Objectives and key results (OKRs) is a framework used to define and track objectives and their outcomes, over a specific period of time.
Companies from Google to Adobe have rolled out OKRs to accelerate growth and drive innovation by helping teams see how their work fits into the overall company’s objectives.
How do OKRs Work?
The OKR methodology is a collaborative, goal-setting framework that helps teams and organisations reach their goals through identifiable and measurable results.
Consider the following structure to write an objective and link it to key results:
We will (Objective) as measured by (these Key Results).
Objective: what you’re trying to accomplish
- Objectives are qualitative, and inspiring, e.g. “Ship an amazing MVP!”.
- An objective can be short or long-term. You might set the deadline to be the end of the year, the next quarter, or even the next month.
- An objective should be hard; the point is to push yourselves as a team or organisation.
Key Results (KRs): how you’ll measure whether you achieve the objective
A KR is measurable and verifiable; there’s always a black and white answer as to whether it’s been achieved.
- Use a metric with a number, e.g. “Grow to 1000 active users in our private beta”.
- Setting around three KRs for a given objective is a reasonable number.
- Assign a specific person to lead the KR and be accountable to its success.
- Completion of all the KRs means you’ve achieved the objective.
Remember, OKRs are meant to be written, rewritten and even scrapped if they’re not working for you. So while beginning from scratch can be daunting, it’s all just part of an ongoing process. Let’s begin!
Creating an Objective
1. Consider your North Star
Objectives come from, and are inspired by, your mission. The mission is usually the big, pie-in-the-sky thing that everyone is working together to achieve. Objectives are the most important things you need to do to achieve that mission. They’re the rallying cries for your team for the next cycle. So take the time to think about your team’s North Star and write it down.
2. Gather your priorities
Let’s zero in on the things that are most pressing for the next 30-90 days by asking the following questions:
- What are the most important things that we need to get done?
- What do we need to start doing or changing?
- What does success look like?
Brainstorm a list of possible objectives. Then narrow it down to the most important three for now.
3. Check your objectives against these statements
See if you can confidently say these statements about all the objectives you wrote down:
1. My objective describes meaningful change from where we are now.
Not quite there? Try stretching beyond “business as usual” for your team. An objective should be audacious enough to describe real growth without being totally unrealistic.
2. My objective is concise and uses simple language. It will inspire my team.
Not quite there? Try shedding some words and boiling down the sentence to the most essential parts. Memorable objectives are inspiring objectives!
Summary of tips for creating objectives
- Objectives need to be clear, inspiring, and easy to rally around.
- Anyone should be able to understand the objective’s aim and motivation at a glance.
- Ask yourself “so what?” or “why would anyone care about this?”.
- Make sure they are actionable, time-bound and ambitious.
- Aim for 3-5 objectives.
Developing Key Results
KRs determine whether an objective has succeeded or failed.
- Use metrics. If you can’t track progress towards your goals, how will you know if you're succeeding?
- Everyone should agree that achieving the KRs would achieve the objective that they relate to.
- Keep it to 3 KRs per objective.
- Quantify outcomes, not tasks. So capture 1000 MQLs and not send updated sales playbook to SDRs.
- KRs should be challenging but achievable. If they're overambitious or not ambitious enough, they will be detrimental to the team’s motivation.
Key Results can be leading or lagging indicators
A leading indicator is a predictive measurement, for example; the percentage of people wearing hard hats on a building site is a leading safety indicator.
A lagging indicator is an output measurement, for example; the number of accidents on a building site is a lagging safety indicator.
Most teams need to consider including both as part of their Key Results. Lagging indicators are only records of the past, they cannot influence or cause any positive change in the future. Leading indicators have a future orientation and make good key results to track.
The performance of a business is measured by taking measurements of both lagging indicators and leading indicators.
Lagging indicators are those measurements that focus on the output
- Easy to measure.
- Hard to improve.
- Examples include customer satisfaction, weight or number of deaths.
Leading indicators, on the other hand
- Hard to measure.
- Easily influenced.
- Examples include usage of a product or service, calories taken per day and the use of safety equipment.