What are OKRs, and How can OKRs or Objectives and Key Results be useful for organizations? How to implement OKRs in the organizations? This guide will help you to answer all of the questions.
You will also get to know about OKR examples. OKR templates, and I will also share the OKR excel template.
OKRs or objectives and key results is the new goal setting and measuring methodology used by organizations like Google, Intel, and many more.
So the question is OKRs (Objective and Key Results) useful, or is it just another buzzword? What do we mean by OKRs? What are OKRs?
Definition of OKRs (Objectives Key Results) and what are OKRs?
OKRs is an abbreviation for Objectives and Key Results, which is known now.
Objectives and Key Results – OKRs are a collaborative goal-setting methodology that can be used by individuals, teams, and organizations to set challenging goals with mechanisms for its measurement.
OKRs are about how to track progress, create alignment and encourage engagement with the help of measurable goals.
OKRs can be used as a performance measurement tool as they set goals frequently and measure the achievement of those goals in real-time.
An Objective is a goal to be achieved. Therefore, it should be SMART and inspirational to you and your team.
Objectives should be concrete, measurable, and must be challenging enough to drive best performance and execution.
Objectives set with SMART goals setting can work as a cure for unclear thinking, lost focus, and half-baked projects.
Key Results are the yardsticks to measure whether objectives are achieved or not.
Key results must be verifiable and measurable otherwise, it defeats the whole purpose of having OKRs in the first place.
You can set goals, but if you do not have mechanisms to measure the achievement of goals, the process may fail.
Key Results must be SMART and should have a regular measurement around them.
Key Results can evolve for the achievement of the goals, while all key results identified are completed in the desired manner, the goal is achieved.
The question is, what are the components of OKRs? Is there any formula for OKRs?
The OKR Formula
In simple terms, Objectives are written at the beginning of the document, and supporting 3 to 5 key results are written later.
We can also write OKR as a statement like this.
“I will (Objective) as measured by (Key Results).”
I will recruit 3 new hires by the end of XX month this year.
What are the types of OKRs?
There are three types of OKRs: Committed, aspirational, and learning OKRs.
It is expected that you achieve the committed OKRs as its name suggests.
Committed OKRs can be used for performance measurement of team and individual.
Committed OKRs are primarily used for individuals to bring more accountability to the team as a whole.
Aspirational OKRs are stretch goals, the goals that are not achieved earlier, or they can also be called moonshots.
Aspirational OKRs are usually long term and shared with other team members as it brings more employee engagement.
Organizations can use these aspirational OKRs for future projects that are required to be achieved in the long run.
As the name suggests, the outcome decided for these OKRs is Learning.
The team focuses on the learning gained from the process rather than anything else.
Learning OKRs can be useful for new projects or when the team is unsure of the outcomes or focused outcome is leaning towards the process.
The team can set OKRs like “What will be learned with XX project in the next 60 days?”
Is there any OKR format that can be used by every team member? How to develop an OKR format? What OKR format is used by John Doerr himself?
The OKR format used by John Doerr was simple. However, more or less, other OKR formats are also the same with some addition.
Key Result 1
Key Result 2
Key Result 3
As we can see, the OKR format is simple, however as Marshall Goldsmith says, simple may not necessarily mean easy.
In OKR format, first, you have to write the Objective. After that, it is more like the team’s goal in a given specific period of time.
Objective written in OKR format should be
- Time bound
While the second most crucial section of the OKR format is Key Results.
Key Results are the metrics mentioned in OKR format to measure whether the Objective is achieved or not.
Key Results are written after objectives and serve as a critical metric for goal achievement, as the OKR format can be used for both goal setting and goal achievement.
The OKR format can also be used as an accountability tool for the team member and a tool to know the status of objectives.
You can keep track of the OKR format in excel easily; however, there are many OKR software available in the market now. Therefore, I suggest that you select your OKR format and OKR software based on your needs.
OKR format template in Excel
I personally like the OKR format template in Excel by smartsheet. They are free to download. You can access them by clicking on OKR format.
As I said earlier, keeping the OKR format template in excel is completely fine however, having OKR software will automate the process and look visually more professional and appealing to team members.
How to write OKRs?
How to write OKRs? Is there a process to write OKRs? How to write OKRs with teams?
