What Are OKRs? OKR Framework Components
“OKR” is an acronym that stands for objectives and key results. OKRs require teams to define their goal (objective) and what success they’ll need to see to reach that goal (key results). The objective is always the big outcome you want to achieve, while key results are the measurable milestones you must reach to get there.
An easy way to think of the difference between the two is:
- Your objective is what you want to accomplish
- Your key results are how you will measure progress toward the objective
When setting OKRs, every objective will have two to four key results (sometimes abbreviated as KRs). For example, if your goal is to improve customer satisfaction with your customer support team, you might approach the OKR framework like this:
Objective: Increase customer service satisfaction
Key results:
- Increase customer survey satisfaction ratings to 80% or higher in six months
- Organize trainings for the customer service team
- Get average call wait times under 10 minutes or less
Note that the objective is a more general or overarching goal for the team. It’s not meant to be a specific metric or quantifiable outcome. The key results are what you use to identify measurable ways to reach your objective.
OKRs can be set by anyone at any level. Some companies might have a few company-level OKRs, while others may want each team to set their OKRs. Employees can also write OKRs to set measurable goals and track success.
But while these objectives and key results can be created at any level, having them at every level of a business is not always necessary. Finding the right number of OKRs at the right level can help ensure goal setting is effective and focused rather than overwhelming.
Committed vs. Aspirational OKRs
OKRs can typically be split into two main categories. These are committed OKRs and aspirational OKRs. Committed OKRs are realistically achievable goals that are usually tied to a specific result. Aspirational OKRs are more ambitious stretch goals that may have less tangible outcomes. Regardless of whether an objective is committed or aspirational, key results will help identify the measurable outcomes needed to achieve them.
Most teams can benefit from setting a mix of committed and aspirational OKRs. It’s important to keep specific goals in mind, while also allowing the team to think bigger. Aspirational OKRs are typically for larger or longer-term initiatives and are important to keep your sights on the future of your business. Committed OKRs can help balance the big picture with the objectives to focus on in the short term. Balancing the two types of OKRs can make for effective goal-setting that makes sense for your business.
Setting Effective OKRs
Effective OKRs will be clear, concise, measurable and time-bound. They’re meant to help put your goals into words, not further complicate the goal-setting process.
Good OKR Example
Objective: Launch updated website by Q4
Key results:
- Finish site architecture
- Complete new content strategy
- Launch without major bugs
This OKR is effective because it outlines a specific goal and includes a deadline. Each key result offers a tangible milestone that the team will need to work toward to launch the updated website by Q4, which is the ultimate objective. This OKR is also flexible enough that success doesn’t need to be defined by any one key metric.
When the site is launched, the team can use this OKR to reflect and measure success in several ways. Was the site launched by Q4? If not, what happened with the key results that led to this?
Bad OKR Example
Objective: Improve marketing
Key results:
● Do more outreach
● Make better ads
This OKR exemplifies how even a more aspirational OKR still needs to have measurable key results. In this case, reframing this objective and looking for ways to see measurable results may be beneficial. It may be true that the team wants to improve marketing, but the ultimate objective might actually be something more specific like “increase brand recognition.” It’s also ideal to include a general timeline or deadline so that you know when to revisit this OKR and check progress.
In addition, the key results need to be measurable. How does this team measure outreach? What would “more outreach” look like in an actionable way? How can this team determine what a “better ad” is?
Overall, a way to rewrite this OKR to improve it might be:
Objective: Increase brand awareness by end of year
Key results:
- Complete 10 pitches per month
- Increase click-through-rate on all social media ads by 10%
This objective points to the true goal, and the key results lay out exactly how the team’s marketing efforts can help them get there.
Measuring OKR success
According to venture capitalist John Doerr who has popularized the idea of OKRs, the OKR framework typically defines achieving 70% of a key result as a success. OKR software will typically create scoring systems for you, but even without software, each key result can still be measured using a “stoplight” system. A green light means achieving at least 70% of that key result. A yellow light means you made progress but ultimately did not deliver on the key result. And a red light means you didn’t deliver on the key result.
