OKRs: Practical guide for setting objectives and key results

Objectives and Key Results (OKRs) are a goal-setting and management framework that originated in the 1970s at Intel Corporation. OKRs are associated with Google because the company adopted them in the 1990s, becoming an integral part of its corporate culture.

Benefits of OKRs

OKRs are used to define and measure the key objectives and results of an organization, team, or individual within a specific timeframe, usually quarterly. These goals provide clear direction and aligned focus to drive performance and growth, thereby fostering increased productivity and more effective outcomes.

3 Reasons to Use OKRs

• Aligning personnel with business objectives and strategy
• Promoting transparency and strengthening trust
• Fostering a productive and collaborative culture

Basically, OKRs involve setting a series of objectives to achieve, along with different key results that contribute to the attainment of these goals. For example, Objective 1 can be comprised of 4 KRs. The idea is that by achieving these 4 KRs, the objective will be fulfilled.

Objectives

• They represent WHAT needs to be achieved, no more, no less.
• They express goals and interests.
• They are ambitious but realistic.
• Objectives should be significant, specific, action-oriented, and ideally inspiring.

4 Characteristics of Objectives

• Alignment: They should ensure that the team is aligned in the same direction.
• Clarity: Everyone should understand them to avoid confusion.
• Prioritization: The team needs to know the importance of each objective and the order to follow.
• Shared responsibility: It's not about individual goal achievement but rather about building together.

Tips for Structuring Objectives

🔎 Descriptions: Keep objectives simple and clear, ideally one or two sentences.

📝 Simple Language: Anyone should be able to understand them.

🎯 Start with a verb: Indicate action.

💪 Challenging and inspiring: Motivation is implicit.

⏳ Clear and specific: Specify a timeframe and clarify as many times as necessary.

Key Results (KR)

• HOW we will achieve the objective. Effective KRs are specific, time-bound, ambitious yet realistic. Above all, they must be measurable and verifiable.
• They should describe outcomes, not activities.
• It is not a KR if it doesn't have a number. Either you meet the KR requirement or you don't; there is no room for gray areas or doubts. It should have evidence of accomplishment, which must be available, credible, and easily detectable. Examples of evidence can be lists, links to documents, notes, reports.
• Once all KRs are completed, the objective should be achieved; otherwise, it means that the OKRs were poorly formulated from the beginning.
• Each KR should be challenging; if you are sure you will achieve it, perhaps you haven't pushed hard enough.
• A KR, should have 3 values: starting value, current value, target value.

Responsible Party

Each KR requires a responsible party: Someone who serves as a liaison to track progress, clarify doubts, and communicate any changes. Roles:

• Leadership: Responsible for largely defining strategies, but Middle Managers also support this process.
• Middle Managers: Responsible for developing Objectives (in alignment with leadership to ensure strategic alignment) and KRs (with teams to assign responsibilities).
• Teams: Responsible for developing initiatives to contribute to KR achievement, but these initiatives are also monitored by Middle Managers.

Note: It is essential to transmit information at all three levels (from top to bottom and bottom to top), without skipping anyone.

Characteristics of OKRs

• There is no defined protocol that fits all companies. Each team has its own timelines, with some teams opting for 6-week cycles, others for a month, a quarter, etc.
• 3 to 5 Objectives and a maximum of 5 Key Results per objective.
• Flexibility: If something has changed and the objective is no longer relevant, it should be modified or discarded.
• Aspirational OKRs should be uncomfortable and possibly unattainable. This pushes the company to achieve great results.
• Leaders must have a clear understanding of the why as well as the what. People need more than milestones for motivation; they thirst for meaning, understanding how their goals relate to the company's mission.
• When defining OKRs, it should not be imposed from the top; it is recommended to have a mix of top-down and bottom-up goals.

"In God we trust; all others must bring data." - Doerr, John. Measure What Matters (p. 113).

"OKRs make you focus on working on the business, instead of just working in the business." - Doerr, John. Measure What Matters (p. 231).

