Here’s all you need to know about Objectives and Key Results.
The past few years have seen a heightened interest around OKRs. This highly effective framework is enticing Executives globally, to align their teams to business outcomes.
While many define OKRs as a strategy execution framework, which it certainly is, OKRs is a critical thinking framework that gets teams to think about their most important business metrics. OKRs are cherry picked as shared commitments by teams and not in silos.
So, it’s not surprising that companies are stepping forward to use OKRs, to supercharge growth, drive change, innovate or excel in a manner that every employee in the company knows how they contribute.
More than 80% of Silicon Valley startups have adopted OKRs and experienced a meteoric rise in their growth, by just being thoughtful about the metrics they measure.
While so much is written about OKRs everywhere, not to mention the success stories of Google, LinkedIn, Twitter, many companies still don’t seem to get it right. This could be attributed to their lack of understanding of OKRs or could also be the inertia of stepping out of their comfort zones around traditional performance practices.
Companies who are considering OKRs are always curious about 'What can OKRs actually do for us!
By implementing OKRs, companies experience four benefits. Alignment, Ownership, Discipline and Transparency. We call it the superpowers of OKRs.
When all employees and teams across the organization can connect their activities to larger organization outcomes, and when they know how their tasks contribute to the progress of organizational OKRs. That's when you would have all rowing in the same direction.
Alignment is the secret sauce in OKRs. OKRs are vertically and bi-directionally or cross functionally aligned. Alignment also calls out the allegiance each team has to another, and which Key Results need to be achieved to help move another KR within the organization.
With OKRs, leadership styles move from telling and directing to exploratory and participative. This is where you shift gears from ‘hand-me-down’ to ‘connect and align.’ Having alignment not just within teams, but within the entire organization, is what makes OKRs such an amazing framework.
Alignment also brings out the best in the CFR (conversations, feedback and recognition) systems. OKRs and CFRs go hand-in-hand, and CFRs act as the backbone to a solid OKR implementation
OKRs are best set as teams or squads, not by team managers or leadership (although the leadership does get involved in the review process while setting OKRs). Team members can execute projects in their own style, while making contributions that are meaningful to them and that connect them to the organization.
OKRs are achieved on two principles: ownership and commitment.
When there is one clear owner for each Key Result, Milestone or action, that is when OKRs are successful. An owner should be accountable for each KR/milestone and drive the rest of the team towards progress.
Although there is only one owner, committing to OKRs as a team is the best way to diminish fear as teams should be able to push and inspire each other. For instance, if a company is looking to reduce customer churn from 20% to 8%, team members from Product, Engineering, Customer Success can join forces to set an OKR to tame that churn! Each Key Result and initiative that moves the metric forward, would have an owner within the squad or seek help from someone within the organization.
OKRs need regularity and rhythm in order to help teams execute strategy with agility. The typical OKR cycle needs discipline around defining/crafting OKRs, having regular check-ins within teams and with leadership. This regularity and discipline sets the muscle and rhythm for teams to achieve their strategy with speed and rigor.
Weekly OKR Check-in meetings are one of the most important OKR rituals to motivate teams to keep making progress after the initial high of writing OKRs has passed. Check-In meetings are to OKRs, what multiple reps are to building a strong muscle. For continued success with OKRs, teams should get together weekly to discuss the task outcomes, KR progress, review their methods, and discuss plans for the next week. This sets the focus on achieving outcomes at all times.
A solid company culture is a result of communication, collaboration and accountability; none of these can be achieved without transparency. OKRs are set in teams and not privately by individuals to ensure this state of transparency throughout the organization. Another way to keep things transparent yet focused is through CFRs (conversations, feedback and recognition).
By sharing OKRs and bi-directionally aligning them across teams, the public commitment drives a huge sense of accountability.
OKRs is an acronym for Objectives and Key Results.
Objectives tell you “What do we need to achieve?”
Objective statements start with a Verb + What would you like to accomplish + Business Value
Key Results focus on the “How do we measure success?”
