An Introduction to Objectives and Key Results (OKRs)

I love helping teams to get clear on what they’re doing, why they’re doing it, and how they can get better at doing it while enjoying the journey.

Since I discovered Objectives & Key Results (OKRs) in 2015, they’ve been a huge enabler of this work.

They were developed by Andy Grove at Intel in the early 80s in response to a growing threat from both Motorola and Zilog. Today they’re used by thousands of organisations in every industry including Google, Spotify, AirBnB, and LinkedIn and countless others. They drive focus and alignment and provide tremendous clarity around how specific activities drive specific measurable outcomes.

Overview

In very basic terms, an OKR is simply a big inspiring objective and two or three key results which a team agrees to use as the means of measuring how well they’ve achieved the objective. The key results are NOT the means of achieving the objective but a means of measuring and demonstrating success.

For example:

We could say, our Objective this quarter is to know that we’ve created a product that our customers love.

Key Results

We’ll know we’ve done this by observing:

1. An increase in our net Promoter Score from 40 to 70
2. An increase in monthly active users from 3k to 10k
3. An increase in referral-based business from £100 to £250k

This example gives us a clear inspiring objective and three concrete ways to measure how well we’ve hit it this quarter. At the end of the quarter, we’ll close these OKRs and determine if they’re still the right things to go after. We’ll make adjustments to reflect what we know now and our new environment, and then repeat the process, staying relentlessly focused on the factors most critical to our success and learning along the way.

According to Marissa Mayer, every key result should contain a number. Key results should feel wildly ambitious, audacious, and on the edge of impossibility. Teams should enter the cycle with about 50% confidence of achieving each key result by the end of the cycle. At Google, achieving even 70% of a Key Result is considered a big deal. Consistently hitting 100% means we’re not aiming high enough to stretch ourselves.

Teams should check in regularly on their OKRs, ideally every week for quarterly OKRs or every month for annual ones, matching the cadence of their check-ins with the cadence of their decision making to respond to new information. I like to measure confidence over progress to enable deeper conversations and create a true learning organisation. Confidence conversations leverage diversity of backgrounds & experience in a way that builds trust, understanding, and group intelligence.

At the end of the cycle teams close their OKRs, assign a score to each key result and capture lessons learned. The learnings are much more important than the scores.

Ideally, every OKR, every check-in, every lesson learned, every triumph or disaster should be shared and celebrated publicly throughout the entire organisation.

Low confidence scores and even low delivery scores provide valuable data with which to refine future activities. Is a thing still valuable? Do we have the resources needed to deliver it in the way described? Were we deluded by unconscious bias? Take every opportunity to learn and adjust.

Why not traditional goals?

Traditional long-range planning tends to be brittle, relying on some critical and generally erroneous assumptions:

1. The problem space is well-understood
2. Every step and dependency can be mapped out in detail in advance
3. External conditions will remain mostly static
4. The plan will be mostly correct requiring only small adjustments

As such, teams often commit to the things that are more in their control: their activities, rather than committing and doing whatever it takes to achieve truly meaningful outcomes.

Moreover, traditional goals are often set in silos, annually, without much data, reviewed in a relatively cursory fashion at the start of the year and not really followed up on or challenged until the end of the year. Too often, it’s a box ticking exercise which, unsurprisingly, doesn’t provide deep alignment or drive strong outcomes.

Why OKRs?

At Genomics England we summed it up this way: outcomes, transparency, & alignment.

OKRs give you a platform for having difficult and productive conversations. If my team has committed to climbing Mount Everest and I’m building a nuclear submarine we are not aligned. Transparent measurable OKRs force us to address misalignment early and effectively.

OKRs allow us to be extremely ambitious in our goals yet razor-sharp in our measurement through specific numerical target. Regular check-ins link day-to-day activities with our top-level strategy by weaving BHAGs and KPIs into a single cohesive set of outcomes with clear causes & effects. If we achieve close to 100% of these outcomes then we can claim the “prize” defined by our objective.

OKRs clarify what we’re working on and why, as well as giving is an easy platform to confidently declare what we’re NOT working on and NOT planning to achieve.

This certainty lets us have important conversations about resourcing and expectation management up front rather than pointing fingers after an assumed deadline passes.

The pioneers of agile software development measured success by delivering “working software”. They didn’t measure meetings held, lines of code written, requirements drafted, or even number of features released. OKRs go a step further by reminding us that any outputs must deliver some positive, measurable impact for the organisation. How much impact is up to us and measuring it tells us how worthwhile our investments have been.

OKRs focus teams on outcomes over outputs.

We still have to deliver projects, maintain services, and execute initiatives on-schedule, within budget, and to a high standard, but we now have a new lens to put over our activities to judge whether they’re actually taking us somewhere that we want to be and how quickly we’re getting there.

OKRs for organisational learning

By anchoring activities in outcomes, we have a direct feedback loop between how we spend our time and what impact we have through our actions. The more regularly and carefully we check in on our OKRs, the more data we collect and the more opportunities we have to reflect and run safe “experiments” to discover leverage and fragility.

Is your organisation ready for OKRs?

It’s easy to get swept up in the excitement of a new framework like OKRs. Not every organisation is ready to benefit from OKRs. Not every organisation or every team needs OKRs.

Here are a few questions to ask yourself before jumping in.

Do you have a culture of accountability and ownership?

If teams are used to being told what to do and how to do it, they will struggle to create meaningful OKRs and find them useful in steering their day to day actions.

Do you have a culture of measurability?

OKRs rely on readily observable, measurable outcomes. If you struggle to find accurate, timely data and use it to make clear decisions about delivery, you may not be ready for OKRs. Consider adding instrumentation to your operations and products before diving into OKRs. Existing key performance indicators (KPIs) can be a good starting point for working with OKRs.

Is it safe to fail in your organisation?

John Doerr reminds us that OKRs encourage us to “stretch for amazing”. When we aim high, we’ll likely come up short but learn a lot and get much further than we would’ve if we’d played it totally safe. Make sure there’s room to grow and experiment and stretch and fail fearlessly before you pick up OKRs.

The four key disciplines of OKRs

In my work with thousands of people across dozens of organisations, I’ve discovered four key disciplines of working with OKRs that unlock the value of OKRs:

1. Setting great OKRs within a team
2. Aligning & Refining OKRs across teams
3. Checking in
4. Closing OKRs

The links above describe these in more detail but be prepared to practice each in isolation and together for several quarters before OKRs become a valuable habit.

Ready to get started?

If you’re ready to get started but not sure where to begin, check out some of my OKR coaching & training programmes or simply get in touch.