The OKR Cycle: A Step-by-Step Guide

Time plays an important role in goal setting and achievement. Goals, unlike dreams, have deadlines. This means that realistic yet ambitious timelines are part of successful goal setting and execution. This is especially true for objectives and key results (OKRs).

When creating OKRs, simply deciding on a date for goal attainment is insufficient — you need to consider the entire OKR cycle. The OKR cycle gives you an in-depth understanding of the different phases of goal achievement while encouraging you to consider the intervals at which you monitor and optimize performance. As such, an in-depth knowledge of the OKR cycle is essential. 

To help you gain a better understanding of the OKR cycle, this article will discuss:

• What is an OKR cycle?
• How to choose an OKR cycle
• OKR cycle example
• The OKR timeline before and during quarterly OKRs 
• Top tips for the OKR cycle

The OKR timeline is represented through the OKR cycle — the period in which OKRs are set, communicated, executed, monitored, and optimized. The OKR cycle is a core component of the OKR methodology. Without it, you lose the benefits of proper OKR planning, ongoing optimization, and the performance-enhancing pressure that deadlines create. 

This OKR cycle typically looks like this: 

• Pre-quarter: Preparing the OKR rollout  
• Start of the quarter: Developing OKRs, communicating them, and cultivating alignment  
• During the quarter: Reviews, monitoring, confidence assessments, adjustments, optimization 
• End of the quarter: Reviewing OKRs, learnings, and crafting upcoming quarterly OKRs

The above example refers to an OKR cycle with quarterly OKRs, but alternative (e.g., annual) OKR cycles are common as well. As the OKR cycle is flexible, companies can create OKR timelines that are highly tailored to their workflows. 

The best practice that most companies use when creating their OKR cycle is adopting a dual cadence strategy. This means they use a combination of quarterly OKRs and annual OKRs, allowing them to unlock both benefits. 

As you might imagine, quarterly OKR cycles are created in line with each business quarter. This OKR cycle can be used alongside an annual OKR cycle to break down a bigger goal into more measurable milestones. In addition, quarterly OKR cycles can also be used for more ad-hoc goals, such as fundraising or a hiring push.  

The benefits of quarterly OKRs include: 

• Increased agility through a less committed timeframe 
• More efficiency and creativity due to time constraints  
• Quicker feedback loops to create faster learning 
• Reduced opportunities for “set it and forget syndrome”  

Unlike quarterly OKRs, annual OKR cycles function every year. This type of OKR cycle is better for bigger goals and goals that could be seen as a core, consistent part of the business. For instance, building annual OKR cycles around growth objectives is a common practice.  

The benefits of annual OKRs include: 

• Ability to set more ambitious OKRs 
• More flexibility to optimize toward the goal 
• Less pressure due to more time  
• Less overhead in terms of managing the OKR process 

In addition to quarterly and annual OKR cycles, you can set alternative OKR cycles. This could run on a monthly or six-week basis, for instance. Alternative OKR cycles offer benefits such as being more customizable to specific departments, industries, and ways of working, such as sprint or project-based workflows.  

As part of OKR planning process, you must determine which goals fit into which OKR cycles. In some cases, recurring goals will have both annual and quarterly OKR cycles (e.g., revenue targets). When deciding on your OKR cycles, you must first flesh out your goals fully. Here are a few things to think about: 

• What are your goals, and how many do you have? 
• Why did you choose these goals? 
• Do you have the capabilities to reach your goals? 
• How long will it take to reach them? 
• What factors could inhibit reaching them? 
• What factors could accelerate the process?  
• What data and evidence do you have that you can achieve your goals in this OKR cycle? 
• Are the goals you are setting ambitious yet achievable? 

A rigorous understanding of your goals will give you the first indicator of what type of OKR cycle you should adopt. You will likely find some goals will lead themselves into a shorter timeframe, whereas others will be longer. So, there isn’t a strict need to choose one OKR timeline completely over another, as a mixed or dual cadence strategy can be helpful in some instances. 

Once you understand your goals, you should consider other factors, such as: 

• Industry and departments: Industries will vary in terms of operations and sales cycles, meaning setting goals around certain business functions will involve varied timelines
• Company size and nature: As startups, scale-ups, and enterprise companies have different needs, cycles may vary
• Macro influences: While macro factors such as the economy and geopolitics can’t be easily predicted, it’s worth assessing potential changes in the broader business environment that could affect your timelines 
• Micro influences: At the local business level, factors like competitive disruption, supply chain risks, and internal issues can affect execution (for instance, weak company culture or the inability to bridge the strategy execution gap)

To better understand how an OKR cycle works, it’s useful to walk through an example. As quarterly OKR cycles are the most common, we will use it in this case.

