OK, OK, OKR
A Straightforward and Digestible Download on Objectives and Key Results
In terms of corporate crazes, the performance management approach known as Objectives & Key Results is right up there with beer fridges and agile teams. More commonly called OKR, it has taken the tech industry by storm.
What it is
Companies apply the OKR framework as a streamlined, more focused way to set and measure goals and outcomes. The concept originated at Intel in the 70s, but started to gain traction when adopted by Google in the early 2000s. By 2015, OKR had reached A-list celebrity status in the business world.
To put it simply, the “Objective” describes what you — as a company, as a team, as an individual — are aiming to do, and the “Key Result” is how you know whether or not you are doing it.
The objective should be a single sentence that is inspirational and qualitative. It should be written in a way that is easy to understand, with words that the team relates to and is excited about — not jargon. The objective should also be time bound. For example, a company may employ an annual “guiding star” OKR that is supplemented with quarterly or monthly cross functional OKRs. (Note: the annual OKR may evolve as needs change and insights arise).
Objective examples:
- Launch an awesome MVP
- Increase the quality of your company’s sales approach
- Become nationally recognized as an industry disruptor
- Revitalize your company’s brand image among millennials
The key result transforms the qualitative objective into terms that can be measured. There are usually 2–4 key results per objective. The key result should be difficult to achieve, but not impossible. As a litmus test, you should have about 50% to 70% confidence that you can achieve a key result. If achieved, the key result should truly be an indicator of progress on the objective.
Although the objective provides the vision, the key results help make the objective actionable — they are the guideposts around which the team will plan, prioritize, and perform.
Key Result examples:
- 40% of users come back to your site 2X in one week
- At least 50% of potential clients respond within 24 hours
- Featured in TechCrunch as a 2018 Company to Watch
- Recommendation score of 8
How to use it
OKRs are top-down and bottom-up.
Team and individual OKRs should stem from the company’s highest level OKRs. This is NOT to say that developing OKRs should be strictly top-down. The top strategic objectives should be fueled by the insights, expertise, and priorities that are often identified from the teams that make up the company. In this way, OKRs trace from the top down, but are informed up and down the organization. Achieving this alignment is critical — employees should see how they contribute to the big picture and leaders should see how each team creates value needed to propel the company forward.
OKRs rely on routine and iteration.
An essential ingredient for successful OKRs is a regular rhythm. The process begins with establishing timebound OKRs (monthly, quarterly) at a defined level (company, department, team, individual). Once this step is complete, there should be a weekly cadence in place to commit and reflect on the stated OKR. The repetition ensures that the OKR stays top of mind and drives daily priorities.
An approach recommended in the book Radical Focus calls for a minimum of 2 meetings each week. On Monday the team reviews the OKR, commits to tasks for the week that’ll help move the needle, and discusses the short-term pipeline (e.g. 1 month) of important actions to come. This meeting is a conversation to support transparency across the team and to make sure everybody is aligned and motivated on the broader objective. It is not a status report or checklist of items.
Then on Friday, the team meets again to discuss results, reflect on lessons learned, and celebrate wins. This “Commit on Monday / Celebrate on Friday” cadence becomes a regular, digestible routine that people can count on to collaborate, learn, adapt, and progress.
Fewer is better. Focus is everything. Failing is unavoidable.
The point of OKR is to strip away the white noise and chaos that can distract organizations and teams. The fewer OKRs, the better — it is acceptable (and even encouraged) to start off with just one company-wide OKR. This OKR may break down into team and individual OKRs, but I’d caution any group or person from having more than 3 objectives.
Do not jam every little thing into OKRs — they do not represent all things the business needs to do, but the one (or few) things that cannot be neglected. They are the most urgent priorities.
If you are concerned that the singular pursuit of an OKR may have unintended consequences, you can put health metrics in place as a guardrail. For example, the OKR may be centered on increasing revenue while a health metric may be employee satisfaction. The health metric is not the key result but is something the team must not harm while striving to achieve the OKR.
Lastly, do not be afraid to fail. In fact, if you always achieve 100% success, you are doing it wrong which is still a failure. Failure is literally unavoidable, and when it happens, it should be a learning opportunity and an indication of how much the team was willing to stretch. As stated in Radical Focus, “The only hope for success is iteration. You track closely what works, and what does not, and you do more of what works and less of what doesn’t. The heart of success is learning.”
What next?
Read Radical Focus by Christina Wodtke. It’s short, sweet, and uses storytelling as a medium to convey compelling, practical career advice.
Apply what you learn to how you see OKRs being used around you — at your company, on a client site, or any future place of employment. If you or those around you opt to use them, do your best to make sure they are used correctly and in a way that inspires. And to be clear — I am not advocating for or against the OKR framework, but I strongly believe it is better to not do it at all than to do it incorrectly.
References:
- Radical Focus by Christina Wodtke
- https://medium.com/startup-tools/okrs-5afdc298bc28
- https://lattice.com/blog/okr-101/
- https://www.perdoo.com/okr/
