Objectives And Key Results

Loyd Mears

OKRs are a popular and revolutionary way to create a comprehensive plan and achieve massive success.

OKR stands for Objectives and Key Results. It’s a unique way for individuals, teams, and team members to set challenging, ambitious, and measurable goals. 


The features that set OKR apart from other goal-setting tools are 

  • simplicity and focus on identifying results, 
  • acting to achieve the results, 
  • and measuring progress based on achieved results. 

Objectives and Key Results (OKR) can be confusing because it’s a way to structure your goals, but it’s also a framework with many rules and best practices. 

OKR is a proven way to focus everyone in your organization on the same overall objective.

Objectives and Key Results is a very powerful Time Management and Productivity technique.

How are Objectives and Key Results Constructed?

Here is the OKR Formula

OKRs usually start with an Objective and have three to five Key Results at the bottom.

OKR Diagram

You may also express an OKR as a statement:

I will achieve my [objective] as measured by my [key results].

For example, “We will be profitable with healthy cash flow by increasing sales 20%, reducing costs by 5%, and reducing due payments to 30 days.

Guide To Objectives

Your objectives are what you must achieve, nothing more and nothing less. You should make them:

  • meaningful,
  • specific,
  • action-oriented,
  • and inspiring (if you can).

Properly created and executed, they protect against fuzzy thinking and inefficient execution.

Characteristics of Objectives

Objectives should be aligned, high impact, and time-bound.

Aligned: Always make sure the team objectives align with the organization’s ultimate goal. After you agree upon the company’s objectives, develop team objectives and team OKRs that align with company objectives.

High Impact: The highest impact Group Objectives should always be the ones that, if achieved, are likely to have an enormous impact across the entire organization. Achieving any objectives at the group and company levels are both causes for celebration! 

Time-bound: Keeping Group Objectives within a short and tight timeframe helps keep you on track. A short time frame allows you to see what works and what doesn’t quickly. You can also change course in a new cycle if your Group Objectives aren’t contributing to your Company’s OKRs.

Characteristics of Key Results

With a key result, you either meet the requirements or don’t. The objectives stay the same, but the key results change as the project progresses. When you’ve met all key results, you meet the objective.

Key results should be high impact, specific, time-bound, realistic, and within influence.

High Impact: The Group Key Results should reflect a major change so that the rest of your organization will take notice if you achieve 70 to 80% of your target. These are sometimes called stretch goals because they stretch your abilities to the limit. Aim high when you set goals. Easy goals don’t challenge you.

Specific: Group Key Results should have a clear scope and focus. The Company Key Results measure broad metrics, but the Group Key Results measure granular stuff, like product sales.

Time-bound: Set Key results so you target completion in 3 months or less. The key results have a shorter time frame so you evaluate progress and adjust.

Realistic: Plan your key results to balance between challenging to stretch your abilities, but not unrealistic. Estimate what you may accomplish and add 15%. You should be evaluating your progress frequently and making adjustments to your key results targets.

Within Influence: Group key results are always things you can influence but don’t do. For example, writing ten blog posts is a bad key result because it’s something you do. A good key result might be 1,000 views in a month for a blog post. The blogger can only influence but not control how many views the post will get. 

Key Components of OKRs

OKR begins with top management identifying strategic objectives for the organization or project. 

Objectives determine the company’s direction. Since company objectives are long-term, they usually last a year or more. Objectives are what your company wants to accomplish in the next 12 plus months.

You need everyone’s input when deciding what you want to accomplish in the next 12 months. It’s best to start with an OKR workshop where all key stakeholders for company strategy first ask and then get feedback from employees on what they think should be top priorities. Incorporate the input into the existing company strategy and break it down into 3 to 5 OKRs. 

OKR Planning
OKR Planning

You might use post-it notes, collaborative documents, or even a whiteboard to collect and organize your ideas. This exercise aims to figure out what the organization should accomplish by the next year.

Teams then identify Key Results that contribute to one or more of the overall Objectives.

Setting Team and Individual OKRs

OKRs tell what tactics teams and individuals will employ and what results they’ll need to achieve to help the organization achieve its long-term goals.

Link OKRs for teams to the company’s vision and focus on the improvements that the team can deliver in a quarter.

They keep you working on the important things and tell you what to put off or ignore.

Update OKRs regularly and talk about your team’s OKRs in your weekly or bi-weekly meetings to stay on track.

OKRs give each team and individual direction and a sense of accomplishment. You can also use them as a reason not to do stuff that’s not on your OKR list.

Create OKRs as if that’s all you’ll be doing that quarter, and your OKR program will succeed while helping the organization realize its strategic goals.

Having a clear outcome-driven focus helps everyone prioritize their tasks and understand how their work impacts the overall vision.

Track the progress on the Key Results and discuss them weekly to promote better initiative prioritization. If a team writes good OKRs that are outcome-focused, they’ll never need (or be able to meet) more than three per quarter.

Set Good OKRs With Examples

Implementing OKRs

Now that you’ve learned how to structure an OKR and what a good OKR looks like let’s look at how OKR works in practice.

First, Choose Your Ultimate Objective

Starting with your ultimate objective is usually a good idea. The guiding beacon for your entire organization will be that ultimate objective.

Ultimate Objective
Company Ultimate Objective

You may build your Ultimate Objective by looking at your goal and vision. Walmart, for example, aspires to be the world’s largest retailer.

Its goal is to assist people in saving money to live better lives. They would construct the Ultimate Objective, which would be to become the global leader in retailing by saving people money to live better.

Your organization’s ultimate objective is at the very top of your OKR hierarchy. An ultimate OKR can persist for decades and serves as a model for your annual corporate OKRs.

