In today’s fast-paced world, setting clear and achievable goals is critical to personal and professional success. Today, there are many different techniques that help individuals and companies set goals and create a plan to achieve them. Among the popular ones are Balanced Scorecard, Hoshin Kanri, MBO (Management by Objectives), V2MOM (Vision, Values, Methods, Obstacles, Measures), KPIs (Key Performance Indicators) and others.
Everyone has goals, but why do some achieve so much more than others? This is usually because people or company who achieve goals faster than the others use a proven, systematic method for setting goals and achieving them. It’s simple — you need an effective action plan.
“Our goals can only be reached through a vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success.”
Pablo Picasso
Today I would like to talk about OKR (Objectives and Key Results) are one of the most popular goal management methodologies used by companies like Google, Netflix, Linkedin, Meta, Spotify and Twitter.
Why do you think this methodology has been so popular for over 50 years?
The popularity of this method is growing because OKRs have their roots in the concept of SMART goals, which are Specific, Measurable, Assignable, Realistic, and Time-Related. Let’s start with definition what even are OKRs.
What is an OKR?
OKRs are a goal-setting framework that helps businesses define and track their objectives and key results. OKRs promote transparency, alignment, and continuous improvement within a company. They help ensure that everyone is working towards common goals and priorities, regardless of their position or department. The OKR framework was popularized by Andy Grove at Intel and later adopted by companies like Google, where it played a significant role in their success. Today, OKRs are widely used across industries and companies of various sizes as a powerful goal-setting framework to drive performance and results. OKRs are typically set on a quarterly basis at level at the company level, and then objectives are set at the levels of departments and teams. To determine OKR, everyone needs to answer few questions.
Cascading vs. Aligning OKRs
When setting objectives and key results (OKRs), organizations often face a choice between Cascading OKRs or Aligning OKRs. Each approach is unique, and the choice largely depends on the culture, size, and strategic goals of your organization.
- Cascading OKRs is the more traditional approach, which takes a top-down approach by setting company-wide goals first, then departmental goals, and finally individual goals.
- Aligning OKRs refers to a more collaborative approach where teams and individuals set their objectives in alignment with the company’s broader goals but do so with greater flexibility and autonomy. The focus is on ensuring that all OKRs across the organization are aligned toward a common mission rather than strictly following a top-down hierarchy.
Each approach has its pros and cons, in order to better understand the advantages and disadvantages of each approach, I would recommend that you read the following article "Use OKRs to Set Goals for Teams, Not Individuals by Jeff Gothelf" on the website Harvard Business Review in Managing people section before making a decision on choosing a strategy.
3 components to consider when setting OKRs
OKR framework divides the goal-setting process into two parts: the objective, which is what you want to achieve, and the key results, which define what success will look like. Or in other words the objective defines where you want to go, while the key result outlines how you plan to get there. But since objectives and results are not possible without specific actions and it’s not mentioned in the acronym, I would suggest looking at this method from the perspective of Objectives → Key Results → Key Actions (Initiatives), these are the specific tactics you’ll use to accomplish your goals.
Objectives:
These are the big goals that define where you want to go. Objectives are the overarching goals that set your direction. Your key results will make these objectives measurable. It’s important to time-box everything and focus on only a few objectives at a time.
Key Results:
These are the measurable outcomes that indicate whether you’re on track to achieving your objectives. Key results are the quantifiable milestones that you need to reach to achieve your objectives.
Key Actions (Initiatives):
Finally, the third component is key actions — these are the specific daily activities you undertake to achieve your key results. You should track these actions regularly and be ready to adjust them if they’re not delivering the expected outcomes. This may include initiatives and tasks.
Difference between OKR and KPI
KPIs are defined as performance metrics that evaluate the success of an organization or a particular activity. KPIs can apply to projects, programs, products, and a variety of other initiatives. They can measure the success of anything from sales goals to social media metrics. Today, KPIs have been adopted by countless organizations and are used to evaluate and forecast success. However, a KPI is only as valuable as the action it inspires.
Objectives and Key Results (OKRs) are defined as a methodology that outlines company and team objectives along with measurable key results that define the achievement of each objective. OKRs represent aggressive goals and define the measurable steps you take towards achieving those goals.
One of the key differences between OKRs and KPIs is the intention behind the goal setting. KPI goals are typically obtainable and represent the output of a process or project already in place, while OKR goals are somewhat more aggressive and ambitious.
OKRs serve as a framework for setting goals that encourage organizations to aim for ambitious results and ensure teams are aligned with strategic objectives. On the other hand, KPIs are used to measure the performance of specific processes or activities, helping to maintain and monitor operational efficiency.
Examples of Objectives & Key Results
For example, as a Product Design Lead, I want to enhance the overall user experience, streamline collaboration with the development team, and drive innovation within the product so that our product not only meets but exceeds user expectations, ultimately leading to higher user satisfaction and loyalty. Let’s try to form objectives, key results and initiatives that will help us realize our plans.
Objective 1: Enhance User Experience Across Core Product Features.
This objective focuses on improving the overall user experience of the product, ensuring that it meets user needs and is intuitive to use.
Objective 2: Streamline Design and Development Collaboration.
This objective is about improving the efficiency and effectiveness of collaboration between the product design and development teams.
Objective 3: Drive Innovation in Product Design process.