This method can be useful to avoid an all-or-nothing approach to OKRs when grading performance. In many cases, you may not achieve 100% of every key result you set for OKRs, but it’s important to record progress toward your objectives.
Benefits of OKRs
OKRs can be helpful in ways beyond just improving the goal-setting process. Teams can find OKRs effective for achieving business goals but also for keeping the team organized and aligned toward common goals.
Focus
The OKR framework provides clarity and helps you prioritize where employees should focus their efforts. This can help prevent teams from getting sidetracked or putting in effort on initiatives that may not support the main objective. OKRs can prompt teams to ask, “How is what I’m doing today helping us reach our key results?”
Alignment
OKRs can be immensely helpful for aligning on goals for your business. Objectives can connect teams through the goal-setting process. Cross-functional teams may feel more in sync when working toward the same OKRs. When everyone is working toward the same goals, it makes it easier for employees to feel bought into their day-to-day work.
Commitment
Teams that feel involved in the process of setting OKRs can feel more ownership over company goals and can use OKRs to track progress and measure success. This can increase productivity and make employees feel they have a clearer understanding of how they’ll be evaluated against OKRs.
Tracking
Effective goal setting with OKRs makes for quantifiable key results that help teams easily monitor progress. The OKR writing process can refine a more nebulous goal until teams know exactly what metrics they’re working toward to reach their objective. This makes it much easier to track progress over time as you evaluate successes.
Stretch goals
OKRs can also help teams think bigger and get excited about more ambitious or challenging projects, particularly with aspirational OKRs that push the boundaries of what a team is typically used to delivering.
OKRs vs. KPIs
KPI is an acronym that stands for key performance indicator. KPIs are essentially the key metrics that a team will use to measure success. These are important to the OKR process because key results are set based on the analysis of KPIs.
For example, if a marketing team wants to increase conversions, the conversion rate is the KPI they focus on. In the OKR framework, this KPI would be included as part of the target goal, such as “increase conversion rate by 20%.” Put simply, KPIs are just the measurable metric in every OKR.
KPIs alone can help you understand how your business is currently performing, but OKRs help frame those KPIs for goal-setting how you’d like to change them going forward.
Implementing OKRs
It takes more than just a couple of planning discussions to implement OKRs for your business, but it doesn’t have to be an overly involved process. Consider how to approach the goal-setting process step-by-step to implement the OKR framework. It’s important to keep goals realistic and flexible throughout the process, even if you’re setting more aspirational OKRs. Employee engagement is also crucial to implementing OKRs as a management framework for goal-setting.
- Conduct annual/quarterly planning
Getting the whole team together to go over strategy is a great way to get ideas and buy-in from all stakeholders. Your initial strategy conversations will help you identify which objectives to firm up into OKRs. Identify what you want to achieve over the next year or quarter.
- Set company objectives based on strategy and KPIs
With your main goals identified, refine what you want to accomplish into your objectives. These should be clear and actionable plans based on the key performance indicators you hope to change.
- Brainstorm and draft key results as a team
Align with cross-functional teams that will be working toward these objectives. Gather ideas for how the team might achieve these agreed-upon goals and how they will measure success.
- Finalize OKRs with stakeholder input
With your objectives identified and your key results defined, finalize your plan for these goals and make sure all stakeholders are aligned. If all seems good to go, it’s time to get after those goals.
- Continually monitor progress on key results
As you work toward your objectives, track your progress and adjust your OKRs as needed. Monitoring KPIs and team progress over time can help you iterate on your goals and on the goal-setting process as you learn and improve.
Common Challenges When Implementing OKRs
Businesses commonly encounter certain challenges with OKR implementation when rallying their people around the OKR cycle. Keeping employees informed and engaged in the process is crucial to implementing OKRs for your business.