Key Results Start with a Verb + Metric to be measured and improved + movement from X to Y
Tasks/Initiatives which is “What do we need to do to get there? The Verbs in OKRs are important, as everything about OKRs is about moving the organization through actions!
Objectives are “The Big Why/ The Big Idea”, in short it is the propeller for your company to shift out of the existence mode into the competitive mode. Objective statements help teams think about the most important lever they need to pull, to move the company forward.
Interestingly, Objectives are emotive, have words and no numbers!
Objective statements have words, not numbers. They need to be qualitative and inspire your teams to a higher level of performance.
An Objective should be framed such that it is attainable in a quarter. Your team should also be able to control its achievement. Most times, teams mix Objectives with long term strategy statements. They are best when articulated as smaller, achievable goals for teams to work towards.
We cannot tell you how important this is! When cherry-picking an Objective, ask yourself, "Will selecting this Objective help move my business forward?”
The litmus test of a great OKR is that none get left out. Objectives should be such that every team in the company has the ability to connect and align.
Let’s take the example of a company that connects Interns to Corporates.
One of their strategic themes is to grow revenues and their new offering is around virtual internship on-boarding.
The big Objective example, for the quarter could be:
O: “Implement Intern onboarding & placement strategy to drive revenues.”
This is simple, clear, and calls out the business value.
Key Results are where quantification steps in. Everything inspiring and aspirational in the Objectives needs to be quantifiable and that’s what you do with Key Results.
Ask yourself some critical questions:
Key Results need to have measurable outcomes.
Let’s take the same example of the company that connects interns to corporates.
Here’s how the KRs would look.
Objective: “Implement Intern onboarding & placement strategy to drive revenues.”
KR 1: Increase intern sign ups from 50000 to 100000 in a specific geography
KR 2: Increase intern placement from 65% to 80%
KR3: Launch our learning academy
KR4: Increase revenues from USD 1.2 Million to USD 1.8 Million
While choosing KRs, select a mix of lead and lag indicators. For instance, DropBox used a lead indicator of measuring feature usage instead of sign ups.
The more lead indicators you select, the more you can control your business outcomes, earlier on in the process.
Tasks/ activities are important, but alone cannot move the company forward. With OKRs, teams make very mindful choices on tasks, linking it to outcome metrics.
Task 1: Fix the website CTA buttons
Task 2: Write 5 blogs
Task 3: Call 15 prospects a day
Task 4: Send welcome mailers to new joiners
Task 5: Clear contracts within 24 hours Are all means to end.
When teams set Tasks linked to Key Results, they make better choices on what are those experiments that can move a metric forward.
Tasks are the daily to-do’s. They are the inputs which move an outcome forward.
Key Results are the outcome metrics, that are carefully selected, to move the business forward.
Let's take an example.
Let's say, we would like to ‘Increase diversity of intern sign ups from 20% to 55%’ , this is a Key Result. It’s a metric we would like to measure and improve over the next 90 days.
To move the metric forward, we would need to do a bunch of activities.
The eye on the prize is the Key Result, and the activities are the means to get there.
OKRs focus on changing the business and KPIs are essential for running the business.
While KPIs are good for measuring performance, OKRs can give you much more. KPIs ensure maintenance of steady growth against benchmarks. But if you’re looking for rapid growth for your entire business, your teams need to align their goals for the overall performance of the organization. The moon shines, and now is the time - to shift your focus from measuring activities to reporting progress against outcomes.
KPIs mostly anchor around Lag Indicators; whereas OKRs encourage teams to pick Lead indicators for business. Lead indicators can be tracked and improved during the course of a month or quarter and impact the lag indicators which are post factor.
There are no limits to the number of KPIs you can assign to your teams, making it difficult for them to keep track of their overall performance. In contrast, OKRs follow a set 3x5 focus on key metrics. OKRs focus on the vital few rather than the trivial many.
Business leaders face obstacles in getting all the reports together. On the other hand, OKRs have it all handled, teams report progress in the same format.
While setting OKRs, teams ask themselves ‘Are there any KPIs blinking red, and if corrected can drive business velocity?’ If the answer is yes, it’s good to consider crafting an OKR.
