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Tips for Writing Better OKRs

Objectives & Key Results is a management methodology famously known as the engine behind the explosive growth of many Silicon Valley start-ups including Google and LinkedIn. OKRs provide a framework for focusing on a handful of highly impactful Objectives and achieving them following specific and measurable Key Results.

An effective OKR is both unambiguous and actionable. It includes an objective plus 3 – 5 key results. A good objective needs to be inspirational and challenging, while the key results need to be specific, measurable and time-bound. An OKR that isn’t written well is hard to communicate and even harder to achieve.

Difference between Objectives & Key Results

Understanding the difference between Objectives and Key Results is the first step towards writing clear and effective OKRs.

Here’s a link to an introduction to the OKR methodology and its history.

Objectives

Following the OKR methodology, your Objective needs to be both deliberately challenging, ambitious and impactful.

I find it easy to understand and explain abstract concepts, such as OKRs, using examples. So, I’ll use an example here as well.

Let’s say I want to learn how to bake my wife’s favourite strawberry pie from scratch for her birthday. In this case, it’s Fazer’s Café style Strawberry Pie with Vanilla Custard filling.

Objective: Bake one Fazer’s Café style Strawberry Pie with Vanilla Custard filling from scratch.

Knowing how much she enjoys that pie, I know she’ll appreciate it (impact) and it’s a sufficiently challenging objective considering my own baking skills (ambitious).

Key Results

In the OKR methodology, your Key Results are specific, measurable and time-bound milestones that lead you towards your objective. Since I’m baking a pie, I’ve decided to commit to 5 Key Results. (For every objective you can set between 3 – 5 key results.)

  1. Find the right recipe for a Fazer’s Café style Strawberry Pie with Vanilla Custard.
  2. Get all fresh ingredients including strawberries, raspberries and blueberries berries.
  3. Bake the pie base with the right consistency and flavour.
  4. Prepare a flavourful vanilla custard using real vanilla pods and jelly topping from scratch.
  5. Pie must be ready at least 24 hours before the birthday.

I’ll use this example later on.

Practical tips for writing good OKRs

In this article, I will share tips on writing effective OKRs inspired by Google’s OKR Playbook [PDF].

Let’s start with some tips on writing a good Objective.

  1. A well-written objective expresses goals and intents.
  2. A well-written objective is aggressive yet realistic.
  3. A well-written objective is tangible and unambiguous.
  4. A well-written objective clearly communicates its impact on your business.

Next, we’ll take a look at what makes for a good Key Result.

  1. A well written key result expresses a measurable milestone which when achieved will advance towards the objective.
  2. A well written key result describes an outcome, not an activity. Avoid words such as ‘analyse,’ ‘help,’ ‘participate,’ or ‘meet,’ instead use words such as ‘deliver,’ or ‘publish,.’
  3. A well written key result always includes a deadline.
  4. A well written key result must also state the desired outcome or end result. For example, instead of just stating ‘Book more sales meetings,’ you should say ‘book 5 more sales meeting this month.’
  5. A well written key result ideally includes both qualitative and quantitative metrics. For example, instead of stating ‘Get 10 new customers.’ you should say ‘Get 10 new customers (quantity) with an average order value of 50 € (quality).’

Let’s use my example OKR for baking a Fazer’s Strawberry Pie with Vanilla Custard filling for my wife’s birthday and see how it fares against the OKR writing guidelines.

Objective: Bake a Fazer’s Café style Strawberry Pie with Vanilla Custard filling from scratch.

Includes a specific goal/intentCheck
It’s aggressive yet realisticCheck
It’s tangible and unambiguousCheck
Clearly communicates its impactCheck

Let’s look at the Key Results the same way.

Expressed as measurable milestones. Check
Describe outcomes, not activities.Check
Includes a deadline.Check
State the desired end result.Check
Include qualitative and quantitative metrics.Check

Or at least that’s what I think. Do you think my OKRs hit the mark?

Common mistakes to avoid when writing OKRs

Well written OKRs is just the start. You also need to put the same amount of effort in communicating them to your team.

The good news is that as you and your team get better at stating and achieving OKRs your process of creating them will improve at the same time.

Here are some common mistakes that crop up when writing OKRs . Avoiding them will help you improve communication and remove ambiguity.

OKRs that are Business-as-usual

Writing and committing to an OKR based on how easy it is to achieve. This is a very common mistake that teams often make when getting started with OKRs.

The usual rationale is believing that you’re starting small. That’s folly. Committing to an objective that isn’t sufficiently challenging won’t prepare you for achieving more ambitious goals in the future.

