OKRs (objectives and key results) are used to define strategies and foster accountability in organizations large and small alike. They help teams make decisions, set strategic context clearly, and create a trusting environment that is oriented towards growth by aligning the team members towards a clear set of objectives in a scaled agile environment. where teams are empowered to where teams can do their best work and drive business results.
Since their introduction in the 1970s by Andy Grove at Intel, OKRs find their roots in Peter Drucker’s Management by Objectives. In the last two decades, it has been adopted by Google – and is generally regarded as one of the reasons that allowed Google to taste success and lead the market in many different categories.
What is the definition of OKR?
OKRs – Objectives and Key Results – are made of two basic parts:
- The objective – a qualitative entity that defines what the organization wants to achieve
- Key results – up to five quantitative values that indicate the progress made on the objective front
How do you write an objective in OKR?
Objectives are qualitative and describe the outcomes the organization expects to achieve during the set time frame – typically a quarter. The generic nature of the objective simplifies the prospect of deriving Key results for different teams that can focus on different aspects of the Objective. If the Objective is to get more subscriptions, the corresponding key results for the sales team can be ‘contact 10 new leads every workweek’ and the development team can focus on ‘reducing the number of clicks to 3 from landing page to registration’.
Some examples of good objectives are:
- ‘Help users love the new solution’
- ‘Get recognized as a thought leader in the SaaS sphere’
By focusing on the future that the organization wants to be in, the leadership team can come up with objectives that are in line with the vision and mission of the organization. Good Objectives are easily understood by all employees in the organization and are devoid of team-specific jargon (or acronyms).
If any concrete ways to achieve the objective pop up, they can be classified as a key result – but only if the team responsible agrees with the observation. Otherwise, these measurements can be presented to the teams as a suggestion.
OKR Examples:
OKRs are fairly simple to understand, but the process of arriving at them is anything but. ‘Be a valued solution for retail organizations’ is a good Objective, and the corresponding key results can take different forms based on the teams looking to achieve it. There is no single right way to define Key results. The development team can interpret the key results as ‘introduce X, Y and Z features that retail customers have requested for in the next sprint’, whereas the customer support team can look at it as ‘reduce the support call duration by 20 seconds by simplifying the feature explanation script’.
Good OKRs have inspiring objectives that are in line with the values of the organization and are supported by definitive Key results that help teams achieve them. Three to five key results are ideal for every objective, which in themselves should be limited to three to five. Here are a few examples of OKRs for formula 1 teams (if they decide to go the OKR way).
Weak OKRs | Average OKRs | Strong OKRs |
Objective: Win the drivers and constructor’s championship in Formula 1 season KR #2: Make pit stops shorter during races. | Objective: Win the drivers and constructor’s championship in Formula 1 season | Objective: Win the drivers and constructor’s championship in Formula 1 season |
Tips to Write Great OKRs
Objectives are inspired by the mission and vision of the organization – and usually represent the first biggest step that can be taken towards achieving that goal. Continuing the example of the Formula 1 team above, if the objective is to ‘become the most decorated formula 1 team in history’, the objective can be to win the upcoming formula 1 season.
Understanding and implementing priorities
Brainstorming ideas is a good way to come up with objectives, and the impact can be high if the focus is on the most pressing task that lies ahead of the team. These can be identified by asking the following questions before the brainstorming session:
- What is/are the most important task/s that need to be completed in the next quarter?
- How can that task be completed in the given timeframe?
- How can we understand that the task has been achieved?
Review the potential objectives
The act of brainstorming is bound to throw up some interesting options, and the process shifts to changing or modifying them based on the immediate tasks. If the statement describes a change that is meaningful and indicates progress from the current situation of the organization, it is a good contender to be an objective. It is clear that business as usual activities can’t feature in this step.
Finding measures to evaluate potential objectives
Previous steps can result in a sizable number of potential objectives, but not all of them can be measured. Improving customer satisfaction can be a good objective, but if there is no way to measure customer reactions (FMCH products without any social media presence/helplines, for example) the objective becomes useless. Leaders can take the help of managers and subject matter experts in this step so that adequate measuring scales are identified.
Conclusion
Adopting OKRs without understanding the basics can cause issues that may alienate employees from their responsibilities, and taking a look at OKR case studies and examples is a good way to start. When coupled with a good understanding of the framework, OKRs can help organizations to achieve their vision.