Alignment is the secret sauce of a successful OKRs roll out. There are two kinds of alignments - vertical and bi-directional alignment. When teams align vertically, they could either contribute directly to the company Key Result progress or can influence the key result significantly.
Let’s take the same example of the organization connecting interns to corporates. Team Mighty Marketing would step forward and call out the Key Result that they can align or influence the most.
They select the “Key Result 1: Increase intern sign ups from 50000 to 100000 in a specific geography”. The Team steps forward and call themselves the Mighty Marketing team.
The team then thinks very intently about, what is the most important thing they must accomplish in the next 90 days, to move the needle on the business. They zone in on content as a strategy to increase intern sign ups.
Team Name: Mighty Marketing
Objective: Focus on content marketing strategies to increase intern sign ups
KR 1: Increase Facebook and Instagram followers from 3200 to 10000
KR 2: Increase CTR for our lead magnets from 2.1% to 5%
KR 3: Increase intern attendance at our events from 500 to 1500 per event
KR 4: Increase sign ups through referral campaign from 20% to 44%
In the example above, Team Mighty Marketing would call out help from Engineering for a task alignment. For instance, ‘support email automation or build a feature’ that would support their Key Result.
Bi-directional alignment is imperative for a successful OKR implementation. Align around Outcomes not structures! While setting Team OKRs, consider who it is that your team relies on most for coordination and assistance within the organization to achieve your OKRs and, conversely, who relies upon and coordinates most with your team.
• Which other team should contribute to this KR?
• Have they taken an adjacent KR?
• What would be the dependency on the KR achievement? Eg: Product Launch and Marketing KRs are cross aligned/Sales (new business) and MQL generation are cross aligned KRs.
While OKRs are not a magic bullet, if implemented right, they can supercharge your business to 10X growth. Interestingly, 60% of OKRs roll outs don’t make the cut, owing to common mistakes or traps that can be avoided.
In the bestseller “Measure What Matters” John Doerr speaks about how OKRs should not be about every task at hand. The tasks could be the many steps in achieving the OKRs but not the OKRs themselves. As mentioned in Google Re:Work: Use OKRs to define the outcomes the team wants to see and let the teams come up with the methods of achieving that impact. “Goals are not tasks, never mistake activity for results — John Wooden”.
That sounds like Set, Forget & Hit the Panic button!
Real-time check-ins are the way to go. Managers who do regular OKR check-ins are more likely to be on top of team performance, check alignment to the company objectives and key results, and coach teams. Check out our OKR series on Coaching conversations & building a check-in culture here.
That’s right, the term key results imply they need to be measured but are you measuring it correctly? What are the indices and benchmarks you use to define the metrics around the key results?
“Increase customer retention by10%, seems fuzzy. Make it specific with something like "Increase free trial sign ups from 20 to 50 per month” — this increases clarity and precision to the result that needs to be achieved.
The very fact that OKRs are set quarterly makes it a highly agile framework. Instead of holding onto KRs which are not achieving outcomes, course correct and pick the right measures. In other words, move beyond the process of setting to measuring outcomes. Key Results that do not move the business needle, or are hard to measure, would be most reset during the quarter.
If your response is any of the above, OKRs is definitely not for your organization.
Rolling out OKRs requires discipline to build the muscle. The first step to getting started is understanding if your company is ready for OKRs.
Here's a 10-point checklist to run through, before you bring OKRs into your fold.
The need for OKRs stems from some clearly identified pain. The pain could be different depending upon the company, business model, culture, market, and more. Some organizations introduce OKRs to pivot to new business realities, others look at OKRs to break silos to innovate, and some introduce OKRs to ‘get to the next stage of their growth aspirations.’
Remember that OKRs is about ‘change’ and a cultural shift. Communication is a key part of Change Management. If there is a clearly identified pain, the CXO message would need to call out the pain and explain to teams exactly ‘Why OKRs, and Why now!’
