How to set OKRs in 6 steps

We’ve employed Objectives and Key Results (OKRs) at Firefly for the last two years. Because they are part of our formal review process, they’re used widely across the business. However, there has been some confusion, especially amongst new starters, about how these work and exactly why we spend so much time on setting them.

In this article, I will set out how our business sets goals and how these filter down to the individual. I’ll also outline the feedback loop we use to ensure we’re capturing feedback and objective proposals from the individual at the company level.

Each team within Firefly may do this slightly differently, but this is the way it works within the design team. We find this way of setting OKRs to be massively helpful in ensuring that everyone knows what their goals are and how their goals are helping the company to achieve its goals.

Before the start of each quarter we set OKRs in three tiers:

• Business-wide — What I’m calling BWOKRs (sorry!)
• Team
• Individual

Step 1: Drafting BWOKRs

The process begins with a dedicated management team session where we discuss our high-level goals. These are strategic areas on which we expressly want to focus in the coming three months. They are purposely separate from the ongoing business-performance goals that change little quarter-on-quarter. At the end of this session, we’ll have 4–5 Draft Objectives and Key Results. This session ensures that we are thinking about the whole business, rather than just concentrating on our individual teams. It helps us break us out of our silos.

Step 2: Drafting Team OKRs

Each manager creates a set of OKRs for their team that support the business-wide objectives. Personally, I do this by identifying those BWOKRs that I know my team can influence (usually most) and building a Google Sheet with my proposed list of objectives and those key results I think would prove that we’ve achieved them. I create one tab for the BWOKRs, another for the team OKRs and then one each for each member of the team.

Our design team OKRs sheet, with tabs for team OKRs, the BWOKRs and one each for individuals.

We then conduct an hour-long session with the entire design team where we review each OKR to ensure they are all understood. We’ll spend time crafting each objective, rewriting them until everyone is happy. We also cover each key result rewording them or adding new ones. This is valuable feedback that I can take back to the management team.

Step 3: Drafting Individual OKRs

Each team member then creates their own list of OKRs that support the team OKRs. I encourage them to not just copy and paste ones from the team list, rather word their objectives in a way that speaks to them. This should take them around an hour.

Step 4: Finalising Individual OKRs

We run quarterly review meetings with each member of staff, the second half of which is given over to critiquing individual OKRs. Much like step 2, we’ll refine the OKRs together to ensure they cover the key things that both I and the individual would like them to achieve in the coming quarter. We may also find that we discover things that also need to be added to the team OKRs.

Step 5: Finalising Team OKRs

After the team drafting session and each individual’s review session, the team OKRs sheet should be almost complete. I usually set aside an hour to double check all the wording to ensure it makes sense.

Step 6: Finalising BWOKRs

Finally, we run another session with the management team where each team presents their teams OKRs. We can then make edits to the BWOKRs to ensure that they’ve captured the essence of the objectives right across the business.

The “bounce” — The down and back up again process we follow to set OKRs with a large team

Wrapping up

So you can see that by taking this down-and-up approach we set goals from the top and then adjust them with feedback from each layer. In closing, I’d like to add the following thoughts:

• This is a lot of work, and rightly so. We’re setting the direction of the company for the following 12 weeks, so we’d better make sure we’ve got that right.
• Other teams may have more layers, this process works for them too by adding in another drafting step on the way down and a finalising step on the way up
• In theory, this could work for as many layers as you need, but I feel focus would get lost beyond 4. However, I have no evidence to support this, its just a gut feeling