Writing OKRs are simple but not that easy. It requires long brainstorming with team members and your boss. First, however, I will summarize the process of how to write OKRs?
First, understand the OKR format thoroughly before jumping into the process of how to write OKRs? Or any other process.
Here are some key guidelines for how to write OKRs?
- Objectives should be actionable, time-bound and Ambitious for individuals and teams.
- Key Results should be quantifiable and only 3-5 per objective.
- All team members should create their own OKRs and participate in the OKRs process for the team.
- Team while considering how to write OKRs? Must take into account collaborative intelligence of the team.
- Use feedback from peers, subordinates and supervisors to write OKRs.
- OKRs must be transparent and should be shared publicly this will bring more accountability and engagement in the team.
- While implementing OKRs for the first time, it should be separated from the performance management system. However it should be one of the factors for performance measurement.
So, these are some of the guidelines for how to write OKRs? Now let’s see the process for how to write OKRs?
How to write OKRs? The process.
How to write OKRs for a Team? It is simple to follow the normal goal setting process; however, can the same process be used to write OKRs for individuals? First, let’s take a look at the approach to write OKRs.
Step 1 – Having goal setting conversations.
Everyone should sit down together and have discussions about the top 3 to 5 goals organizations want to achieve in the coming year.
Here collective intelligence of the team members will be essential as all individuals bring different perspectives to the discussion.
The discussion should be open and list out as many possibilities as the team can think of.
Ask the reasons for each goal identified in the process. The team can use a process of 5 whys, in simple words asking why to the point where the team agrees on the goals.
Goal setting conversation should aim to bring out the top 3 to 5 goals that the whole team agrees on for further discussion. These goals should be mutually decided by team members.
After having goal setting conversation in the process of how to write OKRs, the next step is to draft goals and share them with team members.
While drafting goals or objectives out selected from the last step, have a second review and discussion for the goals.
Sharing draft goals with team members aim to get conversations rolling and get as many perspectives as possible.
You can ask team members to give alternate goals or ask for variation from their view to the goals.
While we ask for the variation to the selected goals, we can build better objectives.
Step 3 – Have brainstorming session to set Key Results
Once objectives have been identified, the next step is to set Key Results to measure the objective or goal achievement.
Key results are metrics and mechanisms that measure the execution of objectives by teams and individuals.
Key Results should be discussed and agreed upon by all team members, as these Key Results will measure execution done by them.
Brainstorming is the best process to make the most of the group’s collective intelligence.
By taking into consideration views from all team members on key results will bring more accountability from them.
Step 4 – Create Individual OKRs
Once the company, function, and department OKRs are identified by the process above, now the next step is to write Individual OKRs.
Individual OKRs can be written based on team members’ potentials, skills, and aspirations, aligning with the company’s overall objective and team member’s departments.
Individual OKRs should be first set up by team members themselves and later discussed with the team, or this way, everyone contributes to OKRs.
Giving team members to set up their OKRs themselves first will give freedom to them that will drive more engagement.
While discussing individual OKRs with team members will ensure everyone has challenging enough OKRs in place.
Step 5 – Set up OKR review process
There should be a mechanism and frequency for OKR review.
Most organizations have quarterly reviews for all their functions; however, reviewing OKRs will drastically shorten these meetings.
Reviewing OKRs can be a short process in which organizations can identify the status if any course correction needs to be made.
There is plenty of OKR software available right now that can make this review smooth, or even OKRs can be tracked in real time.
So this was the process of How to write OKRs in brief. This process is written in general terms. So you can see if it suits your need and can be modified.
Now let’s look at some of the OKRs examples. Writing OKRs better can be viewed as samples for different departments or functions.
The OKR examples shared here are fictitious and unrelated to specific organizations.
The OKR Examples will guide us to understand them better. After all, it is the most practical approach to goal setting and measurement.
Here are some of the OKR examples for HR, Accounts, Company, Sales, Product, Customer services, and many more.
OKR examples for Product Development.
Here are some of the OKR examples for Product Development.
OKR Examples# 1 for Product Development
O – Research and understand the intent and view of our users and non-users
KR – Conduct 50 virtual interviews with Users by next quarter
KR – Conduct 50 virtual interviews with Non-users by next quarter
KR – Conduct online surveys of 1000 users and non-users by the end of the 2nd quarter via our website.