OKRs without a clear destination

An OKR that doesn’t specify a clear and specific destination often leads to nowhere. I’ll borrow a famous sentence from Alice in Wonderland.

“If you don’t know where you’re going, any road will take you there”

Lewis Carroll

Stating an OKR such as ‘Improve customer satisfaction.’ doesn’t tell you how and by how much. This objective has no clear destination. Instead, a better OKR will be to ‘Improve NPS to 70+ for all existing customers by [date].’

OKRs that enable Sandbagging

In management ‘sandbagging’ happens when a team deliberately sets lower expectations with an intent to deliver better-than-expected results. This is a common practice in many corporate cultures that tolerate managers who want to ‘look good’ by setting a low goal and trying to exceed it.

Thankfully sandbagging has no place in a culture of high performance.

Research proves that teams perform a lot better when pursuing goals that are aggressive yet realistic. High performance and failure are a packaged deal. Encourage experimentation, celebrate failure and proudly learn from it.

OKRs that don’t have any impact

Another common mistake is committing to an ambitious goal even though it doesn’t deliver any real business value.

I’ve seen this type of objective repeated in multiple organisations where a team might get committed to increasing the volume of their mailing list. It’s often sufficiently challenging and requires resources from marketing and development teams.

Still at the end of the day improving the volume of your mailing list isn’t as impactful as increasing engagement per subscriber or average order value per newsletter.

OKRs that include insufficient Key Results

An effective OKR includes both a destination and a meaningful milestones. A common error is writing Key Results which are not sufficient to achieve the objective. It’s a very common error and often made due to lack of knowledge or understanding of the objective.

When committing to an ambitious objective you might not be able to see every possible problem and fail to properly account for skills or resources required. Here’s how you can avoid it.

When committing to an ambitious OKR always openly and honestly discuss with your team if you will be able to achieve your objective in time by accomplishing every single key result. If not then it’s better to reevaluate your key results and avoid wasting time and resources.

The ultimate responsibility for drafting, writing and committing to OKRs fall on the team leader. In my experience getting more confident as setting effective OKRs takes practice. However, your job is made easier if you adopt and practice managerial discipline for OKRs.

Evaluating OKRs

You’ve followed the advice for writing effective OKRs, you’ve avoided every mistake and you’re getting ready to share your Objectives and Key Results with your team. Before pressing send on that email, use this quick list to quality check your OKRs.

  1. How long did it take you to write down your OKRs? OKR selection and evaluation on average can take one month. I’d be cautious if it took you less than that to finalise your OKRs. (You can read this article to discover an OKR Cadence that works for you.)
  2. How many sentences did it take for you to describe your objective? An effective, well deliberative and well-written objective should be more than a sentence. If you have more than one objective then each objective should be communicated in one sentence each. Objectives that take longer than a sentence are often ambiguous and lead to misunderstanding.
  3. How well are you measuring your key results? A good key result includes both qualitative and quantitative metrics for evaluation. Often when key results are quickly jotted down they end up missing one or the other metric.
  4. Does everyone in your team understand the metrics? Metrics are funny things. Often the same metric could mean different things across different teams or even the very same metric across different time frames lead to very different results. Make sure that you provide a definition for the metrics you include in your OKRs.
  5. Do your key results include one or more specific deadlines? Key results need to be time-bound even if your objective isn’t. A key result without a specific date as a deadline is headed for an unscheduled delay.

Main points

OKRs is a team sport. It’s the team leader’s responsibility to address and eliminate any ambiguity or misunderstanding around the core objectives the team must deliver on. Communication and trust are the bedrock of high-performance teams.

When writing and committing to OKR keep these tips in mind.

  1. An effective OKR includes both an ambitions objective combined with time-bound and measurable key results.
  2. A well-written objective clearly communicates an ambitious goal and its impact on the business without any ambiguity.
  3. A well written key result is result-oriented, time-bound and includes a qualitative and a quantitative metric for evaluating success.
  4. There are some common mistakes that often creep into your OKRs. Knowing what they make it easy to avoid them.
  5. Writing good OKRs takes practice. The best practice when writing OKRs is to check their quality and substance against simple evaluation criteria.

What is the Best Frequency for Evaluating OKRs?

Deciding how often you should evaluate your progress is a crucial part of getting started with the OKR methodology. The most commonly used OKR evaluation cycle or cadence is weekly or monthly check-ins with quarterly and annual review. While this approach works for most organisations, it may not be the best option for you.