Goal Misalignment Across Teams
It’s easiest for cross-functional teams to collaborate and stay efficient when they work toward the same goals. For example, if design and engineering teams are working toward the same OKRs on the same projects, it’s easy to stay aligned. But if each of these teams also has additional OKRs that are unrelated, it might be difficult to balance these goals and stay aligned.
Poorly Written OKRs
When OKRs lack definition or flexibility, they may not be as effective as you hope. This is why taking the time you need to involve stakeholders and brainstorm as a team is important in the initial stages of goal-setting. Starting out with solid OKRs is the best way to ensure they’ll be useful to you when evaluating progress.
Lack of Engagement in the Process From Employees
It’s key that stakeholders are aligned on OKRs. Allow for flexibility with goal setting, and link OKRs with incentives whenever possible. This can keep your teams motivated and promote fairness in evaluating employees against key metrics.
Example OKRs
OKRs vary based on industry, department and team goals. Consider these examples of goals that a marketing team and HR team might have.
Marketing
Objective: Launch successful podcast advertisement campaign
Key Results:
- Achieve 5,000 podcast downloads per episode
- Reach two million total campaign impressions
- Generate at least 100 sales from podcast promo code
Notice that the objective does not include any specific metrics. That’s what key results are for. Each key result is measurable, with a clear metric to help keep the team moving toward a specific goal, with each result feeding into the overall objective.
Human Resources
Objective: Reduce employee turnover rate by the end of this year
Key Results:
- Voluntary turnover below 10%
- Employee satisfaction scores improve 5%
- Hire talent manager and develop retention plan
Not every key result will have a KPI or numerical metric attached to it, but they should still be measurable. For example, in this HR example, one key result is hiring a talent manager. Success can be measured for this OKR based on whether or not a talent manager is hired by the end of the year.
OKR Software Tools
OKR software can be useful for teams managing the goal-setting process. Software platforms designed for the OKR framework can provide a central place for you to set goals, track progress and view all your metrics in one place. Goal-setting can be approached as either top-down or bottom-up. Top-down OKRs begin at the company level to align the entire organization. Software can help team members manage their own KRs at the departmental or team level based on higher-level objectives.
Perdoo, Atiim, Weekdone and Bettworks offer OKR software for goal setting at the company and team level. 7Geese and 15Five also offer support for individual employee goal-setting. Choosing an OKR software that works for your business goals can be a way to make implementing OKRs that much easier.
The Bottom Line
Impactful OKRs can drive strategic alignment, accountability and overall positive outcomes for businesses and teams of all sizes. While it might take some effort to define goals and implement the OKR framework, the process makes it easy to measure progress and define success for your organization. And there are many options when it comes to OKR software that can help make implementing and managing OKRs a simpler process.
Leaders and managers can find success in goal-setting as a team to define objectives and key results. Engaging employees in this way can keep the team focused on those shared objectives, leading to better results at all levels. Overall, OKRs are a smart and effective way to set goals and define measurable results for any business.
Frequently Asked Questions About OKRs
A good OKR sets a clear objective and outlines measurable key results. For example:
Objective: Launch successful social media advertisement campaign
Key Results:
- Increase click-through rate by 10%
- Reach two million total campaign impressions
- Generate at least 100 sales from social ads
Many businesses choose to evaluate and update OKRs quarterly or sometimes annually. Typically, as long as you have a defined timeframe for evaluating your OKRs at the outset, you can update them at the end of that timeframe. It’s also a smart idea to schedule check-ins throughout this process.
OKRs do not replace KPIs. KPI metrics are needed to define measurable key results. OKRs are designed to put those metrics in a goal-setting framework to give them context and decide how they support business objectives.
The best OKR tools for your business will depend on your business teams. Consider the size of your team and how you want to set goals. Will you be setting company-level OKRs? Some software options allow for goal-setting from the individual level all the way up, while others might be more limited to larger departmental OKRs.
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