Introduction to OKRs (Objectives & Key Results)
A consolidation of OMM OKR training material & books I’ve enjoyed in 2022; bibliography available.
This set of notes should serve as a brief overview of Objectives and Key Results fundamentals, whether you’re new to the topic or topping up knowledge ahead of setting your own fresh goals. I’ll summarise in 5 principles, informed by the flavour of OKRs we use in my team’s Workboard (a web app).
OKR stands for “Objective and [its underlying] Key Results”. The concept is applicable to flat team structures (where everybody shares a set of team Objectives, and individuals deliver their respective KRs toward those) as well as complex layered organisations (in which the KRs of each layer are the Objectives of the layer below, so that goals are cascaded neatly right from the very top through to the entry-level roles).
Organisations everywhere are using OKRs to align & achieve strategic priorities at pace and at scale. They are one particularly empowering method of driving clarity, purpose, and alignment across large & multifaceted teams.
OKRs are an evolution of several more established, traditional goal setting methodologies like Management By Objectives (MBO). They were created at Intel in the 1970s (for a full & richly narrated first-person account of that history, see bibliography), and adopted by rapid-growth startups (including Google, Apple, One, etc) and mature enterprises alike, to great effect (there are countless examples of exponential sales progress & outcomes-based innovation success stories at so many enterprises.
Two handy tests to verify the quality of your Objectives
- All of our objective should pass the “espresso test” — when a team reads it, do they feel like they’ve taken a double shot of espresso on a Monday? Does it get them excited?
- (For senior leaders) The objective should pass the “townhall test” — if this objective were read in a townhall, would the audience find it inspirational & aspirational, or is it just corporate speak?
Objectives are the team’s north star, whilst KRs are the SMART business outcomes that are necessary & sufficient to ensure delivery of their respective Objectives, within a specific time period. KRs give use something to measure progress against, every week, by which we can report up-to-date confidence & likelihood per Objective.
A good ballpark is to set a concise 3–5 KRs per objective. Teams should be able to look at their own OKRs as a clear reminder as to where they will focus for the quarter because that is what is going to create the most value for the business. The OKRs should include
- how we run.
- how we grow.
- how we transform.
KRs are not a list of output or tasks (some OKR software allows you to set subtasks for each KR for itemised progress-tracking); rather they are the valuable outcome that each team is creating. It’s easy to sit down and write a to-do list; much more difficult (and valuable) to align on “what victory looks like by the end of the specified time period”.
OKRs executed effectively should unlock a team’s aligned potential. With that alignment comes a sense of purpose & accountability. Teams get to continually iterate and learn each time they set reset their OKRs.
There are 5 key principles that set OKRs apart from traditional #goal setting:
- OKRs are a team sport because teams are the engine of value creation, not individual goals. It takes a team to drive outcomes.
- OKRs should be localized and transparent. Objectives for a marketing team should reflect marketing language, and for a dev team should reflect dev language. Transparent OKRs allow an organization to collectively play their cards face up so the org can play its best hand to win.
- OKRs should provide radical clarity for every team.
- OKRs should be aspirational and inspirational.
- OKRs follow a fast, focused pace: weekly attention will bring results into focus and create faster incremental outcomes.