According to the famous baseball coach Yogi Berra, ‘If you don’t know where you’re going, you might not get there’.
Brief Overview:
Objectives and Key Results, commonly known as OKRs, are powerful goal-setting frameworks businesses and individuals leverage to achieve desired outcomes. The OKR methodology entails establishing specific and measurable objectives and defining key results that will contribute to accomplishing those objectives.
By dividing large objectives into smaller, achievable steps, OKRs assist individuals and teams in concentrating on critical tasks. The framework also promotes transparency, accountability, and alignment, making it easier for stakeholders to monitor progress and adjust strategies if needed.
Objectives (“WHAT“)are the desired outcomes, while Key Results (“HOW“) are the specific metrics that indicate progress towards achieving those outcomes. The final bit of the framework is the initiatives, which means what (tasks) need to be done (on the ground) to achieve the key results.
History of OKRs:
Following picture depicts the brief history of OKRs:
Pic courtesy – WeekDone
In the following sections, I explained OKRs by covering the best practices, the typical OKR cycle, and an example of OKR.
OKR Best Practices:
- Key Results should measure the impact of work (outcomes) rather than just the completion of tasks (outputs).
- Don’t come up with too many objectives and key results. Three or four key results are sufficient.
- OKRs can be cascaded down the hierarchy, so the key result for a manager might become an objective for his direct report.
- Keep the OKR cadence as a quarter, with a review in between (to be covered in the OKR cycle section below).
- Towards the end of the quarter, we measure the performance of the key results (KR), and it’s not pass or fail. Based on how much we’ve achieved, we can categorise the outcome as RED, GREEN, or AMBER. RED is 0–30%, AMBER is 40–60%, and GREEN is anything above 60%.
- We can also define cross-team OKRs.
- We can divide OKRs into committed vs. aspirational OKRs to keep the teams aligned and focused. Committed OKRs are something that we as a team want to achieve no matter what, while aspirational OKRs are good to have goals we would like to work on in case of conducive conditions.
- Don’t write trivial objectives. OKRs should motivate and challenge the team. Hence, an OKR like optimizing the server memory by 5% doesn’t add much value.
- You should be clear about measuring the outcomes of key results by metrics or numbers. For example, rather than writing “improve the user signup,” we should write “improve the user signup by 20%.”
- OKRs are not set in stone. They need to be regularly reviewed (weekly check-ins, mid-cycle reviews) and potentially adjusted based on learning and changing circumstances.
The OKR Cycle:
As I stated, it’s best to keep the quarterly cadence while working with OKRs. Following is the OKR cycle as suggested by John Doerr in his book “Measure What Matters”.
OKR Example:
I am giving you a straightforward example of an IT support function. It’s a hypothetical situation. For example, I am the head of the support function, and my yearly objective is to reduce the core support headcount by 10%.
Objective: Reduce the core support headcount by 10%
✔️ Key Result 1: Implement an AI chatbot feature by the end of Q2.
✔️ Key Result 2: Analyze support tickets and incidents from the past year and develop an action plan to reduce their numbers by 30%.
✔️ Key Result 3: Enhance end-user training and improve self-service documentation, including FAQs.
It’s important to note that each key result can be an objective for the direct reports, which can be further broken down into sub-key results. For instance, to achieve the second key result (30% reduction in the support queries), we can define lower-level key results such as:
✔️ Automate 50% of manual reports and morning checks by the end of Q1.
✔️ Automate the manual deployment process using Ansible scripts by the end of Q2.
✔️ Create a backlog to address all recurring P1 and P2 incidents raised in the last 12 months.
This is just an example, but I hope it helps you understand the OKR framework.
Recommended Tools or Software for Managing and Monitoring OKRs:
Dedicated OKR Management Platforms: These platforms are specifically designed for setting, tracking, and managing OKRs. They often offer features like:
- Goal setting and alignment.
- Progress tracking with visualizations (dashboards, charts).
- Check-in and review workflows.
- Integration with other business tools (e.g., Jira, Slack).
- Examples: ClickUp, Weekdone, Workboard, Lattice, 15Five, Asana, Betterworks, Peoplebox, Tability, PerformYard, Profit.co, Quantive Results (formerly Gtmhub), Viva Goals (Microsoft), Mooncamp
Spreadsheet Software (for smaller teams): While not ideal for large organizations, teams can initially manage OKRs using spreadsheets (e.g., Google Sheets, Microsoft Excel). However, this method lacks automation and can become cumbersome as the organization scales.
Project Management Tools with OKR Features: Some project management tools have integrated OKR functionality. Examples: Jira (with plugins like OKR Board for Jira), Asana
Conclusion:
As you may have noticed, the OKR framework provides an organisation with clarity, alignment, and accountability. Top organizations like Google, Amazon, Intel, Spotify, Salesforce, and many others have adopted it. OKRs are not limited to the tech industry; they can be applied to any sector. Many organizations from various sectors have found value in this goal-setting methodology.
For further reading, you may read the following books:
- Measure What Matters by John Doerr
- Radical Focus by Christina Wodtke
- High Output Management by Andy Grove
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