An executive sponsor is the key to introducing OKRs, as it is not a program but a new way of working that requires teams to collaborate. CEOs, Chief of Staff, Strategy Leaders, and Business Unit leaders (if you are considering OKRs for a specific unit) are great sponsors of OKRs.
If you have top-down OKRs and thrust on teams in the classic way of the cascade method, you would be sure that OKRs may have the wisdom of only a section of the organization. The magic of OKRs is when teams deeply reflect on the strategic metrics that they can influence, and come together to write and execute OKRs that move a company's Key Result(s) forward. Bottom-up and top-down is where the river meets the road for a great OKRs roll out.
Internal OKRs Champions are the heartbeat of an OKRs rollout. They would be overseeing the introduction, setting, and most importantly, managing by OKRs. The Champion is usually certified on OKRs and has the tools and techniques to coach teams on how to write high-quality OKRs which are well connected and aligned. This individual is usually someone who has been with the organization for at least a year, has a great view of the business, and can influence stakeholders.
Traditional performance reviews assess individuals on tasks and KPIs. In contrast, OKRs are a fundamental shift from ‘Me’ to ‘We.’ They are best written when teams come together to move a strategic business metric. Training would be required for leadership and next-level teams on the fundamentals of OKRs:
OKRs do not need to be ‘another meeting’ added to your To-do. They need not stretch your bandwidth, either. It should be the meeting that defines how you work together. Combining OKR meets with your weekly ones alongside changing how you facilitate the meeting helps teams speak through business outcomes.
A committed executive sponsor’s role can make an OKR rollout highly successful. The sponsor is the chair of the OKR reviews. Additionally, sponsors remove blockers and coach teams to think about what metrics to focus on during mid-quarter reviews to move the needle. Learn about the value of good sponsorship and how sponsors are the jumping-off point of a dive into OKRs.
Looping back to the point that OKRs is definitely not something to set and forget! They are managed week-on-week and reset by teams at the end of 90 days. So, if you are considering taking a bunch of metrics and dividing them into 4 quarters, think again! Teams should have a bunch of new metrics linked to Objectives, which they would want to achieve and improve quarter on quarter. Making them static takes the pizzaz out of OKRs. Read more about the relationship between Agile and OKRs.
Organizations that deeply reflect, learn, and course correct, have a high chance of sustaining OKRs. They look at OKRs as not another chore, but simply as the way that business is done. That’s why Google says “It's just the way we do business around here.”
OKRs are definitely not a set and forget. It requires a suite of rituals to keep it going. There are three kinds of rituals which are core to an OKR roll out.
Weekly Check Ins - These are recurring meetings, same day , same time. Check Ins are for 30 minutes, keeping the team stay on course.
Here are 4 best practices to organize weekly check in meetings.
Team OKR Champions are like the Coxswain in rowing. They get the group together during check-in meetings, spot if the team is steering in the right direction, and call out KRs at risk early. OKR Champions also are the leaders of tomorrow, learning end to end of the business.
Check-in meetings are the heartbeat of a great OKR roll out. Visualize your entire company going over OKR progress, week on week and updating progress. Not whenever they wish, but a day of the week when everyone calls out OKRs. Just as they say in Google ‘OKRs are just how we do business’.
In OKRs, one is looking at progress, and eliminating constraints early, should they arise. OKR Check-in meetings when done week on week require data to be updated on progress.
Asking a few powerful questions would be important to get teams thinking about outcomes rather than inputs.
Remember to update these on your new OKR Check-Ins Template.
Making OKR meetings fun is a game-changer to get teams enthused. Here are some OKR Games highly recommended by Team OKR Champions:
People Bingo: Get some fun facts about your team members. Place a clue, and have the rest guess who that is! That’s the team member who goes next with the OKR updates. People come up with all kinds of fun clues in People Bingo ‘I can do a headstand for 5 whole minutes’ or ‘The one who has 5 cats and a dog’.
The OKR Jeopardy Game: This is a good game to get new members to create a jeopardy game board (you can get some free sites to create these boards). Divide the team into groups, and shoot away those questions. Oh! Don’t forget to get those fun gifts, even if they are gift cards or virtual points.