This objective aims to foster a culture of innovation within the product design team to keep the product ahead of market trends.
Good vs. Bad OKR Examples
Key Results are a measure of success. They should be measurable, achievable and time-bound, but at the same time they should be ambitious to stimulate growth and development. Writing Key Results is the most important and responsible stage, this is where many difficulties arise for most teams. At first glance, it may look like a process of looking into the future and the need to answer questions about how I see myself and my team in some time, what we can achieve if we put in maximum effort. There are some misconceptions that Key Results are just tasks or actions that are necessary to achieve the goal. In fact, Key Results are measurable results that show progress towards achieving the goal, and not the actions themselves.
For example, “launch a new mobile application” is an action, and increasing user satisfaction with the application by 20% is already a Key Result. I suggest considering an example of writing Key Results using the example of one Objective — Enhance the mobile app’s user experience to boost user retention and satisfaction, and determining what is considered correct and incorrect.
OKR Best Practices
Tip #1: Choose 3–5 Objectives. These should address immediate problems, changes, or desired outcomes, and are better managed on a quarterly basis.
Tip #2: Choose 3–5 Key Results per Objective. These should be time-bound, specific, and measurable.
Tip #3: Use clear and simple language to ensure everyone understands the objectives and key results.
Tip #4: Foster a great corporate culture through effective communication. This helps keep everyone aligned and informed.
Tip #5: Use a project management tool, to merge alignment, accountability, and engagement in one place.
Tip #6: It is okay to only achieve 60–70% of OKRs. If your organisation achieves 100% of its OKRs, they are likely to be too easy and you need to set more ambitious goals.
Tip #7: OKRs are not an employee evaluation tool. In order to have employees feel safe setting ambitious OKRs, they need to know they won’t be negatively impacted if they don’t achieve every OKR.
Tip #8: Review and Adjust OKRs Regularly. OKRs are not static. Regular check-ins (weekly or bi-weekly) should be conducted to assess progress and make adjustments if necessary. Be flexible and willing to pivot if priorities change.
Implementing OKRs step-by-step
Step #1: Start with Clear Objectives (3–5 Objectives).
Use action-oriented, aspirational language that inspires and motivates, and focus on the measurable outcomes you want to achieve rather than the activities or tasks involved. They should motivate and challenge the team, Keep them simple, short, and Make them enjoyable, Avoid using specific numbers.
Step #2: Define Measurable 3–5 key results for each objective
Key results should be quantifiable, achievable, and directly tied to the objectives. You should be able to measure results instead of tracking a list of tasks or deliverables. Break down key results into smaller projects to achieve specific quarterly outcomes.
Step #3: Prioritize your OKRs.
Review your objectives and key results and prioritize them. Determine which are the most critical and which should be given the most attention. This will help you focus your efforts on the most important goals.
Step #4: Share OKRs with People Involved.
Communication is key to successful OKR implementation. Share the OKRs with all stakeholders, including teams and individuals responsible for achieving them. This step fosters transparency and ensures everyone understands their role in contributing to the company’s objectives.
Step #5: Choosing the Right Tool for Tracking and Communicating OKRs.
For companies implementing objectives and key results (OKRs), simple, free tools like Notion, Google Docs or Sheets may only be sufficient in the short term.In the long-term, as you scale OKRs across the organization — requiring more visibility, alignment, and integrations — a more robust OKR software may be more fitting. This allows you to streamline and automate the strategic planning process. This helps to ensure that teams are in alignment with their strategies and business goals, helping organizations to identify any issues and adjust plans accordingly. Popular tools include the following such as:
- 15Five
- Asana
- ClickUp
- Betterworks
- Weekdone
- Workboard
- Lattice
- Betterworks
- Peoplebox
- Microsoft Viva Goals
- Quantive
Step #6: Define the OKR review cycle.
This process involves understanding which aspects of the strategy were effective, which were not, and how to proceed accordingly to continuously improve. Therefore, it is essential to develop an OKR review schedule that includes at least one quarterly follow-up meeting. These meetings provide a crucial opportunity to assess the performance of the system and make adjustments as necessary.
Step #7: Monitor and Track Progress
Regularly monitoring and tracking the progress of your OKRs is vital to ensure accountability and stay on track. Establish a system allowing teams to update and report on their Key Results regularly. This transparency fosters a culture of ownership and encourages open communication about challenges and roadblocks.
Step #8: Celebrate success.
Remember that trials and challenges are a way to strengthen relationships within the team and the organization. In addition to the final results, the journey itself that the team and each team member has taken plays a huge role. Difficulties and obstacles can serve as good experience that can be improved and refined in the future. This approach allows you not only to achieve success and specific results, but also to develop yourself and the team, acquiring skills and confidence in your abilities. In the context of OKRs, this approach can mean that even if the key results were not achieved 100%, the process of working on them brought important lessons and changes that will ultimately lead to more significant successes in the future.
Final Thoughts
Developed over 50 years ago by Andy Grove, the OKR (Objectives and Key Results) methodology for setting and achieving goals remains popular today among successful companies around the world. Implementing OKR is a great way to align a company’s strategic vision with the goals of teams and departments within an organization. With a proper and structured approach to using OKR, each subsequent OKR cycle helps to define common goals and priorities in the company, where each individual participant contributes to development and progress.
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