The group OKRs carry out your annual company Objectives, normally done quarterly. The initiatives you generate are helping to realize the group’s OKRs. Conduct a survey of all employees in your company and ask them to submit one OKR for the coming year.

This is a fantastic approach to get a sense of what all employees think should be a top focus.

Second, Construct Quarterly Team and Department OKRs

At the Beginning of Each Quarter: Teams and departments can construct their quarterly OKRs once the company’s OKRs are known. They normally do so at the start of each quarter. They can begin working on their efforts after the OKRs have been finalized.

Once Every Two Weeks: It’s best to meet with your team at least once every two weeks to discuss progress and keep track of your OKRs. This is to ensure that you meet your objectives regularly.

At The End of Each Quarter: When the quarter is through, sit down with your team and reflect on your OKRs from the previous quarter, closing them out and documenting your learnings. After that, you can start working on your new quarter’s OKRs.

This is a year-long procedure that you will continue to follow.

OKR Software

OKR Software
OKR Software

If you’re inexperienced with OKRs, the best way to implement them is to use software that guides you. There are many excellent OKR software programs available.

Profit.co has a free plan for up to 5 users that gives step-by-step guidance. Then there is a plan for less than $10/month per user. The paid plan has a 30-day Free Trial.

Here is a review of ten OKR software programs with detailed information.

Best Practices

While OKR is simple, the OKR framework contains a set of principles and best practices that will help you maximize the benefits of OKR and strategy execution. These requirements, especially if your company is new to OKR, might be intimidating. It’s best to introduce OKR gradually because it essentially changes management.

So, here are some of our ideas for best practices to get you started.

Establish OKRs Regularly

First and foremost, you must establish them regularly. OKRs are often determined annually for companies and quarterly for teams and departments.

It’s best not to have too many OKRs. Limit them to 3-5. OKRs will help you focus on what’s most important right now, which will require you to say no to some things. Try to stay away from including everything you’re doing in your OKRs. Everything you want to change or innovate should focus on your OKR.

Make Them Transparent

After that, you must ensure that your OKRs are transparent. You want everyone in the company to be involved.

That means that everyone should be able to see what the company’s and all of the different teams’ and departments’ priorities are.

This transparency is also necessary for alignment: the firm’s OKR should be available to everyone so that all teams and departments can ensure that whatever they’re concentrating on is helping the company move forward.

The status of the project must be updated at least once every two weeks, but once a week is much better. Seeing progress satisfies a core human need, and Harvard professor Amabile discovered a direct link between the regularity you update your progress and the likelihood of achieving your goal.

Appoint An OKR Ambassador

Finally, an OKR ambassador should be appointed. The OKR ambassador will be in charge of putting your OKR program in place and administering it.

After hearing what makes it a remarkable tool for strategy implementation, I hope you now have enough information to get started with OKR.

The History Of OKR Method Creation

It all began with Management By Objectives (MBO), a concept first introduced by Peter Drucker in his early 1950s book, The Practice of Management.

OKR Timeline
OKR Timeline

As a result, Objectives have become an integral part of running a business.

Organizations have learned a lot about what a good Objective is since they began using Objectives more and more.

The SMART criteria of George Doran summed this up well. According to his SMART criteria, each objective should be specific, measurable, achievable, relevant, and time-bound.

Kaplan and Norton created the Balanced Scorecard in 1992. Despite being a great method for setting the strategic plan for the organization, the Balanced Scorecard does not drive its execution.  

Using OKR, which Google implemented in 1999, all three concepts come together as one framework.

  1. Management by Objectives
  2. SMART Goal Criteria
  3. Balanced Scorecard

It includes all the lessons in Management by Objectives and how to structure your Objectives. You’ll also learn how to link strategy and action. So OKR is an execution tool.

Objectives And Key Results Founder

Andy Grove
Andy Grove

Andy Grove, who co-founded Intel with Gordon Moore, is the true father of OKR. In 1983, he wrote High Output Management, in which he coined the words Objectives and Key Results for the first time.

He used Peter Drucker’s Management By Objectives and expanded on its negative and positive outcomes.

Andy Grove told John Doerr about OKR while he was working at Intel.

Doerr Introduced OKR To Google

John Doerr
John Doerr

John Doerr later left Intel to work for KPCB, a reputable investment firm.

When KPCB invested in Google, Doerr approached Larry Page and Sergey Brin with the OKR concept.

They were ecstatic, and they decided to begin using OKR with just 40 individuals. Even though they have grown to 60,000 people, they still use them.

OKR Gains Popularity

It moved from Google to various other firms outside of Silicon Valley and the technology industry. 

So, why does any of this matter to you? Studies show how tough it is to execute a strategy repeatedly.

According to a 2015 study by Donald Sull, 45 percent of middle managers couldn’t name even one of their company’s top priorities. These intermediate managers are in charge of putting the strategy into action. They still have no idea what their strategy is.

Furthermore, 95% of employees are unaware of or misinformed about their company’s strategy.

How can they ensure that whatever they do contributes to realizing that strategy?

Benefits of OKR

  • OKR helps your company become a great place to work, has a clear route to success, and continuously helps teams achieve their objectives.
  • It assists you in becoming a fantastic place to work by giving teams more autonomy. You provide them with objectives without specifying how they should achieve those objectives.
  • Furthermore, you allow everyone in the organization to see where the company is headed and how their work contributes to that goal.
  • It will help you set a clear road to success by providing clear and transparent strategic priorities allowing everyone to focus on what is most important. Teams will be able to hit their targets continuously by following a basic structure based on real data to ensure they move the organization ahead.

The Difference Between Key Performance Indicators (KPIs) and OKRs

The key difference between OKRs and KPIs is the intent behind them. Generally, KPI goals are attainable and represent the output of an existing process or project, while the OKR process is more ambitious and challenging.

I wish great success and happiness for you!