An Introduction to Objectives and Key Results (OKRs)

Since 2015, Objectives and Key Results or “OKRs have been a powerful part of my coaching and consulting toolkit. A goal setting framework originally pioneered by Andy Grove at Intel in the 80s, they’re now being used by thousands of organisations including Google, Spotify, AirBnB, and LinkedIn and countless others. They drive focus and alignment and provide tremendous clarity around what activities are producing which results.

Overview

In very basic terms, an OKR is simply a big inspiring objective with a few key results (two or three) which will be used to measure the degree to which we’ve achieved the objective. The key results are NOT the means by which we will achieve the objective – an important but subtle distinction!

For example:

Objective This quarter we will create a product that our customers love.

Key Results

We’ll know we’ve done this because we will:

1. Achieve a Net Promoter Score of 70
2. See 10,000 product activations
3. Get 2,000 new sign-ups via customer referrals

This example gives us a clear inspiring objective and three ways to know we’ve hit it (for now). These might not be exactly the right results to prove we’ve created a product people love, but they give us something concrete to go after in this quarter. At the end of the quarter, we’ll see how well we delivered these key results and determine if they’re still the right things to go after. Adjust, and repeat… inspect and adapt.

According to Marissa Mayer, every key result should contain a number. Key Results should feel very ambitions with teams expecting to deliver about 50% at the start of the quarter. Achieving even 70% of a Key Result should feel like a huge success. Consistently hitting 100% means you’re not pushing hard enough.

Teams should check in on their OKRs every week, primarily measuring confidence over progress and finally giving their OKRs a grade from 0 to 100% when they close their OKRs the end of the quarter.

OKRs, confidence scores, delivery scores, and lessons learned should be made public throughout the entire company.

Low scores provide valuable data with which to refine future activities. Is a thing still valuable? Do we have the resources needed to deliver it in the way described?

Traditional goal-setting

Traditional long-range planning and strategy whether for your business or the former Soviet Union, tends to be highly brittle, relying on several critical assumptions:

1. Every step and dependency can be mapped out in detail in advance
2. External conditions will remain fixed
3. The plan will be mostly correct requiring only small adjustments ¹

Traditional goals are set in silos, annually, without much data, reviewed in a relatively cursory fashion at the start of the year and not really followed up on or challenged until the end of the year. Too often, it’s a box ticking exercise which, unsurprisingly, doesn’t provide deep alignment or drive strong outcomes.

Why use OKRs?

OKRs give you a platform for having difficult and productive conversations. If I’m building a nuclear submarine and you’re climbing Mount Everest, we need to talk. OKRs make our goals clear and guarantee that we address mis-alignment.

They give you a way to be extremely ambitious in your goals and also razor-sharp on how you’ll measure success. It clearly links your day-to-day activities with your top-level strategy by weaving your BHAGs and your KPIs into a cohesive system with clear causes & effects.

OKRs clarify for everyone what you’re working on and why, as well as giving you an easy platform to declare what you’re NOT working on.

In the early days of agile software development, it was quite radical to say “working software is the primary measure of progress”. Not meetings held, or requirements drafted or features released. OKRs take this notion further by reminding us that delivering working software (or doing any other activity) is only relevant if it produces actual results for the organisation. And not just any results, but strongly beneficial ones which fundamentally change the game.

OKRs help you centre delivery conversations on outcomes, not outputs. Yes, you still have to deliver projects, maintain services, and execute beautifully, but you now have a new lense to put over your activities to judge whether they’re actually taking you somewhere that you want to be.

OKRs for organisational learning

By anchoring activities in outcomes, we have a direct feedback loop between how we spend our time and what impact we have through our actions. The more regularly and carefully we check in on our OKRs, the more data we get and the more opportunities we have to run safe “experiments” to find out where the leverage is.

Are you ready for OKRs?

It’s easy to get swept up in the excitement of a new framework like OKRs but here are a few things to keep in mind before you jump in.

Do you have a culture of accountability and risk-ownership in your organisation? If teams are used to being told what to do and how to do it, they will struggle to create meaningful OKRs and find them useful in steering their day to day actions.

Do you have a culture of measurability? OKRs are NOT project management. They rely on easily observable, measurable outcomes. If you struggle to get reliable, accurate, timely data and the use it to make clear decisions that affect delivery, you might not be ready to fully embrace OKRs. Consider adding some instrumentation to your operations and looking at some key performance indicators (KPIs) before you dive into OKRs.

Is it safe to fail in your organisation? John Doerr reminds us that OKRs encourage us to “stretch for amazing”. When we’re reaching for the moon, we’ll likely come up short but learn a lot and get much further than we would’ve if we’d played it totally safe. Make sure there’s room to grow and experiment and stretch and fail fearlessly before you pick up OKRs.

Ready to get started?

If you’re ready to get started but not sure where to begin, check out some of my OKR coaching & training programmes or simply get in touch.