Setting effective OKRs

Here at MindGym we love OKRs 💚

OKRs are designed to ensure focus — making sure teams are working on the most important things to rocket the business forward 🚀. They hold us accountable to outcomes while also giving the autonomy to explore and implement solutions.

With that purpose in mind, setting OKRs should start with the company vision or north star — This is the long-term goal everyone should be pulling towards as a company!

To reach this vision, organisations should chase medium-term company goals. These should be prioritised by leadership as the big bold bets most impactful in pursuit of the vision over the coming 12–18months.

Key idea 🔑

Each team’s OKRs must align with at least one of the company goals. When evaluating your OKR, you should be able to answer these questions.

• If achieved, will it positively impact one of the company goals?
• Is it the highest value objective you could pursue in service of this goal?
• Why does it matter for the north star vision?

Agreement on OKRs should be a negotiable two-way street between leadership and the teams.

So what should our OKRs contain?

The Objective is the qualitative part. It’s a bold, ambitious, and motivational statement outlining what the squad is going after in the quarter ahead.

The Key Result is the quantitative part. These are the metrics that inform us (and the business) whether or not the objective has been met.

❗Important: Deliverables themselves are not Key results. Measuring success by what we ship is output thinking.

If your OKR is hit, then it will push the company goals in the right direction towards achieving our vision.

Fictional Example 1

Objective: Transform the self-serve booking process

KR: 80% of onboarded users book their first session within 24 hours (currently 50%)

Business context: More bookings > More demand > More revenue (assuming revenue is a company goal)💰

Fictional Example 2

Objective: Deliver a feedback gathering tool that delights Customer Success

KR1: 90% of sessions have feedback provided

KR2: Cut the time to provide feedback in half

Business context: Tool is more efficient than the existing process. Business will operate at higher margin (assuming efficiency is a company goal)

Guidelines for writing good OKRs

The essentials

• 1–2 Objectives per quarter for each team is more than enough. OKRs are all about focus and we should not spread ourselves thin by going after too much.
• Each objective should have max 3 Key Results, so that we don’t spend too much time measuring and too little time doing.
• OKRs should be challenging stretch goals 💪. At the end of the quarter, hitting 2/3 of our OKRs is a success. Hitting all of them means we weren’t ambitious enough.
• Key Results should be comparative or they lack context and risk being a vanity metric. E.g., “Number of monthly users up by 20%” is better than “Number of users up to 10,000.”
• We must be able to explain which business goal our OKR aligns with and the benefit that the business will see when it is achieved (including why it matters for the vision in a language that commercial people understand)

📊 Tip: When setting OKRs, it’s worth checking in with your Data team to see if we have the tools in place to measure it or if anything needs setting up first.

Extras worth considering

Alongside your OKRs, if relevant to your context, it can help specifying some of the below to provide additional clarity when reporting:

• Weekly confidence levels of hitting the OKR. At the start of the quarter your confidence should be 5/10 ⚖️
• If the OKRs are likely to span multiple quarters based on current knowledge/capacity.
• If the objectives are ‘moon-shots’ or ‘roof-shots’ to manage expectations of likely success.
• When leaders can expect to see the Key Results come through. If your main KR is a lagging indicator, it can help to also include a leading indicator (or signal) in your other KRs to show progress (and even settle some nerves 😬) while we wait for the main one to come through.
• If your OKR has dependencies on other teams. Generally speaking, the OKR framework holds us accountable for business outcomes while giving us autonomy to explore solutions. However it might be that achieving the OKR is dependent on other teams/variables outside your control. Specify this up front to avoid finger-pointing further down the line.
• The team’s phase in the product life-cycle. E.g., In Discovery, things are subject to change — this should be caveated in case a pivot away from the OKR is needed when new information emerges. More on this below….
• Any planned initiatives, experiments, or stepping stones to help meet the OKR.

🏥 What about health metrics? Alongside your OKRs, it might also be worth specifying “health metrics” such as new sign-ups, retention, NPS, CSAT etc to track. This is because while OKRs are fantastic at getting everyone up and focussed, it comes with the risk of neglecting important KPIs that keep the lights on and our business running smoothly.

Common OKR mistakes (fictional)

Objective: Build a coach portal

• KR1: A coach can login to the portal
• KR2: A coach can edit their profile

This is not necessarily a bad Objective and might be exactly what we need. But the Key Results are outputs not tied to any business outcome. Success is binary and not numerical; it either ships or does not and there is no indication of how much the business needle moved following release.

Objective: Continuously improve our eLearning suite

KR: All 40 products from the suite improved.

This looks at face value a good OKR and it might even be the best thing to do, but it’s output thinking in disguise since we don’t know the business impact achieving this OKR would have.

Furthermore, it might be that the usage data shows that the majority of these products are hardly ever sold, and so improving all of them would be a waste of time.

A more suitable KR here might be: 20% account growth from clients where this content is sold.

💡Tips on setting OKRs based on the stage of the product lifecycle

Discovery (problem or solution exploration) 🔎

Discovery is fuzzy and rarely well-defined. When the Objective is exploratory and it’s unclear what constitutes success, then this should be reflected by Key Results that do not fixate on exact numerical targets. Good examples of discovery metrics include:

• Confidence levels that the team can build a solution
• Results from testing hypotheses
• User research findings
• Other leading indicators that validate the proposed solution or show the problem is worth prioritising.

Delivery (solution build phase) 🛠️

Delivery Key Results of a product (pre-MVP) should contain a blend of leading and lagging indicators.

If all our Key Results are lagging indicators then it can be hard to demonstrate success until well after launch. After all, not everyone will use our products right away and there’s value in showing we’re on the right track.

Likewise if we only specify leading indicators, it may not be clear to stakeholders what the end result impact is that the product is trying to achieve.

Continuous enhancement (Post MVP optimisation) 🎯

OKRs for products in the continuous improvement stage are those where business impact will be felt the soonest since the product is often already in flight with users. Specifying Key Results that directly move the needle on the above business goals is recommended here.

📦 A word on milestones and deliverables

As mentioned earlier, deliverables themselves are not Key results and measuring success by what we ship is output thinking.

That said, delivering on milestones is still absolutely necessary so long as (crucially) the solution being delivered has been validated as the highest value deliverable you could pursue in service of the business goal — i.e., sufficient discovery effort has taken place to confirm it’s worth implementing.

But this does mean that deliverables can indeed be Objectives, but they must be validated and complemented with numerical Key Results that show us the impact delivery has had.

Thanks so much for reading this far — You’re great! 😃

Before closing this page, simply check your OKR meets the criteria in our easy-to-use checklist and you’re all set!

✅ Quick OKR checklist

• My Objectives are bold, ambitious and motivational
• My Key Results are quantifiable and are not vanity metrics
• My OKR aligns with one of the company’s goals
• I can explain why my OKR is the most impactful thing my team should go after and why it matters for the vision
• I have checked with the Data team that we have the tools in place to measure my KRs
• I have specified the relevant “Extras worth considering” from the section above to provide additional clarity when reporting
• I have considered the stage of the product lifecycle when setting my OKRs
• I have thought about potential Health Metrics that would complement my OKRs