In this article, I’ll walk you through the process of finding an OKR cadence that works the best for you.

What is OKR Cadence?

The OKR framework delivers multiple tools for performance management. Perhaps the most powerful of these tools is limiting the number of goals you can commit to during a year and using qualitative and quantitative metrics to measure progress towards them.

OKR cadence determines how frequently you evaluate your Objective and Key Results during an OKR cycle.

In the OKR framework, the best Objectives are inspirational goals. Typically a deadline for completing an organisational objective is one year but in some other cases, a deadline may not apply. For examples Google mission to ‘Organise the world’s information and make it universally accessible and useful.’ isn’t necessarily a time-bound objective.

On the other hand Key Results need to be both measurable and time-bound. Setting an OKR cadence for your team or your company includes setting a time table for evaluating both Objectives and Key Results.

Finding your rhythm

Keep in mind that finding the best OKR rhythm is an iterative process. At the same time setting and evaluating goals too frequently can quickly turn into a massive organisational overhead and in the worst case bring any kind of progress to a standstill.

On the way to figuring out your OKR cadence here are a couple of points to keep in mind.

Goal setting culture

You need to start the process by figuring out how goals are set in your organisation. In most organisations, goals are set for the coming year and teams or business units are tasked to create tactical plans around the organisational objective.

In more sophisticated organisations strategic objectives aren’t kept static. Instead, leadership teams regularly analyse and evaluate current business and market conditions and introduce course correction. In such organisations, specific goals are set on both strategic and tactical levels.

Level of uncertainty

Knowing the level of uncertainty specific to your business or industry also determines how frequently you will need to evaluate your objectives and key results.

A business operating in an industry with a relatively high uncertainty e.g. medical equipment or pharmaceutical may not be able to set long term objectives and might require more frequent evaluations.

On the other hand insurance or utilities, providers operate in a highly regulated environment with low uncertainty allowing them to set long-term objectives with little to no need for frequent evaluation.

Setting your OKR Cadence

I recommend setting specific strategic and tactical objectives. This will make your OKR adoption and alignment go a lot smoother. On top of that knowing your business environment will help you avoid any surprises.

When you’re getting started with OKRs I suggest the following this cadence:

Strategic EvaluationQuarterlyOrganisational
Tactical EvaluationQuarterlyOrganisational
Mid-Quarter EvaluationMid-QuarterTeam
Monthly Check-upMonthlyTeam
Weekly Check-inWeeklyTeam

Quarterly evaluation

A quarterly evaluation is when you check progress and evaluate organisational Objectives and Key Results. This is the time to determine if an Objective is carried into the next cycle or not. If it’s not carried forward then this is the time when it’s replaced.

Mid-quarter evaluation

I recommend using a mid-quarter evaluation where the individual teams are asked to check their progress and evaluate their own OKRs. If there are any weak points in the organisational OKRs, whether it’s the objectives or specific key results, this mid-point check will bring them to the surface.

Monthly & Weekly sessions

Finally, use monthly and weekly sessions where team leaders or appointed OKR coaches can discuss progress within individual teams. The purpose of the check-in and check-up sessions is to ensure that people are following through with OKR correctly.

OKRs aren’t a macro to-do list

I mentioned earlier that your objectives might be strictly time-bound or your industry might have high uncertainty forcing you to use a much shorter cadence. If that’s the case then you can switch to a quarterly evaluation. I’ll recommend sticking to the monthly and weekly check-in sessions.

If you decide to increase the frequency of evaluations and/or check-in please remember this simple rule.

OKRs are not another way to manage your to-do list.

Your objectives and the related key results must deliver a measurable business impact. If your objectives or key results start looking like a to-do list and your check-in sessions turn into a Scrum then it’s time to go back to the drawing board.

Should you use multiple cadences in the same organisation?

In some organisations, it’s common to have a shorter cadence for the development team and a longer cadence for the sales and marketing teams. Again the level of uncertainty and the type of goals are at play here. Although managing multiple schedules can quickly become complicated and might even require extra resources to manage.

I sincerely recommend sticking to the same cadence across all teams.

Main points

In previous articles, I’ve shared why I got started with using OKRs and the mistakes I made during the initial adoption phase. I hope that reading about my experience might save you from repeating some of the mistakes I made.

