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These days, I hear and read a lot of heated discussions about objectives and key results (short: OKRs). I’ve worked for companies that do a great job using OKRs, and others that are very dysfunctional when it comes to implementing them. Maybe you can relate to one of these scenarios. 😉
Before I began working with OKRs I was biased because of other people’s opinions. Obviously, I listened more to the negative feedback than the positive.
When I worked with OKRs in a large-scale company I really started seeing the benefits of good OKRs and a good process surrounding it. These days, I help Product Managers and Leadership teams to establish and improve their OKR processes with great results. In this article, I’d like to share some basics and best practices that’ll help you to improve your OKRs.
OKR is a (goal management) framework that helps companies to better execute their strategies. OKRs are most commonly defined on a quarterly basis (a 3-month cycle). This framework was invented by “The Father of OKRs” Andy Grove in the 70s. Later, the company Google implemented this framework very successfully and grew times 10x and more. The main idea of this framework is to align people company-wide and to work with a focus on defined goals. OKRs can be used on a global as well as a department and/or team level.
An objective is a goal that you want to achieve. It expresses the “what” and is aggressive yet realistic. It’s tangible and clear and it should be obvious to an “outsider” whether an objective has been achieved or not. And most importantly, objectives must deliver clear value to your company. Not your ego!
A key result is related to an objective and represents the “how”. It’s a measuring factor when it comes to the milestone, or the goal (objective). An objective should ideally have a maximum of 5 key results.
Let’s look at a simple example:
O1. Get Started on YouTube With the “Coaching Program”
KR1. Choose and do two online training courses on “YouTube optimization”
KR2. Our YouTube channel has been fully set up
KR3. Best camera equipment bought and set up by [date]
KR4. Three videos have been published by [date]
Note: The phrasing of your OKRs depends on many factors. If you’re, for example, a bigger multi-product company the term “coaching program” can be too vague. I need to admit that this example was a personal one of my own. 🙂
Besides the company size, there are many more factors that impact the quality of an OKR. Let’s look at the 5 best practices that’ll help you with defining good OKRs and avoiding common mistakes.
Since you define OKRs on a quarterly basis, it’s important to be aligned and on the same page. A period of three months is quite a long stretch of time.
On many occasions, I saw individuals and teams defining OKRs and then ending up in endless discussions and post-adjustments. That’s, by the way, the opposite of what the process outcome should be.
Most importantly, you need to align people with the overall strategic goals of your company. Therefore, everything starts with the big picture, vision, and strategic direction in mind. Before I, for example, jump too quickly on writing down the “most urgent” goals, I take some time to think about the following questions:
There are for sure many other questions you could consider beforehand. These kinds of questions can help you to look forward, to get creative, and to look around at what others are doing. Depending on your company size and structure, some objectives may require contribution or help from/with other teams.
You can save a lot of time in back and forth by aligning your OKRs with other teams. That is if the whole company/all departments follow the same process.
You can read more about it here: A practical guide to optimizing your OKR planning
… not business as usual.
Every OKR you commit to should be something bigger than day-to-day tasks you would do “anyway”. As mentioned above, OKRs should be aggressive and bold. If an objective isn’t bold or not something you really want to achieve why would you define it in the first place? Google calls these “Low-Value Objectives” or “Who cares OKRs”.
If you want to define awesome OKRs it’s important to know the difference between aspirational and committed OKRs.
A Committed OKR is something you really need to achieve. That means you’re absolutely committed to achieving them 100% and willing to adjust schedules and allocate all needed resources to achieve them. Do you remember back in the day when GDPR was introduced in Europe with a hard deadline? In a case like this, a GDPR-related objective is a committed OKR.
An Aspirational OKR is something you want to achieve. Even if you don’t know exactly how. This kind of OKR reflects the goals you as a company believe in and that supports the company vision. Such OKRs are normally achieved to about 70% with a high variance.
Is it “bad” to not achieve 100% of an aspirational goal? 🤔
Absolutely not! I saw many instances where Product Managers and Leadership teams set goals lower to make sure they’d be hit. The reasons were to keep teams motivated or make sure we stay on track or “under-promise, over-deliver”. That’s not the intention of OKRs at all. The idea is to set high and achievable goals that motivate people.
Let’s look at an example outside of OKRs.
If your boss tells you to produce 10% more output, you’ll likely produce 10% more output. Or just 8 to 9%.
What if your boss tells you to produce 100% more output? If you “only” achieve 70% that wouldn’t hit the goal but would still be a big achievement.
