Objectives and key results (OKRs) are a leading goal management framework that helps individuals, teams, and entire organizations reach their goals through identifiable and measurable results. To help you get a full understanding, we’ve compiled the most important information on what are OKRs to give you a quick yet complete overview. By the end, you will have a better understanding of what is an OKR, how OKRs work, why you should use them, and how to get started.
What is an OKR? Definition and OKR components
Let's start with the basics — what does OKR mean? The OKR acronym stands for objectives and key results. It's a goal management framework created by Intel’s Andy Grove and then popularized by venture capitalist John Doerr in his New York Times best-selling book Measure What Matters. Companies from Google to Adobe have rolled out the OKR framework to accelerate growth and drive innovation by helping teams see how their work fits into the overall company’s objectives.
The OKR framework by definition has two core components:
- Objective: what you’re trying to accomplish
- Key results: how you’ll measure whether you achieve the objective
In the OKR framework, objectives are qualitative goals and should be inspiring and ambitious. An objective can be long-lived or can have a firmer deadline like the end of the year, the next quarter, or even the next month.
The objective should be hard; the point is to push yourselves as a team or organization. When writing your objective, it should have the following qualities:
- Objectives are “stretch goals” or “moonshots,” pushing the limits of your team’s capabilities while remaining within the realm of possibility
- Objectives are limited in number, which constrains focus to core priorities
- Objectives are designed with your strategy, mission, and vision in mind
Example objective: Dominate our category mind space through content and community.
Key results are quantitative metrics that measure progress toward your objectives. Key results are used to ground your objectives in reality, allowing you to break down an objective into tangible milestones and specifically define the outcomes to be achieved. For this reason, it’s critical that they always have a number to measure progress by so there’s a clear answer to whether it’s achieved. Key results also act as a mechanism for accountability, particularly for goals that have a long timeframe and may easily go off track.
For each objective you create, you will typically assign 3-5 key results. Here are some example key results that could be used for the example objective above:
Example key result 1: Rank number 1 in search for our top 5 keywords.
Example key result 2: Build a Slack community of 10,000 relevant and active members.
Example key result 3: Reach 30,000 unique page views per month on our blog.
The benefits of OKRs
The OKR framework can be a superpower for creating an environment where employees work with purpose. And while many companies have achieved amazing results with OKRs, what is less often discussed is that deploying OKRs in the right way creates a vastly better working environment.
In fact, the OKR framework for goal setting offers five core benefits:
Focus: Doing the most important work
In the OKR methodology, deciding what NOT to do is as important as deciding what to do. Setting OKRs forces the conversation of deciding what’s most important and letting go of the things that aren’t. With a better focus through OKRs, team efficiency improves because strategic priorities are established, and everyone is contributing to work that actually moves the needle.
Accountability: Ownership and commitment
The OKR methodology creates a sense of ownership within teams to improve accountability when advancing goals. And when there’s mutual trust and transparency in teams, job satisfaction, worker confidence, and organizational commitment increase. Because of the transparency of OKRs, they are a built-in proofing tool for the organization to help you regularly measure progress and uncover problems as early as possible.
Alignment: Everyone working towards the same goals
Aligning employees with the overall strategy requires clarity of top-level objectives. The OKR framework helps display the organization’s direction and show what everyone is working towards. When employees know the company’s mission and current objectives, less time is wasted, and resources are better optimized.
Transparency: Know what others are working on
OKRs are as much about information access as they are strategy, which is why transparency is a big component of the OKR framework. Transparency in OKRs enables everyone in the organization to know why leaders make decisions, what the company is trying to accomplish, and what teammates are working on. When you understand the top-level objectives (because you can see them), your initiatives are more likely to drive impact.
Engagement: Each person is filled with purpose
OKRs combine the benefits of focus, accountability, alignment, and transparency to drive an outcome vital to the modern workplace — engagement. With the power of democratizing decision-making with bottom-up and bidirectional goal setting, OKRs empower employees to go all-in on the process. The sense of personal responsibility attached to OKRs can strengthen employee connection to your company while allowing them to see how their work impacts the progress of individual, department, and company goals.
