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One of the organizations’ biggest challenges when adopting Objectives and Key Results (OKRs) is learning how to write OKRs. But mastering them will help your enterprise drive value and get more out of their investments.
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In this article, we’ll show you how to take advantage of OKRs and use them to help your organization realize its strategic goals. Learn how to write effective OKRs and avoid common pitfalls that you may encounter along the way.
But first, let’s cover the basics. What are OKRs and how can using them benefit your enterprise?
What Are Objectives and Key Results?
The OKRs framework provides a simple, transparent way to set goals and achieve alignment across organizations and teams. They help connect the dots between long-term strategy and short-term goals.
OKRs focus on value-based outcomes rather than outputs, such as delivering work on time and on budget.
Organizations and teams create big, challenging goals that are specific, measurable, and time-bound. OKRs help answer two questions related to those challenges:
- Where do we want to go? The Objective
- How will we measure our efforts to get there? The Key Results
What’s the main difference between OKRs and KPIs?
If you’re familiar with using Key Performance Indicators (KPIs), you might be uncertain about replacing them with a new framework. The good news is that you don’t have to – OKRs and Key Performance Indicators (KPIs) are complementary. They can, and in many circumstances, should be used together to set, measure, and achieve your business goals.
Learning how to write OKRs requires understanding the differences between the two and how they can work together. KPIs are critical measures of business success that don’t often change. These are metrics that organizations track over time, such as financials (revenue growth) and sales (net new customers).
KPIs measure changes that have already happened – for example, the total amount of revenue growth in a particular quarter. Because this metric cannot be measured until after that quarter has ended, KPIs are lagging indicators. They track changes over time to key metrics that paint a picture of how the business is doing.
In contrast to KPIs, the OKRs framework is ideal for novel or ambiguous situations, where no baseline exists for comparison. OKRs define focus areas to improve performance. The shorter goal cycles of OKRs work well in an environment of frequent experimentation and change, such as Lean and Agile.
For example, a team may set an Objective to launch an innovative new product. Their Key Results might be:
- Build a list of X number of interested customers by a certain date
- Complete development by a certain date
- Launch the product by a later date
Each of these Key Results is a unique, measurable, time-bound metric. They will be used throughout the life of this OKR, and that’s all (unlike KPIs which can be measured repeatedly).
Another key difference is that these OKRs can be used to measure progress as it is happening, not just after the fact.
Using our example above, if a Key Result is to build a list of 100 interested customers by July 10, on June 15, the team could measure how close they are to achieving that result. This is why OKRs are considered to be leading indicators – they can be used to predict future behaviors.
As you learn how to write OKRs, remember you can use them alongside KPIs.
Teams may set an OKR to address a new issue impacting a KPI. OKRs can also become KPIs once organizations achieve an objective and conduct ongoing measurements.
Used together, OKRs and KPIs provide a complete picture of an organization’s progress, while expediting decision-making in the intervals between KPI measurements.
What Makes Effective OKRs
KPIs can be used to measure the performance of a team, department, or organization as a whole – and OKRs are no different. You can use them at different levels of the organization to drive value and measure your progress.
Different types of OKRs can be used at each level. These two types are called tactical OKRs and strategic OKRs.
Tactical OKRs reflect your highest priorities for the next 30-90 days, while strategic OKRs are typically longer-term, often between 1-2 years. Both represent meaningful change, improvement, and growth you aim to achieve in a fixed period.
OKRs are meant to help your team or organization set big, ambitious goals, like:
- Introducing disruptive innovations
- Establishing key differences between you and your competitors
- Establishing your organization as a leader in your industry
Now that we explored how to write OKRs, here’s what you need to know about writing effective ones.
Effective OKRs should meet four criteria. They should be:
- Measurable: Your OKRs should be able to be measured in a standardized way
- Challenging: You don’t set OKRs for routine activities you know you can accomplish. Use them to set bigger, more ambitious goals for your team or organization
- Clear: If your OKRs are difficult to understand to someone not directly involved in the work, they will not be effective. The key to writing effective OKRs is using clear, concise language that anyone can understand
- Consistently reviewed: OKRs are only effective when they are used before, during, and after an initiative or project to maintain alignment and focus
Effective OKRs make it easy to understand whether you meet your success criteria. Determining what to do next should be self-explanatory if you haven’t achieved your objective.
