A Simple Guide to OKRs
Objectives and Key Results (OKRs) is a management technique for setting goals within an organization, measuring results and having all team members and leaders work toward one direction. OKRs has many advantages compared to other management models. OKRs are created within a framework that describes their relationship to organizational hierarchy and timeframes, instead of treating goals in an isolation and compared to some models it is much more simple and can be implemented much faster.
These nine key points will help you implement OKRs at your organization.
1. Set qualitative objectives and quantifiable key results
For OKRs to be successful, objectives should be qualitative and key results should be a quantifiable metric of business results. Examples of quantifiable key results include “increase company revenue by 15%”, “get 20 new customers by the end of Q4”, and “decrease churn rate by 10%”.
2. Three is the magic number
Keep the number of objectives and key results for the organization and for each team small. Typically OKRs consist of three high level objectives and under each objective there are three measurable key results.
3. Track progress
The progress of each key result can be measured on a score form 0 to 10 or 0 to 100%. OKRs should be challenging, so reaching about 7 or 70% is considered a good result. If it‘s 10 or 100%, then the target was too easy. If it’s less than 4 or 40%, then it might be a warning sign. It doesn’t necessarily mean it was a failure, but it can be a sign to evaluating whether the objective is still worth pursuing or if the approach should be changed.
4. Set a cadence
OKRs for organizations are typically set on annual basis because most companies set their plans and budgets for a year. OKRs for each team are set on monthly or quarterly bases. This way, teams are more flexible and can adjust their OKRs several times during a year but sill support the company’s yearly OKR.
5. Align with organization’s objectives
Focus on the objectives of the organization. The objectives of each product team should build up and accomplish the organization’s objectives. Don’t give space for personal objectives as they might interfere with the person’s ability to fully contribute to their product team’s objectives.
6. Be transparent
It’s very important that every team track their progress against their objectives and makes the results and the progress transparent to everyone. Transparency makes objectives observable across all levels and shows everyone how they align with the rest of their department and motivates one another to accomplish their objectives.
7. Evaluate performance consistently
In order to be fair and avoid any confusion, you should use the same approach in the evaluation of key results across the whole organization, so the success of key results is calculated the same way for all teams.
8. Be accountable
Hold each team accountable for achieving their objectives. Mistakes are unavoidable, so you must expect them and push through with encouragement. Retrospectives are a great way to learn and improve.
9. Establish a hierarchy
Senior management is responsible for the organization’s objectives and key results. The objectives of product teams are the responsibility of the the heads of product and technology. Each product team is responsible for the key results of each objective they’ve been given.