To set your company up for success, the first thing you need to do is learn the OKR method and organize your capabilities regarding OKR execution with a solid OKR process. This involves a few things: 

• Have key stakeholders (executives, managers, etc.) undergo OKR training covering best practices, key terminology, common mistakes, and OKR examples to get a good sense of how they work in action
• If it’s your first rollout or a previous rollout didn’t go smoothly, consider using an OKR consultant or coach  
• If your organization is complex (size, priorities, interdependencies) or you want to power the OKR process with data, investigate OKR software solutions

Then, you will need to determine your OKR timeline:  

As you perfect your OKR process, you will need to consider factors such as: 

• Which goals would you like to prioritize? 
• What are your organization's capabilities? If you have greater bandwidth and past evidence of performance, you can set more numerous and difficult OKRs
• What challenges will you encounter regarding each variable? For instance, if you decide on aspirational OKRs, would the potential of failure demoralize or energize your team?

To make the most out of a quarterly OKRs, you need to perfect your OKR planning before the beginning of the quarter.

As a best practice, you'll want to start as high up as you can. This involves getting the senior leadership team together to build those top level OKRs. These OKRs will then be used to set the overall direction of the organization, in addition to being used by lower levels of the organization to align their own OKRs.  

It’s also recommended that you identify possible OKR champions in your organization. These are the people who have fully bought into the OKR method and have more knowledge about it than others. These OKR champions can be useful to make the case to more skeptical team members, in addition to ensuring consistency and optimization of the rollout process.

Common mistakes before the quarter: 

• Underestimating OKRs: Given the nuances of the OKR method. you need to set the right goals, generate alignment, and optimize the process using data
• Overcomplicating OKRs: Some organizations may delay OKR rollout and bloat the process with extra check-ins and bureaucracy — the goal is to improve the process as you move forward
• Not making a case for OKRs: All levels of the organization need to buy into the OKR method for there to be real alignment  

Learn about the most common OKR mistakes

Just before the OKR cycle begins, you will need to share your top-level OKRs with your company. There are two important reasons for this: 

1. The OKR method works best when there is transparency — for alignment, all members of the organization should be able to view each other's OKRs
2. You need to solicit feedback from the operational level of your organization to ensure realistic goals are maintained — this includes feedback from individual contributors responsible for day-to-day goal execution 

Based on the timeline of the OKR rollout, the next phase will be departments, teams, and individuals creating their own OKRs. This is where you need your entire organization to start thinking about alignment. Things that should be top of mind during this process include: 

• What interdependencies exist? For instance, if the sales team has a quarterly OKR for pipeline generated, how much of that is dependent on the marketing team? The two departments would need to collaborate to find out what’s realistic — commonly known as horizontal alignment
• How do OKRs set by teams and individuals align with strategic OKRs? This is referred to as vertical alignment

Once your entire organization has set quarterly OKRs and there is organizational alignment, you’re ready to move into the execution phase of the quarter.  

Common mistakes just before the start of the quarter: 

• Setting tasks as key results: As key results are quantitative outcomes, while tasks are actions taken to achieve key results, it's important to clearly define and separate the two
• Not knowing baseline metrics for KRs: It’s necessary to have a realistic idea of what numbers you can achieve for each key result, and this should ideally be based on historic data  
• Lack of transparency on “Why OKRs”: The benefits of the OKR method must be communicated to increase engagement and alignment.

Once quarterly OKRs have been set, there is an ongoing OKR process that you and your team need to engage in. Unlike more traditional goal-setting methods, the OKR method has mechanisms that overcome the common “set and forget” syndrome or creating goals and completely forgetting about them.  