Let’s break it down further: What makes an Objective effective? What makes up an effective Key Result?
Objectives describe the goal at hand in a qualitative way and they typically do not involve numbers.
Your Objective needs to be aspirational, meaningful, and articulate a clear direction. It should represent a significant change from where you are today, and should connect to a greater mission or strategy.
Key Results need to be three things:
- Specific and time-bound: They need to articulate what needs to be done and by when
- Aspirational: There should be an aspirational element, but realistic enough that they’re achievable
- Measurable and verifiable: They need clear criteria for success, so you know whether they were achieved
Learn more about how effective OKRs can empower your organization at the portfolio level. Access this eBook titled “Connecting the Dots Between Strategy and Delivery.”
Basic Formula for How to Write Effective OKRs
OKR evangelist John Doerr developed a simple formula for how to write OKRs:
We will __(Objective)__ as measured by __ (these Key Results).
Here is an OKR example adapted from Doerr’s website:
We will (Objective): Design a UX so intuitive that customer service inquiries will be rare in six months.
As measured by:
- Key Result 1: UX design matches 100% of customer requirements
- Key Result 2: Fewer than 1 UX-related customer service inquiry per week
- Key Result 3: Scale infrastructure to support 100,000 users by end of quarter
This is an effective OKR, because it meets the following criteria:
- Ambitious: The Objective is challenging, providing a qualitative, inspirational direction for the team
- Time-bound: Both the Objective and Key Result 3 provide the UX team with realistic deadlines
- Measurable: The Key Results are quantifiable and easily verified
- Concrete: The Objective and Key Results are clearly defined and simple to understand
- Action-oriented: These are outcomes the team can own and work towards
This basic formula is the foundation for knowing how to write OKRs. It’s also instructive to know what not to do.
Examples of Effective OKRs
It can be helpful to look at existing OKRs to better understand how to write them. Use the examples below as guidance as you learn how to write OKRs for different scenarios.
Example 1: Organization-wide OKR
A common goal for many organizations is to increase their market share. This is an example of a strategic, organization-wide OKR because it involves many functions of the organization and will likely take longer than a couple of months.
This example illustrates how under one strategic Objective, various teams might have different OKRs to focus on.
Strategic Objective: Increase market share in the video editing software industry
- Sales team Objective: Increase average deal size
- Marketing team Objective: Increase brand awareness
- Product team Objective: Add features to improve our product’s user experience
Let’s look at some examples of what team-level Key Results might look like for each of those team-level Objectives.
Example 2: Marketing team OKR
The marketing team might choose to focus on increasing brand awareness to achieve the organizational goal of increasing market share.
Marketing Team Objective: Increase brand awareness
- Publish three new blog posts every month to drive 4,000+ new visitors to website a month
- Increase number of page one search results from 10 to 30
- Generate five new earned placements in relevant media outlets
Example 3: Product team OKR
In their effort to increase brand awareness, the product team might choose to focus on building any desirable features that their competitors currently have that they do not.
Product Team Objective: Add features that our competitors have to improve our product’s user experience.
- Conduct research to determine most-requested features among top 1000 users
- Create a development roadmap for how to build 5 most-requested features within one year
- Implement 75% of new features within 8 months
Common Mistakes When Writing OKRs
Now that we’ve talked about how to write OKRs, let’s look at some pitfalls to avoid.
It may surprise you to learn that typical goal-setting processes can undermine your OKR efforts, especially when you’re learning how to write effective OKRs. It’s easy to make mistakes when teams have experience with more traditional goal-setting systems. Here are some mistakes to avoid when developing OKRs.
Adopting a top-down approach
The OKRs framework is not meant to be part of a bureaucratic process where goals are dictated from the C-suite to the rest of the organization. Instead, OKRs should be set both top-down and bottom-up.
In this unified goal-setting approach (often referred to as “bi-directional” goal setting), leaders should use OKRs to set the organization’s strategic priorities and objectives. But teams and their team leads should be allowed to determine how to support these higher-level objectives with ones of their own.
Writing OKRs without team input
A prescriptive approach to writing team-level OKRs goes against the spirit of the methodology and against Lean and Agile practices. Not consulting teams about the OKRs they will be responsible for can stifle creativity and engagement. Teams have the unique expertise to know what needs to be done and how to achieve it. This autonomy is critical, especially in a fast-paced Agile environment focused on value delivery.