Test to Determine if OKRs are Good

• If you wrote them in 5 minutes, they are most likely not good. Think again.
• If your objective doesn't fit in one line, it's not fully polished.
• If they are using internal terms that no one else understands, it's not good.
• If they are set with unrealistic dates (e.g., all KRs due on the last day of the quarter), it means you don't have a clear plan.
• Ensure that the KRs are measurable: Increase sign-ups → Increase daily sign-ups by 25% by May 1st.

Examples of OKRs

Taken from the book "Measure What Matters" by John Doerr.

Example 1

OBJECTIVE: Support company hiring

KEY RESULTS

1. Hire 1 director of finance and operations (talk to at least3 candidates).
2. Source 1 product marketing manager (meet with 5 candidates this quarter).
3. Source 1 product manager (meet with 5 candidates this quarter).

Example 2

OBJECTIVE: Continue to build a world-class team

KEY RESULTS

1. Recruit 10 engineers [0.81.
2. Hire comercial sales leader [1.0].
3. One hundred percent of candidates feel they had a well-organized, profesional experience even if Nuna does not extend an offer [0.51]

Example 3

OBJECTIVE: Modernize, rationalize, and secure the technology used to run the business of Intuit

KEY RESULTS

1. Complete migration of Oracle Business Suite to R12 and retire 11.5.9 this quarter.
2. Deliver wholesale billing as a platform capability by end FY16.
3. Complete onboarding of agents in small business unit to Salesforce.
4. Create a retirement plan for all legacy technology.
5. Draft and get alignment on new Workforce Technology strategies, road maps, and principles.

Example 4

OBJECTIVE: Modernize, rationalize, and secure the technology used to run the business of Intuit

KEY RESULTS

1. Implement Box pilot for first 100 users by mid quarter.
2. Complete BlueJeans rollout to final users by end of the quarter.
3. Transfer first 50 individual account Google users to enterprise account by end of the quarter.
4. Finalize Slack contract by end of month 1 and complete rollout play by end of the quarter.

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How OKRs are Formulated in Organizations

The objective of one of the company's leaders generates several KRs, which become the objectives of their collaborators, and so on, as shown in the following figure:

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3 Incorrect Ways of Prioritizing

• Wild Chimpanzees: There is no effective communication, priorities are organized based on who makes the most noise.
• The Divine Word: Decisions are monopolized by the highest-paid person, simply because they earn more, almost like a messianic figure, assuming they must know more than others.
• Meteor Shower: When activities are categorized based on established priority levels and there is no control over them, there is a risk of marking activities with an inappropriate priority level to have them resolved before others. When there are too many activities with the highest priority level, the team will tend to attend to what they prefer.

Closing OKRs

• For better results, OKRs should be reviewed multiple times per quarter by both collaborators and their supervisors. Progress must be reported, obstacles identified, and key results refined.
• OKRs are not finished when the task is completed. In one-on-one meetings and group meetings, three aspects should be analyzed:
• ~Progress: Percentage of goal completion.
• ~Score: How I rate myself based on the work done (they don't always go hand in hand; it may be that the goal was too basic or that I achieved it due to something I didn't have to work on).
• ~Self-assessment: An analysis of the work done.
• In the end, the numbers are less important than the feedback and discussion with the team.

• Afterward, ask the following closing and reflection questions about OKRs:
• ~Did I accomplish all my objectives? If so, what contributed to my success?
• ~If not, what obstacles did I encounter?
• ~If I had to rewrite the OKRs, what would I change?
• ~What have I learned that could alter my perspective for the next cycle of OKRs?

• An unfinished objective can be revisited in the next quarter with a new set of key results, or perhaps its time has passed and it is time to close it.

OKR Cycle

The following is an example of an OKR cycle, in which you can see that the OKRs for the next cycle are planned in advance. Keep in mind that every organization and work teams are different, so you should adapt it to your team in the best possible way.

Bibliography

[1] J. E. Doerr, Measure What Matters: Okrs, the Simple Idea That Drives 10x Growth. Great Britain: Portfolio, 2018.

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