See the specific benefits OKRs offer startups, SMBs, and enterprises
Using OKRs with KPIs, tasks, and other business processes
To make the OKR framework more effective, things like projects, tasks, KPIs, and CFRs are often used in tandem to ensure all your business processes are aligned.
Projects and tasks
As the work initiatives that help you achieve your key results, projects and day-to-day tasks are a big part of your business operations. While projects and tasks in general should not act as key results, there are some cases where it may be necessary. This is particularly true in cases where the outcomes of a key result can’t easily be quantified, but still acts as an important part of achieving an objective. For instance, publishing a book could be both a project and key result in relation to the objective of “dominate our product category mind space.”
Key performance indicators (KPIs) are the critical numbers a business needs to monitor to track organizational performance. Although changes to some KPIs can be used as key results, key results do not always include KPIs. For instance, the key result of an OKR in a product launch can’t be classified as a KPI. The initiative may be exploratory, and hence non-essential to the business, which means any key results would not be classified as KPIs. On the other hand, increasing customer lifetime value may act as a key result for a specific objective, in addition to a KPI for the business.
Learn more about the differences between OKRs and KPIs
Conversations, feedback, and recognition (CFRs)
Rooted in continuous improvement, CFRs help boost business results, gather feedback, and recognize outstanding performance. The three components of CFR are:
- Conversations: An authentic one-on-one between a manager and contributor aimed at driving performance
- Feedback: Mutual and intentional communication among peers to evaluate progress and guide future improvement
- Recognition: Expressions of appreciation to deserving individuals for contributions of all size
CFRs were made to channel OKRs into organizations, encouraging depth and complexity in goal setting and tracking. Moreover, as CFRs are meant to be conducted face-to-face or over video calls, they also add a human component to the OKR process, facilitating connection, engagement, and powerful business results.
Learn more about how OKRs and CFRs work together
OKRs vs. other goal management frameworks
Finding the right goal setting methodology for your organization is a big task. Outside of the OKR framework, there are tons of other options to choose from to help align your employees with the company’s overall business objectives.
Some of the more notable ones include:
- SMART goals: A well-known framework for setting and managing goals, the letters in this acronym stand for specific, measurable, achievable, realistic, and timely.
- The Balanced Scorecard: This method takes a broad approach to strategy planning and goal management to generate “scorecards” that track performance. Emphasis is placed on measuring four areas: financial, customer, internal processes, and learning and growth.
- Hoshin Kanri: Originating in Japan, Hoshin Kanri can be translated to “policy development.”. Like other approaches to goal management, the method focuses on setting strategic objectives, aligning the organization, and measuring progress.
- MBOs: Management by objectives (MBOs) is another well-known framework that functions similarly to the others. Aligning objectives, creating a plan of action, and measuring performance and rewards are key components.
- 4DX: 4DX refers to the 4 disciplines of the strategy execution framework. It proposes four core disciplines for helping individuals and teams reach their goals — focus on the wildly important, act on the lead measures, keep a compelling scorecard, and create a cadence of accountability.
- EOS: The Entrepreneurial operating system (EOS) helps leadership teams become tighter and more efficient in ways meant to permeate the entire organization. It’s designed for growth-minded organizations of about 10 to a few hundred people but has been employed successfully in much larger companies, too.
While all of these methodologies have their merits and use cases, every organization is unique, and each company needs to find what works best for them.
Read more about goal-setting frameworks to find the right one for your business
How to write OKRs
When it comes to creating and writing incredible OKRs consider the following formula:
Well-written OKRs give you a sense of direction and enable you to focus on what matters most while poorly written OKRs can disconnect and demotivate teams, costing time and effort in the long run.
So how do you write good OKRs? Let’s break down the anatomy of an OKR.
As you start your OKR journey, remember there are certain qualities that objectives and key results must have for them to be effective. Here is a quick reference of the key qualities you need to know about:
Basic rules for objectives
- Clear: Use simplified, clear, concise language that can be easily understood across the organization. Business jargon and technical language should be avoided. This may even apply if it’s a function specific OKR, as members of other teams may need to understand it too.
- Inspiring: Energize team members and boost engagement with inspiring language and power words such as “crush” and “transform.”