Creating accidental silos
If teams create OKRs in isolation, the chances of conflicting priorities and uncoordinated work efforts increases. There’s a fine line between giving teams the freedom they need and planning work across teams and teams of teams. Understanding these dependencies is a prerequisite to setting effective goals and ensuring alignment.
Making OKRs too easy
A critical element for grasping how to write OKRs is to remember the framework’s purpose: To facilitate continuous business growth and improvement by pushing the envelope. OKRs, you can easily reach defeat this purpose.
Using OKRs as an individual performance metric
Plain and simple, OKRs are not an employee evaluation tool. Using OKRs to evaluate individual performance and make compensation decisions can promote “sandbagging” – i.e., intentionally setting small goals and low targets to ensure success. Small goals and low targets can sabotage the ambitious goals that OKRs are designed to promote within an organization.
Going overboard with too many objectives or too many key results
OKRs help narrow down the work that matters most to the business for teams representing all parts of an organization. Ideally, teams will manage no more than five Objectives and three to five corresponding Key Results per Objective. Any more than this, and teams may become discouraged or lose their focus.
Treating key results as a to-do list
Key results are not tasks or activities. The litmus test for key results is: Will they make a positive impact on the business and your customers?
How to Write OKRs in 5 Steps
Creating OKRs for the first time can be challenging, but don’t worry. You can use the following steps to help you as you learn how to write OKRs.
Step 1: Adopt a unified approach to goal setting
The OKRs framework is unifying by design if followed closely. Teams should develop OKRs in context with other teams, as well as the organization’s goals and priorities. Otherwise, teams are just islands of people guided by their own goals and values.
Step 2: Revisit your purpose
The practice of setting OKRs provides a good opportunity to re-examine and reinforce the team’s reason for being. What value does the team bring? Is the team fulfilling its responsibilities? Are the Objectives being set within the team’s purview? While those are all important considerations any time you’re using the OKRs framework, they are especially useful questions to answer when you’re learning how to write effective OKRs.
Step 3: Aim high, but not out of reach
OKRs should stretch the bounds of what’s possible but be attainable given the team’s resources and expertise. If a goal is too outlandish and unrealistic, it may demotivate teams.
Step 4: Brainstorm and debate key results as a team
If the team is going to be responsible for delivering the key results, then every member should have a say in drafting them. Brainstorming drives engagement in the process and ownership of the OKRs. A healthy debate ensures that the key results are as challenging as possible.
Step 5: Don’t forget interdependencies
To write effective OKRs, it is important not only for teams to align with company strategy, but also with each other. To do so, they need a good understanding of how their work (and OKRs) are connected to other teams and vice versa.
For this, it’s critical to find an OKR solution that’s tied to the actual work being done. Make sure that solution allows teams to toggle between hierarchies and organizational levels to understand how objectives are pursued, connected, and shared.
We’ve Written our OKRs. Now What?
Knowing how to write OKRs properly is the first step. To successfully drive the desired outcomes, organizations and teams should take the following actions.
Make OKRs visible to everyone
Transparency ensures that everyone is on the same page. Teams who understand how their work contributes to the organization are more engaged and motivated. This also makes it easier to track progress, resolve conflicts, and manage dependencies across the enterprise.
Don’t set and forget them
Similar to Agile, OKRs are iterative. Ideally, teams analyze their OKRs weekly to ensure progress. This facilitates agility and adaptation to today’s rapidly changing market conditions.
Celebrate 60-70% attainment
This is part of the cultural shift in embracing OKRs. Because reaching 100 percent of them is a rarity, teams should celebrate the 60 to 70 percent goal. This reinforces the commitment to stretch goals.
Leverage good OKR software
OKR software refers to dedicated tools that organizations can use to set, communicate, track, and measure goals. Ideally, organizations and teams can define and monitor OKRs in the same tool where they manage and execute their work.
Continuous Improvement with OKRs
Like anything worth doing, learning how to write effective OKRs takes time and practice. Use these tips as a starting point or a refresher if you have experience with OKRs.
Discover how to use OKRs to connect the work delivered to enterprise strategy, ensuring your enterprise gets the most out of their time and resources. Watch the on-demand demo to learn more.