In 1968, Intel CEO Andrew Grove used the Management by Objectives theory as the foundation for developing “Objectives and Key Results,” also known as OKRs.
Over three decades later, in 1999, Google adapted OKRs, which helped them scale from 40 to over 60,000 employees. They published their OKRs Guide on re:Work.
Today, many businesses embrace the OKR methodology by customizing the framework to their needs. These companies include Adobe, Google, Dropbox, Intel, LinkedIn, Amazon, Salesforce, Twitter, Netflix, The Gates Foundation, LinkedIn, Walmart, and many others. In this article, we will introduce you to OKRs, discuss how to implement and use the methodology, and share a pre-built OKR template.
“OKRs are clear vessels for leaders’ priorities and insights” – John Doerr | Author of Measure What Matters
“OKR” stands for Objectives and Key Results, where Objectives are time-bound goals that individuals, teams, or companies wish to achieve, and Key Results are measurable milestones defined under each set objective that directly contribute to the objectives.
A typical OKR reads like this: “I will reach the following [Objective] that will be quantifiable by the following outcomes [Key Results].”
This basic framework can be used by all sorts of teams for a variety of tasks and objectives. A business development team, for example, might establish an OKR like this: “We will develop a stronger partner network in Europe by signing 3 new partners this quarter.”
KPIs, or Key Performance Indicators, help companies, teams, and individual team members determine whether they are progressing toward their goals.
KPIs are standalone measurements used within a larger framework, such as an OKR. OKRs, in turn, provide context to your KPIs.
OKRs are designed to help drive the company forward by focusing on strategic initiatives.
Deloitte recommends not having more than 3 - 5 objectives for a period of 90 days, each with 3 - 5 measurable key results and weekly checkpoints to track progress. Each OKR is reviewed quarterly.
According to Product School’s interview with Airbnb’s product lead Jiaona Zhang, OKRs play a crucial role in measuring the success of their products. While the management sets the objectives, teams have the autonomy to decide on their plan of action to reach their goals.
“What I’ll add is that it’s critical to get alignment on the O,” Zhang said, “Then with the KRs, you need to feel confident that those are the right levers to get to your objective.”
In their OKR philosophy, The Guardian describes the stakeholders and systems they use to grade the OKRs. Their OKRs are centered around increasing readership and improving diversity and journalistic standards.
You can start creating custom OKRs for your team by using Spreadsheet.com’s OKR template. It’s designed to help with goal-setting by documenting objectives, defining key results, assigning stakeholders, and tracking progress.
Additionally, you can visualize your OKRs progress in the template’s shareable dashboard:
The use of OKRs can result in multiple benefits. Organizations can the methodology to:
As with everything, planning is critical to the successful implementation of OKRs. You can roll out OKRs in your organization by following these three steps:
Provide examples of other organizations that use OKRs. Showcase how these companies use the framework to improve and achieve their goals.
For example, you can reference the former CEO of Twitter, Dick Costolo’s quote:
“The thing that I saw at Google that I definitely have applied at Twitter are OKRs - Objectives and Key Results. Those are a great way to help everyone in the company understand what’s important and how you’re going to measure what’s important. . . . OKRs are a great way to make sure everyone understands how you’re going to measure success and strategy.”
Despite the relative simplicity of OKRs, hosting an OKRs workshop and sharing an OKRs template can significantly shorten the implementation process.
Here are a few learning resources you can use:
With time, you should be able to develop custom OKR resources that correspond to your company culture and working style.
By de-emphasizing specific tasks and focusing on the value those tasks deliver, OKRs make for a powerful tool. Here’s a 3-step approach to implementing the framework:
Set – Create actionable yet ambitious goals. Note that this is not a list of activities, but rather a list of measurable goals.
Align – Set shared OKRs with your team, and map out vertical and cross-functional interdependencies.
Achieve – Although many businesses adopt quarterly OKRs cadence, include OKRs in your daily workflows and review progress weekly. As needed, adjust corresponding initiatives to continue to progress towards your goal.
Share relevant resources, collaboration tools, and tools like Spreadsheet.com’s OKR template. The template allows to quickly customize goals and objectives and includes dashboards for visualizing progress toward the objectives.
Based on your overall company objectives, ask your team: What do we want to achieve?
Help them to come up with stretch goals rather than fixed plans. These goals should be actionable and specific.
Agree on 3 - 5 objectives per team member for every quarter.
After deciding on objectives, ask your team: How do we know we got there?
Then identify around 3 relevant and measurable results for every objective.
Encourage your team to own their objectives and track their key results.
Keep OKRs on track
Design an OKR measurement system that helps you measure your team’s progress towards their key results. Google recommends a grading scale of 0–1.0, where 1.0 indicates a fully-successful achievement towards the objective.
Set a follow-up frequency for reviewing your team's progress. If needed, make adjustments in workflows to meet the objectives.
Plan a retrospective session at the end of the OKR cycle. Gather feedback from your team to see how to improve the performance in the next cycle.
Note that although OKRs need to be measured, they are not designed as a performance evaluation tool. Rather it's a way of summarizing what a team member has worked on and how it contributed to the overall organizational goals.
Not setting the right OKRs could render the goal-setting framework ineffective. Here are a few common mistakes to watch out for:
Encourage your team to set OKRs that will help achieve new company milestones. Specify high-value stretch goals, and remember that sandbagging doesn’t jive with OKRs.
Assess resources and talent availability for realistic goal setting. Also, allow room for delays in your OKR planning.
OKRs should highlight what is strategically important to the organization.
Having too many goals may indicate a diluted organizational strategy and lead to the team losing focus.
Developing OKRs using best practices empowers teams to work together towards achieving impact. Achieve new business milestones with Spreadsheet.com’s OKR template.