  1. Quarterly and Yearly OKR Cadence is not a rule.
  2. Your OKR Cadence should depend on your business and your objectives.
  3. Setting specific strategic and tactical objectives is better than setting only high-level strategic goals.
  4. Your organisation’s goal-setting culture and your business environment are crucial factors in finding your OKR Cadence.
  5. I recommend using a quarterly, bi-quarterly, monthly and weekly evaluation + check-in frequency.
  6. Do not increase evaluation frequency so much that OKRs become a daily task list.
  7. Finding your cadence might require some trial and error. Be smart about how you use this process because too much evaluation quickly becomes a major organisational overhead.

4 Managerial Disciplines for Successful OKR Adoption

This is the story of where I went wrong when I first started using Objectives and Key Results and what I learnt from my experience. After the initial setback, I went back to the 4 managerial disciplines or the Four OKR Superpowers necessary for a successful OKR adoption.

Two biggest mistakes I made

If you’re interested, I’ve also written about how and why I got started with OKRs. Right at the start of adopting OKR as our way of working, I made two crucial mistakes that set us back.

Skipping proper orientation

The very first mistake I made was not making enough time to properly introduce and orient my teams to the OKR methodology.

OKR adoption and on-boarding is a crucial first step. ‘Time is money’ is a fact when you’re working at an agency. In the spirit of saving time, I skipped this crucial step hoping that we’ll fill in the gaps as went along. That was a mistake.

I made these two mistakes that you should avoid.

  1. I skipped proper onboarding.
  2. I didn’t provide guidance as an OKR coach should.

People can be wary of new things especially if they see it as unnecessary work. Committing to an OKR cadence means making time for conversations, reviews and of course, measuring progress. Without knowing the benefits OKR adoption in my team was lukewarm at best.

Setting only top-down OKRs

OKR is a collaborative way of working and in some organisations, it might also require a culture change. Without your team’s opt-in you can’t hope to make any real progress no matter how determined you are.

Having ‘saved time’ by skipping over a proper orientation lead to my second big mistake – not involving my team in setting their own OKRs.

Once I had set OKRs for my Business Unit, I passed them on to my team as OKR for individual Growth Leads and specialists. The end results were poor performance and least because of lack of effort. The individual OKRs simply didn’t take priority over everything else that was already on their tables.

Successful OKR adoption needs to be an inclusive process. It simply doesn’t work when managers set OKRs for the whole team and pass them on as a to-do list.

Four OKR superpowers

John Doerr described the following four features as OKR Superpowers but I’ve come to think of them as four crucial managerial disciplines that I’ve had to develop. Even if you’re not adopting the OKR methodology, these disciplines will help you build and lead a high-performance team.

These are the 4 OKR Superpowers:

  1. Focus and commitment to priorities.
  2. Align and connect for teamwork.
  3. Track for accountability.
  4. Stretch for amazing.

Even after the initial setbacks, we didn’t stop using OKRs. Knowing that we were not moving in the right direction I went back to the basics.

Here’s what I had to learn and improve.

Focus & Commitment to priorities

Identifying your highest priorities can be challenging especially when you’re limited to focus on only 1 to 4 Objectives per year and only 3 – 5 Key Results per quarter.

Narrowing your selection means you can focus and commit to getting your most important work done.

In practice, a manager should set her team’s top-level objectives. These objectives are often set with a consultation with your leadership team. Once that’s done it’s time to communicate the top-level objectives to your team and involving your team in setting roughly 50% of their individual OKRs.

After OKRs for a cycle have been agreed they should be openly shared with the rest of the organisation and publicly tracked and evaluated.

No dictating. OKRs are a cooperative social contract to establish priorities and define how progress will be measured. Even after company objectives are closed to debate, their key results continue to be negotiated.

John Doerr

Align and Connect for teamwork

Ideas are easy. Execution is everything.

John Doerr

Team leaders often describe their individual objective as the team’s collective objective. Having made this mistake myself I’ve learnt that it’s not the best way to utilise your team’s resources.

In an optimal OKR system individual team members, including the team leader, have their own specific Objectives & Key Results. It’s important to remember that it’s your responsibility to align individual OKRs with the team’s objective.

Your chances of success will drastically improve when you start thinking of yourself as an OKR coach rather than a supervisor.

Outside of individual teams when OKRs are openly shared with the whole organisation; team leaders across multiple teams can connect and develop synergies as well.

Track for Accountability

If it doesn’t have a number, it’s not a Key Result.

Marissa Mayer

Research shows that people perform better when their progress is visible to their friends and colleagues. The fact that each Key Result needs to include an objective and measurable metric makes it easy to track progress. That’s simple but on its own it doesn’t promote accountability.