- Actionable: Make objectives actionable by using verbs and clearly defining the work to be done.
- Timebound: Set a deadline for each objective to ensure resources are managed and things don’t go off track.
- Ambitious yet realistic: Objectives should be “stretch goals” or “moonshots.” This means that they need to push the capabilities of your team but shouldn’t be so extreme that they reduce confidence.
- Focused: Constrain objectives to key priorities to ensure focus on mission-critical objectives.
Good objective: Turbo-charge our sales cadence to win more deals faster.
Why it’s good: Not only is it clear and easy to remember, it's also inspirational, actionable, and focused on a key priority.
Bad objective: Increase number of SQLs from MQLs by 400% derived from the DCT, OBL, and COS Campaigns.
Why it’s bad: This is a key result, not an objective. It’s not inspiring, uses function-specific jargon and is unrealistic.
Basic rules for key results
- Quantified: Numbers as the key to tracking progress towards objectives.
- Measurable: The number must be clearly measurable. Keep in mind that if you can’t collect accurate data, then you won’t be certain about progress.
- Relevant: Key results must be relevant to the objective. Each key result serves to paint the picture of progress toward a particular objective.
- Focused: It’s best practice to assign 3-5 key results per objective. Too few key results won’t give you the complete picture, and too many could mean losing focus on what matters.
- Results-oriented: Key results must be results oriented vs task oriented. They should signify the achievement of something, as opposed to work being completed.
- Ambitious yet realistic: Like with objectives, individual key results need to push the envelope of what’s possible but should not feel unachievable.
Example key results
Good key result: Create 200 SQLs from MQLs by EOQ.
Why it’s good: Quantitative, tied to a specific metric, and time-bound.
Bad key result: LTV/CAC Ratio is 3:1.
Why it’s bad: This is a KPI and isn’t linked directly to the objective.
Learn all the best practices for writing OKRs
Need some inspiration before getting started writing your own OKRs? Check out the examples below of well-written OKRs at the company, team, and individual levels.
Company OKR example
- Objective: Become a leader in the HR tech market
- Key result 1: 25% of our revenues come from Forbes 100 companies
- Key result 2: 100% of our C-level team to be hired from Player-A companies
- Key result 3: Be recognized as the best HR tech B2B vendor by top 5 HR media
- Key result 4: 100% employee retention rate
Team OKR example (marketing)
- Objective: Prime the marketing pump
- Objective description: Improve the efficiency of our operations to create more impact
- Key result 1: 20% of SQLs begin as Trials
- Key result 2: 30% of MQLs are Organic
- Key result 3: Achieve $7.5mm of MGP
Individual OKR example (sales leader)
- Objective: Break the 8-figure barrier
- Objective description: Trim operational fat and crush expansion to amass $10mm in quarterly revenue
- Key result 1: Achieve $1.5mm in new ARR in NOAM region
- Key result 2: Reach >30% new business upsell/cross-sell for current customers
- Key result 3: Double SQL: opportunity conversion rate to 14%
- Key result 4: Half the sales cycle for our baseline product from 42 to 21 days
Check out our OKR examples for more inspiration
How to implement OKRs?
Although the OKR methodology can be used on a smaller scale for teams and individuals, the framework works best when it’s used throughout the entire organization.
Before you get started implementing OKRs, there are a few things you should consider:
- You will need to clearly define your vision, mission, and strategic objectives. OKRs should be linked to the high-level thinking of the organization in order to make them a reality.
- Running a small pilot program across one division may be useful before rolling out OKRs to the entire organization. This would allow you to collect data on what does and doesn’t work and help build an internal case study for change.
- OKR software can help you achieve the best possible transparency and accuracy from the method, such as by connecting your data sources to dynamically update key results progress.
- OKR consultants may also be useful to help you streamline the process and ensure the initiative delivers what you need.
A useful way to start thinking about implementing OKRs is to look at a typical OKR cycle. OKR cycles are the timelines in which OKRs are developed, executed, measured, and evaluated.
For example, a quarterly OKR cycle looks something like this:
- Before and at the start of the quarter: OKRs are set by the executive level and communicated across the organization. Teams and individuals then set their OKRs and align with the rest of the organization.