Throughout the quarter, your team members should be measuring their progress. In addition, they will be checking in with managers and other team members to boost accountability and solve problems. Some OKR practices that occur throughout the quarter include:  

• Weekly check-ins: Each week, teams will come together to discuss progress toward key results, fostering a culture of feedback and learning
• Confidence assessments: OKR owners will provide a score in relation to how likely they think they are on track to meeting key results
• Recalibration: Depending on confidence levels and group analysis, teams and OKR owners may adjust their strategy and execution to increase the likelihood of meeting key results 

Common mistakes during the quarter: 

• Changing OKRs: Generally, OKRs should remain the same throughout the quarter, but there are a few exceptions, like sudden changes to the market or strategy or a loss of key personnel, where it might make sense to change quarterly OKRs
• Shifting focus: Roadblocks and challenges can be used as excuses not to “do OKRs” when OKRs are, in actuality, the solution to better execution
• Not leveraging data: The OKR process needs to be data-driven in order to track progress and make more informed decisions about adjustments

As you approach the end of the quarter, you will have three things to complete: 

• Analyze OKR achievement for the current quarter  
• Reflect on the key learnings from the OKR cycle  
• Set the upcoming quarterly OKRs

To do this, you will need to conduct what is known as the OKR retrospective.  

The OKR retrospective 

At the end of each quarter, you'll need to assemble your entire team and conduct a review regarding what was accomplished during the previous OKR cycle, what was learned, and where you go from here. This is known as the OKR retrospective and occurs at the individual, team, and company levels. 

The purpose of this is to zoom out and look at the bigger picture of the OKR process and your OKR cycle. You want to see if what you’re doing is working or if there are things that need to be changed. These retrospectives are part of the continuous OKR planning process and serve as valuable tools to collaboratively problem solve and solicit feedback from the organization. 

Through this, you can improve your OKR implementation in addition to setting more effective goals for the next OKR cycle. Retrospectives also help to maintain alignment across the organization and maintain focus on the crucial priorities.  

During the retrospective meeting, your team should be considering questions such as: 

• What were the overall scores for each OKR? 
• What were the causes of underperformance? 
• What problems did we focus on? 
• What did we learn?  
• What went well? 
• Does it make sense to carry on the same OKRs to the next quarter? 
• Are there any ways to improve the OKR process and the upcoming OKR cycle? 

Fundamentally, the end of the quarter period should be used to synthesize your learnings and adjust for the next quarter. This will include what you need to do to better achieve your OKRs next quarter, in addition to improvements to the OKR process.  

Once you have completed this analysis, you can then set more informed quarterly OKRs, improve OKR planning, and create a better OKR implementation plan.  

Common mistakes at the end of the quarter: 

• Trying to “boil the ocean”: OKRs are meant to optimize over time, so you shouldn’t be disheartened if initial rollouts don’t go smoothly — setting the foundation, creating the habit, and finding rhythm takes time
• Not adjusting for next quarter: Evolution through learning and adapting is fundamental to OKRs — as business conditions change, both your OKRs and the OKR process will need constant work

To make sure your OKR cycle runs as smoothly as possible, use the following OKR best practices:

1. Emphasize the why: Keeping your organization's values and purpose top-of-mind can help you get buy-in from stakeholders and create unified team efforts throughout the OKR cycle
2. Establish a cadence of communication: Discussing OKRs regularly ensures employees are aligned on business strategy and aware of progress, goals, and next steps
3. Keep OKRs flexible: Flexible OKRs allow you to respond and adapt to changing circumstances while ensuring teams can tailor goals based on their unique needs and challenges

Read expert advice on perfecting your OKR cycle in our OKR Trends Report.

As outlined, there are different phases of the OKR cycle, each with many different variables that you need to optimize. As such, many companies fall for the common pitfalls of the OKR cycle and fail to realize the complete benefits of OKRs.

To get the nuances of the OKR cycle correct, consider expert counsel in the form of OKR consultants who can help create an OKR rollout plan tailored to your organization. You can also read our OKR guide.

If you need better ways to leverage data to improve your decision-making and execution, or if you operate in larger, more complex organizations, Quantive's OKR software can also be a potential solution.

Quantive empowers modern organizations to turn their ambitions into reality through strategic agility. It's where strategy, teams, and data come together to drive effective decision-making, streamline execution, and maximize performance.    

As your company navigates today’s competitive landscape, you need an Always-On Strategy to continuously bridge the gap between current and desired business outcomes. Quantive brings together the technology, expertise, and passion to transform your strategy and playbooks from a static formulation to a feedback-driven engine for growth.    

Whether you’re a fast-growing scale-up, a mid-market business looking to conquer, or a large enterprise looking for innovation, Quantive keeps you ahead – every step of the way. For more information, visit www.quantive.com.