OKR Best Practice

Why OKRs?

Short for objectives and key results, OKRs are a collaborative, goal setting framework for companies, teams and individuals. OKRs serve as a foundational operating tool for creating decision making accountability, clarity, prioritisation and for achieving results as the organization scales. As John Doerr, the venture capitalist who helped fund Google, Intuit and Amazon describes;

“They are a management methodology that helps to ensure that the company focuses efforts on the same important issues throughout the organisation”.

There are five main benefits to implementing OKRs:

• Focus and decision making– When setting your OKRs, you are limited in the number that you should be setting. This prioritisation helps everyone makes the right decision and allows you to target specific goals.
• Clarity and alignment – Having the same goals communicated to the whole team ensures that every member can focus on what is important. Aligned goals can act as a common lens through which daily tasks can be viewed, functioning as a guidepost for what you want to achieve on a long-term basis.
• Accountability and ownership – When writing OKRs, commitments are made as to when certain targets will be achieved to ensure that schedules and resources can be adjusted to make sure they are delivered.
• Transparency and collaboration – The commitments that are made should be tracked transparently, with each team member reporting their own progress. Regularly tracking OKRs via pre-agreed metrics ensures progress doesn’t gradually slip over time. Teams have insight and can support each other to achieve their goals.

How to write OKRs

OKRs are two-part statements consisting of Objectives and Key results, helping define quarterly goals at every level of the company.

How To Write Good Objectives

Objectives can be set on various different levels within the company. They could be company-wide OKRs, such as increasing ARR by 4x, or team OKRs, which for a sales team could be improving the process of new leads.

To achieve clarity of priorities and align everyone in the same direction, two-way communication needs to be carried out before finalising company-wide objectives. This involves both top-down and bottom-up feedback, leading to increased feelings of ownership and more proactive company culture.

How To Write Good Key Results for an Objective

Each objective should have no more than five measurable, time-bound unambiguous results. – how the objective will be attained. By definition, completion of all key results equates to the attainment of the objective.

It’s important to note that key results are not activities that you complete, but rather the outcomes of these activities. Therefore, it is helpful to decide upon specific metrics to ensure concrete results can be obtained. For example, a bad key result would be ‘organise 5 great webinars and increase engagement’, whereas a good key result would be ‘90% of attendees listen to the end of each session’.

General rule of thumb for writing key results:

• Make sure key results are measurable; ‘improve sign ups’ would be a poor key result, whereas ‘improve daily sign-ups by 25% by May 1st’ is much better.
• Write at least two but no more than five key results
• Make sure to decide upon metrics which can be used to track progression
• Each key result should have an initiative or action plan driving to achieve it

Key results tend to be categorized into two types of indicators:

It can be useful to use a mixture of both lagging and leading indicators, which will complement each other and allow you to be able to make rapid adaptations whilst still tracking progress towards your long-term goal.

The first few times you write your key results, you will have realizations such as ‘we should have used a different metric to the one we used before’ or ‘one team understood the objectives differently to another’. These are important lessons to learn from to continually adjust the next OKRs.

Typical timescales and tracking

Annual vs Quarterly OKRs

One of the major aspects of writing OKRs to make them accountable is the setting of clear-cut timeframes. For this reason, writing shorter term OKRs that support annal OKRs and longer term strategies help drive the actual work and keep annual plans up to date and honest.

While there is no absolute time frame that has to be used, quarterly objectives normally give enough time to deliver valuable outcomes. This gives teams a chance to review what works best and adjust or respond to changes in the real world. However, this is not set in stone. For example, it may be necessary for an engineering development team to have 6-week OKR cycles to keep in line with sprints. The best OKRs are the ones which fit the context and culture of your business.

Tracking OKRs

To build a culture of accountability, install continuous reassessment and honest and objective grading. This should start at the top – when leaders openly admit to their missteps, contributors are more likely to feel freer and take healthy risks.  This can be done by:

• Grading – At the end of each cycle, OKRs should be scored as a self-assessment on a scale of 1-10:
• The score for the objective is the average of the key results
• A score of 7 should be considered your target, implying the objective has been achieved
• Scoring a 10 is very aspirational, and should excel your expectations
• Regular check-ins - To sustain high performance, using the OKRs in weekly one-on-ones keeps the focus on achieving the KR’s.
• Revisions - As conditions change, it is encouraged to revise, add or delete OKRs as appropriate – even mid-cycle. It is counterproductive to hold on to irrelevant or unobtainable objectives.
• Feedback - Once the cycle has ended, it is important to gain feedback via ‘retro’ meetings to adjust focus areas for the next cycle. This should ask questions such as:
• What did we learn?
• What worked and what didn’t?
• How did the OKRs impact individual and team behaviors?

Creating a timeline of key events for when OKRs need to be set and reviewed helps keep the process on track. This starts with a high-level timeline of the whole year, with annual company OKRs being set before the first quarterly ones. Here is an example of an OKR timeline:

Tips for starting out

When first implementing OKRs it can seem daunting, with a lot of new terms and measurements seeming unfamiliar or foreign. Here are some tips as a guide to help implement them for the first time.

• Commit for at least 12 months – Once you’ve started using OKRs, it can take a full year for them to be fully effective. Committing for at least a full annual cycle allows for consistency between forecast and results to be seen, and so embeds OKRs into the organisational structure.
• Align the ‘why’ – In order for organisational change to occur, it is important to ensure all members understand why they are carrying out these processes. Taking the time at the start to explain why OKRs are being implemented, training team members in how to do them and setting up structures for OKRs to be reviewed helps drive long term adoption.
• Start out small – When first implementing OKRs, it can be helpful to set achievable rather than unrealistic objectives. This helps to bank some early wins, foster encouragement within teams and allows everyone to accept the value of OKRs.
• Share chosen KR’s – To achieve alignment and collaboration between different teams, it helps to have them look at each other’s roadmaps to include similar metrics in their key results. For example, product and engineering seeing when each other are expecting key features to be shipped.
• Less is more – A few extremely well-chosen objectives impart a clear message as to what to say ‘yes’ to and what to say ‘no’ towards. A limit of three to five OKRs per cycle tends to be the ideal.
• Cohesion – To promote engagement as well as make sure that everyone’s individual OKRs link to the company goals, teams and individuals should be encouraged to set their own OKRs in consultation with managers. Having OKRs set solely from the top down corrodes motivation.
• Transparency is key – When writing and tracking your OKRs, visibility of everyone’s objectives is very useful. This helps in making sure everyone is aligned and accountable.

Change and adapt –

This is not about creating a rigid framework, but rather a guideline for what you want to achieve. Don’t worry about changing the goalposts if something new comes up, in fact the more able you are to dynamically respond to events, the more successful you are likely to be.