You need to strengthen trust and ensure that your team members know that you’re committed to their development. Accountability works a whole lot better when people don’t fear feedback. Instead, they know that feedback allows them to improve and that they’ll find support when needed.

I recommend committing to weekly check-ins to address any immediate issues and monthly retrospects where objectives are assessed, scored and evaluated.

Stretch for Amazing

‘Hard goals’ drive performance more effectively than easy goals. Second, specific hard goals ,produce a higher level of output, than vaguely worded ones.

John Doerr

Final and in many ways the most difficult managerial discipline to master is setting stretch goals. A stretch goal is an objective that’s deliberately challenging and ambitious. For example, at Google new products are expected to be at least 10X better than existing competition.

A rule of thumb for setting stretch objectives is to focus on gaols meet these three criteria:

  1. High impact
  2. Specific
  3. Within influence

Don’t expect to be great at setting stretch goals from day one and do not worry if you’re not able to reach your stretch goals in your first attempt with OKRs. I’ll share a personal example to show how we use stretch goals in my team.

At the start of the year, we knew that we needed to reach half a million in revenue but instead of setting our revenue objective to be 500 000 we set it at 650 000. At the end of each quarter, we evaluate our progress and adjust our Key Results for the coming quarter. This exercise allowed us to hit our yearly goal at the end of second-quarter!

Aiming for stretch goals allows you to find your limits and come up with innovative ways to go beyond them.

Main points

I’ve benefited both personally and professionally from using OKRs. It’s made me more objective-driven and a better team leader. I know I’ve only scratched the surface and each day I learn something new. I’m passionate about building high-performance teams and OKRs have helped me create an environment where I can promote openness, collaboration and celebrate failure.

Here are the most main points from this article.

  1. Being successful in adopting OKRs requires trial and error.
  2. Mastering the 4 OKR Superpowers or managerial disciplines can help you develop a high-performance team even if you’re not using OKRs.
  3. Discipline #1: Focus and Commit to priorities i.e. only 1 – 4 Objectives per year and only 3 – 5 Key Results per quarter.
  4. Disciplines #2: Align and Connect for teamwork i.e. Instead of setting top-down objectives, involve your team in setting your objectives and openly share them with other teams.
  5. Discipline #3: Track for Accountability i.e. measure your progress using objective metrics and through weekly and monthly check-ups. Use feedback to support and develop your team and promote accountability.
  6. Discipline #4: Stretch for amazing i.e. setting deliberately challenging and ambitious goals will push you to find innovative solutions. Just remember to measure your progress and make adjustments when needed.

History of OKRs – From Peter Drucker to Andy Grove

“Aliyar hates processes.” I heard one of my teammates explain to a new hire.

It was true. I used to hate management by processes. Too much reliance on following processes leads to mediocrity. I’ve seen it happen before and I was determined to avoid it by promoting healthy scepticism and a spirit of experimentation. I’m still not a huge fan of processes but I’ve come to see that all processes aren’t created equal.

Building a high-performance team requires a disciplined approach to managing performance and rewards. Before fully adopting OKRs I had heard about them but I didn’t fully commit to using Objective & Key Results without some trial and error.

Along the way the two management titans that inspired me the most were Peter Drucker and Andy Grove.

Discovering my Way of Working

Processes are tools and as a manager, you can use them to enable your team to excel or stifle inspiration and hold them back.

The most important process an organisation needs to master is how to get its most important work done. I prefer the term Way of Working to describe such processes.

A way of working isn’t just a schematic guide it’s also a culture of shared values.

For me, our Way of Working had to lead towards building an environment which attracted high performers and enabled them to do their best work.

It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.

Steve Jobs

Managing myself

If you want to attract and retain high performers you need to start with hiring and training team leaders who can deliver disciplined management and dependable leadership.

I firmly believe that some managers can grow their teams to match their own competence, while others enable their teams to reach beyond anyone’s individual skills.

I wanted to be the latter type.

As a team leader, my first responsibility was to commit my energy and skills towards the development of my team. Knowing that I’m an overachiever and annoyingly competitive at times, it was my first priority.

On top of that, I like testing new ideas, learning and pivoting as often as it’s necessary. I knew that I needed to find a way to set objectives, evaluate them regularly and optimise without driving my team crazy.

I needed a process and that’s when I first came across Management by Objectives.

Peter Drucker and Management by Objective

peter_drucker

Peter Drucker – Wikimedia Commons

Peter Drucker introduced the inclusive, open, consciences and goal-oriented management practices that we Millennials adore and advocate.