If you set the goals to be ambitious but tangible, it‘ll have a positive impact on the process of finding a solution. You‘ll think differently if you want to increase your output by 10% vs. 100%. People become more creative.
When starting with OKRs it’s especially important to share how it works with everyone in the company. Not achieving 100% every time isn’t a failure and it’s all part of the game.
Note: If you never achieve any of your OKRs or are always below 50% you should rethink your goal setting. Retrospectives can help a lot in such cases.
Here’s a great quote to summarize the paragraph:
“We don't fail because we aim too high and miss. We fail because we aim too low and hit." – Les Brown
Thinking of good goals and ways to achieve them isn’t always easy. In order to come up with the best OKRs, I’ve learned that it always helps to do it with a team and not as an individual. How would you feel if your boss or Product Manager came out of their office and told you what you have to focus on during the next three months, without ever involving you? If you want to create very good OKRs I recommend involving your team members as early as possible. That requires good preparation.
Let’s say you define OKRs four times a year for three months. In the 3rd and last month of the quarter, it’s time to start thinking of a new set of OKRs. The tricky part is that you never know 100% if you’ll achieve the current OKRs or not. It might be the case that they’ll slip over to the next quarter. Nevertheless, you and your team should continue the routine of defining new OKRs.
As a Product Manager, for example, it’s part of my job and ownership to do and plan the best for the product and company. Therefore, I create a document that I share with my team inviting them to start brainstorming new objectives and key results. In case I or we know of committed topics I already add them to the document. I’ve learned that adding a “deadline” for the first brainstorming helps to stay on track and not run late with the whole definition process. After the initial deadline, I schedule a meeting and sit down with my team to discuss priorities and align on the defined goals together. I always remind myself that the whole team commits to the OKRs not only me as PM.
Note: Defining OKRs during Christmas time is the hardest in my opinion because most people are off the second half of December.
Does it take more time to manage larger teams? 🤔
If the company strategy and quarterly company OKRs are clear it shouldn’t. The idea of the OKR framework is to empower teams to autonomously think of solutions to contribute towards the vision. Proportionally, with the growth of team members the time they spend increases. However, the time and money you save because of a good focus and clear alignment are way higher.
Like the “build, measure, learn” approach (Lean startup) it’s important to have a continuous learning cycle. I’ve seen and heard that some companies start OKRs and stop after one or two quarters. I’ve learned that great OKRs don't only require good writing skills. It’s very important to regularly check the status quo as well as to review the results in detail. As mentioned previously, retrospectives can help a lot to reflect on the quality of the goals as well as the phrasing.
My teams and I always held a 1.5-2h retrospective session at the end of the quarter with a facilitator from outside the team. The goal was to understand if the targets were realistic enough, phrased well enough, and for sure we discussed in general how things worked throughout the whole quarter.
We fell quite often into the trap of mixing up outcomes and activities on a key result level. A key result should always define a clear outcome. If a key result starts or contains words like empower, consult, support, or enable… they describe activities, not outcomes which could contain words like release, publish, or finalize...
I want to emphasize patience around the whole OKR framework. It’s not only a framework. It’s a mindset and it takes time until a whole organization applies and lives it.
Keep working and reflecting hard and the reward will be huge. 🏆
BTW: If you’re interested in an OKR planning deep dive feel free to tune in to this podcast episode 🎙️
“The art of communication is the language of leadership.” - James Humes
Communication and leadership start with you, go over your team, spread across the company, and vice versa. When I started working with OKRs I made the mistake of not properly communicating them to the rest of the company. I shared them with the Product and Engineering organization but totally forgot about Customer Success, Marketing, and Sales. All stakeholders want to know what you and your team are doing no matter which framework you use.
Regular status updates within my team always helped me to stay on top of things or at least to be able to react quickly. I personally like taking 5 minutes at the beginning of a backlog grooming to do a quick health check on the OKRs. Thumbs up/down voting if we are on track or not helps a lot.
Communication is also very important when things don’t work as expected. If you and your team realize that the goal you’ve set is not achievable what should you do? In that case, it’s very important that you and your team escalate that ASAP to the rest of the organization or department. Especially, if it’s a committed OKR. It’s never great if things are delayed. However, good transparency and honesty are what differentiates successful from not successful teams and companies.
There are many more things to say about OKRs. No matter how much you read about it, the best way to learn is to do it. If you’re not working in a company that uses that framework try it out personally. 🙂
What are your experiences with OKRs? Tell me what you think on Linkedin.