OKR Examples# 2 for Product Development
O – Successfully launch the latest version of our product by XX Date
KR- Get 2000 new sign-ups for the newest version via our website
KR – Get the best rating from the top 15 reviewers.
KR – Improve delivery effectiveness to 70% or more from 60% before launch.
OKR Examples for sales
OKR Examples for sales can be used as a reference while setting OKR for the sales department. However, I will try to give the best OKR examples for sales here.
Here are some of the OKR examples for sales
OKR Examples #1 for sales
O- Develop 2 more accurate sources for developing sales leads.
KR – Reduce the data collection point to 8 from 12
KR – Identify the 5 best sources for developing sales leads for further scrutiny.
KR – Develop a process for scrutiny of developed sources.
OKR Examples #2 for sales
O- Accelerate our sales cycle for all types of clients.
KR – Reduce sales cycle by 7 days for all types of clients by the end of XX month.
KR – Reduce inquiry to demo time by 3 days.
KR – Reduce time between final proposal and agreement to 2 days.
OKR Examples for Growth.
Most of the time, growth teams are cross-functional teams working together for a common goal or project.
I will share some of the OKR examples for growth that can be used as specimens.
Here are some of the OKR examples for growth.
OKR Examples# 1 for growth.
O- Increase our user base via affiliate promotion by the end of XX month.
KR – Get the 5 best bloggers to publish our content next quarter.
KR – Invite affiliate applications and onboard 50 affiliates in the month of launch itself.
KR – Participate in relevant industry events and get thought leaders to speak about our brands.
OKR examples# 2 for growth
O- Create exciting pricing for our products
KR – target to increase the close-win rate to 20% from 5%
KR – Improve user retention to 45% from 25%.
KR – Decrease the sales cycle to meet the close-win rate.
OKR Examples for HR.
Human Resources are a crucial function for any organization; here, I have selected a few best OKR examples for HR.
OKR examples#1 for HR
O – Improve recruitment process for faster hiring process by the end of XX month.
KR – Reduce cycle time by 7 or more days in the recruitment process.
KR – Reduce time taken to offer selected candidates to the same day.
KR – Reduce rounds of interviews from 5 to 3 merge interview panels to speed up the process.
KR – Develop engagement initiatives for application to the new hire process.
OKR Examples#2 for HR
O- Improve internal job satisfaction score by 50%
KR – Conduct more fun activities and reward the best performers.
KR – Conduct quarterly pulse surveys and invite suggestions for improvement in job satisfaction.
KR – Interview Key performers and low performers to understand their view on job satisfaction.
What is the difference between KPIs and OKRs?
KPIs – Key Performance Indicators have been here for quite a long time. It is primarily used by organizations for measuring the performance of businesses, individuals, and teams.
OKRs – Objectives and Key Results are, on the other hand- Progressive goal setting and achieving methods that can focus on areas to be improved.
If we see OKRs vs. KPIs, they differ in the philosophical level. One is more concerned with measuring performance indicators, and the other is more focused on setting goals and measuring their achievement.
Now let us see what is the difference between KPIs and OKRs in detail.
OKR vs. KPI point #1
OKR is a goal setting method that can drive change, improve progress and track them.
KPI is a business metric that measures performance in absolute numbers.
OKR vs. KPI point # 2
OKR can be bottom up and top down or any mixture of both.
KPI most of the time, top down cascades down from top to bottom.
OKR vs. KPI point # 3
OKRs are helpful for alignment, process improvement, engagement, and focus on selective goals.
KPIs are more useful for performance management and measurement.
OKR vs. KPI Point # 4
OKR can be frequently evaluated, adjusted, tracked, and can be resettled as per the need.
KPI also can be re-evaluated; however, most of the time, the KPIs are not flexible.
OKR vs. KPI Point # 5
OKR focuses on specific areas of improvement to focus on, better for project management.
KPI focuses on the level of performance the organization wants to achieve.
So here are some of the differences between OKR and KPI. Both have their advantages and disadvantages.
I am not suggesting that OKR is a better tool. However, KPI is required for the measurement of performance for any business.
While if we separate OKR from performance management, it can be the best tool for goal setting and goal achievement.