Drucker believed that managing knowledge workers required a more inclusive approach compared to the authoritarian top-down management style common during the mid-twentieth century.

In his book The Practice of Management published in 1954, he popularised his management theory known as Management by Objective or MBO.

A corporation should be a community based on trust and respect for the workers, not just a profit machine.

Peter Drucker

George Odiorne was Drucker’s student and a contributor to his new management theory. He described Management by Objectives – in his book by the same name as:

A process where the superior and the subordinate jointly identify common goals, define each individual’s major areas of responsibility in terms of the results expected from him or her, and use these measures as guides for operating the unit and assessing the contribution of each of its members.

Wikipedia – Management by objectives

Management by Objectives was a revolutionary idea which encouraged managers to involve their subordinates in not only setting common objectives but also deciding the key activities required to reach them.

Management by Objectives inspired a new generation of business managers and leaders. Research published in 1991 showed that CEOs that committed to MBO saw a 56% improvement in productivity versus only a 6% gain where the commitment was low. In fact, many successful organisations such as HP and Xerox attribute their success to their adoption of Management by Objectives.

Organisations that adopted MBO started doing things differently when it came to

  • Reviewing organisational objectives.
  • Setting employee objectives.
  • Monitoring progress.
  • Evaluating results and
  • Giving rewards.

Performance mismanagement

While MBO is an effective approach it also has an inherent flaw i.e. tying performance to financial rewards. While goal setting is beneficial mismanaging performance and rewards can lead to disastrous results.

When this approach is not properly set, agreed and managed by organizations, self-centered employees might be prone to distort results, falsely representing achievement of targets that were set in a short-term, narrow fashion. In this case, managing by objectives would be counterproductive.

Wikipedia – Management of Objectives

Separating performance from rewards

Look at any job ad out there and you’ll see employers looking for people with deep expertise, independent thinking, problem-solving skills, entrepreneurial attitude and willingness to take on greater responsibilities.

Yet many organisations still rely on yearly performance reviews which are notorious for being time-consuming, subjective, demotivating and ultimately useless.

A performance management system is inherently worthless unless it can deliver a subjective analysis of an individual’s i) performance ii) skills and iii) impact on the job.

That’s where Objectives and Key Results come in.

Andy Grove – Father of OKRs

Andy Grove – Wikimedia Commons

Andy Grove was instrumental in transforming Intel into the world’s largest manufacturer of semiconductors. Grove’s management philosophy was influenced by both Peter Drucker and arguably by an essay named The Giving of Orders by Mary Parker Follet written in 1929.

Grove understood that good leadership and not performance reviews was the bedrock for growth. Being aware of the shortcomings of Peter Drucker’s methodology he specifically separated performance towards achieving organisational goals from financial incentives or compensation.

During his time at Intel between 1968 and 1997, he developed, implemented, tested and refined this management method called Intel’s Management by Objectives which later came to be known as OKRs – Objectives & Key Results.

Grove believed in building an environment where execution trumped over knowledge. In his words:

It almost doesn’t matter what you know. It’s what you can do with whatever you know or can actually acquire to accomplish.

Andy Grove – Quote from Measure What Matters

John Doerr in Measure What Matters wrote

The crucial quality of a healthy OKR culture are ruthless intellectual honesty, a disregard for self interest, and a deep allegiance to the team.

John Doerr – Measure What Matters

OKRs not only separated organisational objectives from individual rewards, but his introduction of Key Results also brought the metrics required to measure individual skill, impact and contribution towards the team.

Success stories of Google, LinkedIn and Bill & Melinda Gates Foundation are just a few examples of how OKRs not only push organisations towards achieving their Wildly Important Goals but also lay the foundation for a culture based on meritocracy, openness and collaboration.

Main points

  • High-performance organisations are successful at building an inclusive and collaborative work culture.
  • Organisations and teams that involve everyone in setting goals to get better commitment and results.
  • Having a disciplined approach to goal setting and performance management improves productivity and efficiency.
  • Peter Drucker’s methodology known as Management by Objective revolutionised performance management.
  • Management by Objective didn’t provide a suitable solution for separating performance management from financial rewards.
  • Successful performance and reward management require using objective metrics for evaluating individual skill, impact and contribution.
  • Andy Grove improved on MBO and developed Objective & Key Results at Intel.
  • OKR align individual activities and performance with organisational objectives.
  • OKR measure individual skill, impact and contribution using Key Results.

