. Schedule your meetings, especially quarterly meetings, in advance. When you don’t, your OKR initiative can disintegrate rapidly.

License OKR software to help you manage the process.
If your firm has fewer than 100 employees, a spreadsheet or free tool such as Google Docs might suffice. Otherwise, license software after the first several months of your initiative. Look for software that supports the up-and-down (two-way) vertical and horizontal flow of OKRs, and that allows you to review their alignment. Look for mobile-friendly software, including OKR scoring support, dashboards for reviewing progress, a draft mode for unpublished OKRs, a single sign-on and gamification tools. Your solution should integrate with your other platforms, offer historical record keeping, and provide analysis and reporting tools, plus vendor support.

Whether you use a spreadsheet or a sophisticated platform, select a small number of purposeful OKRs that align with strategy, vision and mission.

OKR goes on indefinitely and becomes a part of your culture.
Assign a senior-level OKR champion to whom people can turn for support, inspiration and answers. Where you will put OKRs in the organization (HR, finance, operations, and so on)? Don’t allow anyone to dismiss OKRs as an HR project or something finance forced upon them. Leaders and employees must perceive it as a key corporate priority. If need be, consider hiring highly qualified consultants to help you through this process. Avoid linking OKRs with performance reviews or pay raises. Otherwise, people will set only those goals they know they can achieve. Employees may be less likely to collaborate if they know a bonus or raise depends on achieving their OKRs.

About the Authors

OKR experts Paul Niven and Ben Lamorte consult, train and coach on OKRs worldwide from their base in California.