Reviews are conducted either Bi-Monthly or Monthly. During Leadership reviews, each Team Champion presents progress on the team OKRs, and how they are moving the company forward. Leadership reviews are best chaired by the OKRs Sponsor. The intent of the reviews is to:
Leadership reviews are also a great forum to course correct, and make any adjustments to OKRs.
An OKR Retro Reboot meeting is a significant OKR ritual that happens at the end of every quarter. Teams and leadership get together to discuss their progress and learnings of the entire quarter to better strategize for the next quarter.
Teams get together with their learnings and insights to reflect on what went well and how it can be made better during the next quarter. This is the time to analyze results, celebrate success, and celebrate failure! As teams share learnings on prioritization and challenges and update their overall progress, the organization gets an understanding of the vision for the next quarter. This helps reset OKRs for the next quarter.
The internal OKR Champion is someone nominated by the sponsor of an OKR Roll out (usually the CEO), to introduce the concept of OKRs to the organization and work closely with teams to adopt them. Such Champions are generally certified and come with a wealth of OKR implementation knowledge. Ask a Googler about OKRs, and most often you will hear ‘That’s just how we do business around here’.
Historically, the challenge with any Strategy and Goal Management frameworks is the problem of starting it, following it, and then conveniently forgetting it, even worse arm twisting it to suit company culture, market dynamics and cut copy paste methodologies. Due to this problem, management teams, business leaders, and most importantly company employees lose faith and interest in any new frameworks and methodologies.
Internal OKRs champions bridge this gap. Here are 13 points as part of an OKR champions role description.
Your OKR Champion leads the OKR adoption program (Simple!) Getting started is always difficult. You are forced to think about questions such as:
Your OKR champion will answer starter queries like the ones above and many others.
OKR champions serve as in-house subject matter experts for OKRs (read books, articles, attend webinars, liaise with OKR consultants).
When teams need a bouncing board to check on the ‘Quality’ of the OKRs crafted, they can always rely on their OKR champions.
Champions define the repeatable process for collecting, sharing, and leveraging OKRs. They track the progress against success criteria.
Your Champion tracks progress against the program plan. If you don’t have a person tracking this progress, your teams might just lose track of the program amidst all their daily task lists.
A champion acts as the expert on the OKR Software and keeps them going to track and manage OKR adoption. Forget all the ticket raising and back and forth communication with the software providers. Your OKR champion acts as the Point of Contact (POC) between the company and the software providers to make sure everything on the software is green signaled. This is because he/she knows the ins and outs of the entire OKR software.
The Champion is like the cheerleader, keeping teams on track, and cheering them on. It's very easy to highlight missed tasks and progress not made. Nonetheless, you always need a cheerleader to celebrate even the smallest wins and encourage progress. Who better than your champions to carry on this tradition?
OKR champions are like navigators! Booyah! They tell you exactly how the OKR rollout is going and keep your SaaS company Strategy Maps on course.
Champions make leadership reviews interesting, and data-driven. An OKR report on progress can give a 10-second picture of the health of your business.
Champions provide input to executives on potential OKRs linkages to people practices. E.g.: to conversations and appreciation programs.
They ensure the initial alignment of OKRs. Much of the secret sauce in OKRs is about bi-directional alignment. Champions see this through very effectively. They make sure that teams know how their KRs fit well and work cohesively with other teams/functions.
This, of course, is a very critical aspect. Even if the budget is not just in terms of the amount invested onto platforms, coaching, etc., the fact that the number of times teams spent on crafting OKRs, managing check-ins, and updating progress is also viewed as a productivity cost. Champions try to make all these steps in the process as productive as possible to make sure every minute is worth the penny.
OKR champions lead in-house OKRs training programs, as new teams come on board. In short, OKR champions win the hearts and minds of teams!
Fitbots is committed to enable organizations get OKRs roll out right the first time. Commitment by the organization, coupled with expertise in setting and implementing OKRs with the right tools and rituals, increases OKRs achievement by 10X. Our suite of OKRs software with on demand coaching and OKRs certifications, gives an integrated OKRs experience to teams.