Introduction to OKRs – Objectives & Key Results

Since you’re here I’m sure you’ve already heard (or read) about how LinkedIn, Intel, YouTube, Bill & Melinda Gates and perhaps most notably Google have used OKRs to achieve exponential growth.

“Culture eats strategy for breakfast.”

Peter Drucker

Beyond delivering growth OKRs has also given them to tools to build a remarkable organisational culture that nourishes performance, collaboration and accountability.

In this article I’ll introduce the OKR management methodology, give examples of good vs bad OKRs and share advice on how you can get started with OKRs.

What are OKRs?

Objectives & Key Results is a management methodology that’s designed to help companies, of any level and at any stage, achieve their most important business goals.

A management methodology that helps ensure that a company focuses efforts on the same important issues throughout the company.

John Doerr – Measure What Matters

We can trace its roots back to Andy Groove who developed and perfected it it at Intel. In his book High Output Management he wrote that the purpose of OKRs is to answer two important questions.

  1. Where do I want to go?
  2. How will I know I’m getting there?

The OKR methodology has two parts.

  1. Objectives
  2. Key Results

Objective

An Objective is your organisation’s most important goal. Achieving this goal has to be fundamental to the success of your business.

Objectives are significant, concrete, action oriented and ideally inspirational. When properly designed and deployed they are vaccine against fuzzy thinking and fuzzy execution.

John Doerr – Measure What Matters

Key Results

Key results are milestones that help you stay your course. Key Results outcomes that are specific, measurable and time-bound leading towards your objective.

The key result has to be measurable so at the end you can look and without any argument say did I do it or did I not do it. Simple. No judgements in it.

Andy Grove – Intel

In summary, Objectives are Inspirational Goals while Key Results are the measurable and time-bound milestones that lead you towards fulfilling your objective.

A well-drafted OKR follows this structure: ‘We will (Objective) as measured by (Key Results)’.

Here you can watch Andy Grove explaining OKRs at Intel’s Organisation, Philosophy, and Economics course, known as iOPEC.

How I started using OKRs

I got my first job in business development right after finishing my undergraduate degree. It was at a rapidly growing business and I was over-the-moon happy about having a paycheck, even if the job wasn’t all that exciting.

Despite losing interest in the job, I was always able to find the motivation to do new things just to see what I could personally achieve and how far we could go as a team. It was really all because of my team leader. He was somehow able to get us to push for more without compromising what needed to be done to manage our day-to-day responsibilities.

After that job, I joined Resolution Media. A few months into the job, I was given the responsibility to build a new service portfolio and lead a small team of two and a half people.

Leading my first team

While I had run businesses before, it was the first time I was leading a product team at one of the leading agencies in Finland. I was ecstatic and sh*t scared at the same time. I had no doubt that we’d succeed but I knew I needed to create an environment where people wanted to do their best without excessive management.

In an agency, billable hours take priority over any internal development objectives. We’re always short-staffed, with a high burnout and churn rate. None of those facts made life any easier.

I knew I needed a different approach to managing my team than asking them to put in more hours or giving up on having any team objectives. That’s when I found OKRs.

At first, I used OKRs to manage my own responsibilities and later scaled it up to my team. During the first full year of leading product development, we exceeded our revenue target by over 200% and trained new people who could represent our offering in their own teams.

I have been using OKRs both personally and as a team leader for over 4 years. I love working in a demanding agency environment and I know what I’ve been able to accomplish wouldn’t have been possible without OKRs.

How did I benefit from OKRs

Objectives and Key Results is a framework. It requires planning, iteration, metrics and open communication. Being a growth marketing consultant working at an agency with other digital marketers, the first three requirements came easy.

Open communication needed a bit of work to establish and actively nourish. That’s where we really benefited following the OKR methodology.

Here’s a list of some of those benefits.

  1. We set shared Objectives for the team with shared responsibility for Key Results. That helped us define our focus.
  2. The fact that we had shared responsibilities despite the differences in our roles brought alignment.
  3. Knowing that our work output is tracked against set metrics regardless of seniority made everyone equally accountable.
  4. The fact that we shared a common objective and appreciated having a competitive streak meant that we tried pushing just a little bit harder. In other words, we set Stretch Goals.
  5. Each of us was only as successful as the team, this meant that individual financial rewards weren’t the root cause of better performance.

Good vs Bad OKRs

One of the common reasons why goal setting goes wrong is due to poorly defined goals. The cautionary tales of Enron and Ford Pinto are well-cited examples of how goals that are too narrow, too specific and missing an appropriate time horizon can lead towards disastrous results.

