Introduction to OKRs

Objective and Key Results (OKRs) - a framework used as a goal-settings system known for its "management by key results" strategy

Components:

1. Objective - The WHAT. This describes the goal, i.e. where the organization wants to go. Here, the organization's direction for the future is considered.

2. Key Results - The HOW. This measures the progress toward the Objectives.

3. Initiatives - The WHY. This shows includes projects and tasks that are being worked on in order to push progress on the key results

Deciding on the Objective

1. Significant

2. Concrete

3. Action-oriented

4. Inspiring

❗️Points to consider❗️

When writing the objective, it should be:

1. Easy-to-understand

2. Easy-to-Remember

3. Should not contain technical jargon

Writing the Key Results

1. Specific and time-bound

2. Aggressive yet realistic

3. Measurable

4. Verifiable

❗️Points to consider❗️

When writing the Key Results, consider the outcomes, not the outputs

Output - something that you do, i.e. a project or task

Outcome - a result of what you do

The Formula for Initiatives

1. Ambition

2. Passion

3. Purpose

Benefits of Measuring the Key Results:

1. Helps quantify the objective and make it specific

2. Helps measure progress toward objectives

• Provides Metrics - qualitative or quantitative measures to monitor how the organization is performing

• Provides a Start Value - the levels of performance the company begins with before achieving a given metric

• Provides a Target Value - the levels of performance the company wants to achieve for a given metric

Why adopt the OKRs?

• Improve alignment across the organization

• Transparency

• Collective Commitment - It needs to be made sure that everyone is pulling in the same direction and working along a common goal

A Brief History of OKRs

Goals vs. OKR vs. KPI

Goals

• it is the direction in which the company wants to go in

• subsets of OKR.

OKRs

• a framework with best practices to help the organization achieve its goals

• a way to formulate those goals

• roadmaps that guide you toward the destination

• temporary goals that are aimed toward the destination, and are constantly changing once waypoints are passed

• solves problems, improves processes, and drives innovation

KPI (Key Performance Indicator)

• a metric to measure performance used to evaluate the success or growth based on quantity or quality outputs of an organization

• permanent indicators that are needed to be constantly done

• monitors performance and identifies problems and areas for improvement

• can be used together with OKR as they complement each other, but they are not the same ideas

Implementing a Strategy

Strategy - Due to limited time and resources, choose only the items that are important to you and your organization. Makes the OKRs actionable

1. Ultimate Goal - the organization’s ultimate winning aspirations

   1. What is the purpose of the business?

   2. For whom is the organization fulfilling this purpose?

   3. When will the venture be considered a success?

2. Strategic Pillars - how-to-win choices that reflect what you’ll do to differentiate yourself in the market and support your ultimate goal

Cadence - the frequency with which the organization and its respective teams set and review their OKRs

• Company level - usually done annually

• Department/Team level - usually done on a quarterly basis

Format

Objective - Something you’re striving to achieve in this year or period

Key Results - are normally quarterly-based specific outcomes needed to be delivered to achieve the desired outcome

So typically, this would give the following format to follow:

Objective

• Key Result 1

• Key Result 2

• Key Result 3

• ...

• Key Result N

For one Objective, there can be multiple Key Results, but not vice versa.

Best Practices

1. Frequently update and review goals on a Quarterly, monthly, or weekly basis.

2. Remember to Close OKRs. Collect and share the learnings from the previous OKRs before working on something new

3. Less is more. Don’t set too many OKRs as it can get too overwhelming

4. Strategy First, OKR second

5. Transparency - involve everyone in the organization to make sure that you’re moving towards your goal

6. Create a rhythm (cadence) for the OKR - standardize the time frames of processes in the OKR

   1. Set

   2. Close

   3. Update

   4. Review

7. Shared (team) objectives, individual KRs

8. Use an app - make use of a process or tool to enable automated, self-directed reporting and management of OKRs

References:

Objectives and Key Results explained (New OKR Crash Course) | Perdoo

Why the Secret to success is setting the right goals | John Doerr

OKRs vs KPIs - Learn the Difference | Weekdone

BSC Basics Overview | Balanced Score Card