- During the quarter: Weekly reviews, confidence assessments, and progress reporting about key results are made. Problems are identified and solved, and execution is optimized through continuous learning.
- At the end of the quarter: A companywide retrospective is done to evaluate progress and collect learnings across the board. Decisions about changes of direction are made, including whether to adapt and continue with the current OKRs.
There are more details to consider, including who owns which OKRs, how decisions are made, and how OKRs fit in with your performance management process.
How each company rolls out OKRs will be different, which is why it’s important to fully understand the methodology before trying to implement it. Without proper application, OKRs can easily be forgotten and disregarded by team members, or in the worst case, come across as another form of micro-management.
Read this article to learn more about implementing OKRs
Common mistakes when writing OKRs
Setting great OKRs takes practice. Early in the transformation towards a more dynamic, outcome-based culture, it’s easy to go off the rails. Here are a few of the most common mistakes made when using the OKR methodology.
Not aligning with top-level objectives: A key benefit of OKRs is creating alignment from the top of the organization to the bottom to ensure the right work is done and employees are engaged. OKRs that aren’t linked to top-level objectives won’t provide these benefits.
Sandbagging: This is the practice of teams underpromising and overdelivering. This is done to avoid the pressure of difficult targets but causes problems such as under-utilized bandwidth and misallocation of resources.
Not learning and adapting: OKRs are best used to create a culture of learning and continuous improvement. Learning and adapting from regular reviews and retrospectives are a key part of the methodology.
Lack of transparency: For better alignment, OKRs need to be transparent so everybody can see how their OKRs work in conjunction with the rest of the organization. Transparency also allows problems to be more easily identified and enables the whole team to solve problems together.
Learn how to avoid the top OKR mistakes
FAQs on OKRs
Getting started with the OKR methodology can seem daunting, but it doesn’t have to be. Here are a few of the frequently asked questions from people like you at the beginning of their OKR journey.
What are OKRs and how are they different from other goal management methods?
Objectives and key results (OKRs) are a goal management framework that helps organizations and teams align their efforts toward achieving specific and measurable objectives. They differ from other goal-setting methods in that they focus on setting specific, measurable, and time-bound objectives and tracking progress through key results.
Who should own OKRs?
OKRs should be owned by individuals or teams who are responsible for achieving specific goals or objectives within an organization. This could include department heads, managers, or project leaders.
How to measure OKRs?
OKRs can be measured by tracking progress towards specific, measurable targets. OKR software that aggregates, updates, and displays data can be useful for this purpose.
Who created OKRs?
OKRs were created by Intel’s Andy Grove and then popularized by venture capitalist John Doerr in his New York Times best-selling book Measure What Matters. Doerr learned about OKRs while working at Intel in the 1970s, and later popularized the concept while working with companies like Google and Amazon.
How many OKRs should you have?
It’s generally better to have a smaller number of objectives that focus only on key priorities. Each objective should have 3-5 key results assigned to them.
How often should OKRs be reviewed and updated?
OKRs should be reviewed and updated regularly, such as quarterly or semi-annually, to adjust to changing circumstances or new information.
How do OKRs work within my performance management process?
OKRs can guide teams and organizations towards aspirational goals, while performance management assesses individuals’ abilities to perform tasks and generate desired outputs. With this in mind, fully combining OKRs with performance management can deter progress and encourage wrong behaviors. While acknowledging the differences between the two frameworks is essential, you can align OKRs and performance management to streamline organizational success.
How do I make sure that OKRs are actionable and not just a list of vague aspirations?
Make sure OKRs are actionable by setting specific, measurable, and time-bound objectives and key results.
How do I ensure OKRs are aligned with the company's overall strategy and vision?
Align OKRs with the company's overall strategy and vision by involving stakeholders, linking OKRs to company goals, and regularly reviewing and updating them.
Take the next step in your OKR journey
Now that you have a solid understanding of the OKR methodology, you're ready to take the next step in your OKR journey. While OKRs can be complex, this article gives you a good foundation to build from as you bring the framework into your organization. And if you're looking to dive deeper, check out our OKR Fundamentals email course to ensure you have everything you need to succeed with OKRs.
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