A good Objective is ideally inspirational and a well defined Key Result must always be measured against a qualitative and a quantitative metric.

For Example:

Objective: Become the most trusted service provider and reach a revenue target of 1 000 000 € from New Business between January – December 2019.

Key Result 1: Send proposals worth 500 000 € per quarter. (Quantitative Result)
Key Result 2: Convert 40% of prospects to customers per quarter. (Qualitative Result)
Key Result 3: Maintain 80+ NPS among new customers. (Qualitative Result)

In the above example starting with the Objective, each Key Result includes a quantitative value (bolded). At the same time, there are two types of KRs. The first KR is purely quantitative e.g. send out proposals worth 500 000 € the remaining KRs are there to measure the quality of the proposals and the customer relationship.

Failing at either one of them will be a failure to accomplish the Objective.

Here’s an example of a poorly defined OKR.

TypeTime Frame
ObjectiveIncrease New Business Revenue.Yearly
KR 1Send new proposals.QuantitativeQuarterly
KR 2Close new deals.QualitativeQuarterly

A poorly defined OKR lacks clarity, measurability, time frame and does very little to ensure accountability.

Measurability combined with qualitative and quantitative types of Key Results is the hallmark of good OKRs.

You can find more examples here and here.

Common mistakes while setting OKRs

The most common mistake when getting started with OKRs is thinking that its a productivity tool. Although organisations using objectives based management see a 56% increase in productivity, benefiting from OKRs requires a cultural change as well as an operational one.

Here’s a list of common mistakes to avoid when getting started with OKRs.

OKRs are not a To-Do list

OKRs are not another way to get things done. The true power of OKRs comes from increased collaboration and alignment across the whole organisation around its most important goals.

Setting too many OKRs

The OKR framework forces leadership teams to narrow their focus and direct resources towards a small number of meaningful and impactful objectives.

Objectives (Yearly)1 – 4
Key Results (Quarterly)1 – 5

Failing at alignment

In principle, leadership teams are only supposed to set top-level or organisational OKRs. Beyond that different functions and teams need to align their key activities around the organisational objectives by setting their own OKRs.

This process of open communication and accountability creates alignment which is essential for succeeding with OKRs.

LevelDescriptionReview Period
StrategicHigher-level and Strategic organisational objectives.1 Year
TacticalShort-term and specific to a function or a team.1 Quarter
OperationalInitiatives usually measured as KR on both levels.1 week – 1 Month

Lack of follow-through

Speaking from experience, adopting OKRs is an exercise in behaviour modification. No individual or group will become more open, more accountable or more collaborative just by filling an excel sheet.

Training, support and follow-ups are an essential part of getting started with OKRs.

It’s recommended to appoint an OKR coach during the transition period. The coach is responsible for helping people set and refine their OKRs as well as openly sharing the progress against them during monthly and quarterly follow-ups.

On average it can take up to 2 quarters to implement OKRs and often a bit longer to get better at setting stretch objectives.

Planning for successful adoption of OKRs

The table below is an adaptation from WhatMatters – the official website of Measure What Matters by John Doerr. It provides a schedule for how you can pace your OKR adoption process and continue it afterwards.

Time FrameOutcome
4 – 6 Weeks before the quarterBrainstorm annual and Q1 organisational OKRs.
2 weeks before quarterCommunicate upcoming annual and Q1 OKRs.
Start of quarterSet and communicate team-specific OKRs for Q1.
First week of quarterSet and communicate OKRs for individuals for Q1.
During the quarterTrack progress and Check-In.
End of the quarterCheck progress and score OKRs.

An OKR score is typically between 0.0 – 1.0.

ScoreStatus
0.0 – 0.6No progress
0.61 – 0.70Some progress
0.71 – 1.0Success

Main points

  1. OKR is a performance management method based on setting Objectives and Key Results.
  2. A good Objective is ideally inspirational while Key Results must always be measurable and time bounds.
  3. To get the best results OKRs must track qualitative and quantitative results.
  4. OKRs isn’t a tool for task management.
  5. The process of successfully adopting OKRs requires both discipline and experimentation.
  6. OKR should be systematically set, communicated and tracked following an organisational calendar.
  7. OKRs are typically scored on a scale of 0.0 – 1.0.

Useful resources

  • Google’s OKR Playbook [PDF] – Link
  • How OKRs are used at LinkedIn. – Link
  • A typical OKR cycle [PDF] – Link

Photo by Austin Chan on Unsplash