By Jonathan Stretton
Ok, so firstly let’s bring this back down to Earth.
Why read this article?
If you are curious about what OKRs are and how they might be able to help your business then this article is for you.
If I’ve grabbed your attention with the catchy title and you’re now wondering whether to click back to the main page. Go on, treat yourself. Indulge your curious mind and dive straight into this article. Enjoy!
Let’s start at the beginning…
What are OKRs?
OKRs (Objective Key Results) are a framework used by businesses for defining and tracking objectives and their outcomes. The simplest way of thinking about this is by asking two questions 1) Where are we trying to get to? 2) How will we know when we’ve got there?
OKRs help to drive alignment across the business by ensuring that (where possible) they align to the overall business strategy. If everyone is aligned to where the business is heading then, in theory, they have a much better chance of being successfully opposed to a business with teams who are misaligned.
An example of a truly aligned business is the famous story of when President Kennedy was visiting NASA headquarters for the first time in 1961. While touring the facility, he introduced himself to a janitor who was mopping the floor and asked him what he did at NASA. “I’m helping put a man on the moon!”. Everyone understood what the business was trying to achieve and how what they were doing fed into that objective/outcome. Alignment at it’s finest.
OKRs are an easy and effective method of creating that cohesive alignment.
Traits of a good OKR
The best OKRs have two key traits. The first is an objective (sometimes it’s easier to think of these as outcomes) that feel almost unattainable but realistic enough that you feel comfortable committing to it.
The second key trait is that the Key Results are measurable. This may sound obvious but it’s easier to fall into the trap of starting to write tasks on what you need to do to achieve the Objective. The reason OKRs stand out is that you may complete all the tasks but have no way of measuring how successful you’ve been in trying to reach your Objective. Make Key Results measurable.
How do you score OKRs?
There are different theories on this point. In all instances, you score OKRs from 0–1.0. Some people choose to treat 0.7 as the score to symbolise that you’ve achieved the Objective with 0.8–1.0 used as a means of reflecting overachievement. Others adopt the principle that if you’ve achieved the Objective or overachieved then the OKR is scored as 1.0.
Scoring can be hard for teams. The natural desire to not fail or more importantly be perceived as failing by peers or business hierarchy can weigh heavily on teams.
With this in mind, I would recommend using 1.0 as the score to reflect that the OKRs have either been achieved or overachieved. The reason for this is that it removes any ambiguity about the scoring. Remember the Key Results are all measurable therefore applying a percentage to them e.g 60% equals 0.6 makes the process simpler and easier to adopt by the teams.
It’s worth noting that if teams are continually ace’ ing their OKRs and scoring 1.0 on a regular basis then it probably means that their OKRs are not stretchy enough. Ideally, you want to try and aim to have a sweet spot around 0.7.
Another important element of scoring is that if a team achieves a low score (say 0) then that’s ok. Context is king/queen and there could be a valid reason as to why the team have scored their OKR. At this point, it’s important that the hierarchy reviewing the OKRs don’t beat the team up and instead try to understand the reasons behind the score eg was it too ambitious, did our priorities change or was there a massive dependency on another team, etc.
Why choose OKRs over other methodologies?
There are without doubt similarities between OKRs and for example SMART goals and even KPIs to an extent. OKRs come into their own when they are considered in the bigger context of the alignment piece mentioned earlier in the article. SMART goals are generally isolated and have no clearly defined correlation or alignment to the overall business’s strategic objectives. OKRs are all about aligning teams to the overall strategy and that is incredibly powerful. It provides clarity to teams as to what the business wants to achieve and similarly the business can see how the team’s OKRs are feeding into the overarching strategy.
What would I do differently next time?
OKRs are great, really great, but change can be hard. What I found is that we tried to introduce too many layers of OKRs at once (Exec, department, team, individual) and it was a brutal introduction for all involved.
We live and learn. My advice would be to start small, review and then expand. It seems obvious but it’s easy to get wrapped in the fanfare of OKRs and take your eye off the key driver, which is changing the culture of hundreds of people in order to become better aligned and in return deliver more value to the business. Nibble don’t bite off too much too soon.
Secondly, think about how your business is set up today and how it might change over time. This will not only influence how you might approach OKRs but also how you track them across the business. I would recommend just using a spreadsheet, to begin with, but with one eye on the future and choosing a tool that will support your approach in the long term.
The three takeaways…
- OKRs are great at aligning teams to the business strategy which in turn should deliver greater returns.
- Start small, review and then expand the number of people engaged in OKRs
- Think about how you’ll track OKRs across potentially complicated business structures. If in doubt keep it simple.
If the article has piqued your interest and you would like to know more about OKRs then please reach out to me directly.
About the author
Jonathan is a Senior Delivery Manager at the FT.