An Executive’s Guide To OKR

Alex Bartholomaus

Alex Bartholomaus

Alex Bartholomaus started People Stretch Solutions, a DC-based management consulting firm, in 2009 to help CEOs scale their organizations. Alex is a published author and professional speaker on the topics of OKR, Sales Effectiveness, Elite Business Performance and Emotional Intelligence.

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An Executive’s Guide To OKR

A framework to engage your organization and optimize performance

Introduction

People Stretch Solutions is a Washington, DC-based management consulting firm with expertise in sales growth consulting, c-level advisory, and OKR consulting. We work with leaders to get organizations focused, inspired, and aligned!

We have seen firsthand how organizations spend valuable time creating a detailed strategic plan, only for it not to come to fruition at the end of the year. This gap between strategy and execution derives from a variety of factors ranging from conflicting priorities, inadequate communication, lack of alignment, and accountability. If you find yourself in this situation, ask yourself the following questions:

  • Is everyone in your organization aware of how their work contributes to progress on strategic initiatives?
  • Are all employees clear on who owns what aspect/s of the plan?
  • Are all organizational priorities clear to everyone?
  • Is everyone in your organization spending time on the most important things?

If you answered no to any of the above, the OKR (Objectives and Key Results) framework would remove these obstacles to executing strategy.

OKR is a collective goal-setting framework that allows organizations, teams, and individuals to set measurable goals on a regular cadence. The process of following the framework enables companies to engage in more frequent strategic conversations across the entire organization related to the goals that will make a positive impact on organizational success and growth. Implementing a framework that boosts participation in the middle and lower levels of companies improves alignment and transparency across the organization is the best way to begin closing the gap in execution.

This guide is for the curious leader who is interested in learning more about how to leverage the OKR framework to engage your organization and optimize performance. OKRs are proven to increase alignment, accountability, and growth across the whole organization. The OKR framework can remedy medium and long-term strategic issues by helping organizations establish clear priorities and engage in effective time management.

The Evolution of OKRs

Organizations have utilized a variety of goal-setting frameworks to clarify and accomplish their goals. First, there was an interest in setting and measuring goal achievement at the individual level. Performance appraisals were suggested in the early 1800s by Robert Owen, a philanthropist and social reformer. This era brought the concept of KPIs (Key Performance Indicators), which developed as a means to define performance measurably. KPIs helped organizations pinpoint what they needed to achieve their goals, setting specific targets such as “grow revenue” or “increase the number of signed contracts.”

Then in 1954, a man named Peter Drucker adapted this framework to the business level with MBOs (Management by Objectives). MBOs aimed to cultivate a result-orientated organization by encouraging management to agree on qualitative or quantitative Objectives and set these as goals. Unfortunately, while popular in their time, KPIs and MBOs each distinctly focused on one level of the organization and did not encourage alignment and collaboration throughout it.

The pervasiveness of the gap between strategy and execution pushed Andy Grove, a businessman, engineer, and author, to adapt these concepts again in 1968. Grove’s transformation joined the KPI concept of identifying measurable outcomes for individual performance with the MBO principle of developing and communicating organizational goals, resulting in a framework that was significantly more transparent, measurable, and relatable to all levels of the organization – OKRs! As Christina Wodkte, an author, professor, and OKR connoisseur, says, “OKRs are more effective at uniting a company than KPIs [and MBOs] because they combine qualitative and quantitative goals… a strong OKR set can unite an entire company around a critical initiative.”

At the time of this transformation, Grove was working at Intel and, in 1974, was joined there by John Doerr. Doerr learned the OKR method from Grove and went on to join the venture firm Kleiner Perkins Caufield & Byers, which was one of the first significant investors in Google. Doerr helped to implement OKRs at Google, where they are still in use today! Many other successful organizations such as Amazon, LinkedIn, Adobe, and many high-growth start-ups utilize the goal- setting framework called OKRs.

OKRs help organizations drive progress by defining desired outcomes and aligning teams. As John Doerr said in his 2018 Ted Talk, “Truly transformational teams combine their ambitions to their passion and their purpose.” Using OKRs, organizations can identify what their top goals are to achieve clarity on direction, align their organization on what matters most, and drive progress through communication and collaboration. Thus, organizations everywhere are utilizing this framework to gain a competitive edge and grow faster than ever before.

1954

Peter Drucker creates MBOS

Peter Drucker adapted this framework to the business level with MBOs (Management by Objectives). MBOs aimed to cultivate a result -orientated organization by encouraging management to agree on qualitative or quantitative Objevtives and set these as goals.

1968

Grove adapts MBOs and KPIs to OKRs

The pervasiveness of the gap between strategy and execution pushed Andy Grove, a businessman, engineer, and author, to adapt these concepts again in 1968. Grove’s transformation joined the KPI concept of identifying measurable outcomes for individual performance with the MBO princible of developing and communicating organizational goals, resulting in a framework that was significantly more transparent, measurable, and relatable to all levels of the organization – OKRs!

1974

Doerr goes to Intel

A the time of this transformation, Grove was working at Intel and, in 1974, was joined there by John Doerr. Doerr learned the OKR metod from Grove and went on to join the venture firm Kleiner Perkins Caufield & Byers, which was one of the first significant investors in Google

1999

Doerr introduces OKRs to Google

Doerr helped to implement OKRs at Google, where they are still in use today! Many other successful organizations such as Amazon, LinkedIn, Adobe, and many high-growth start-ups utilize the goal-setting framework called OKRs.

2017

Doerr publishes Mesure What Matters

OKRs help organizations drive progress by defining desired outcomes and aligning teams. As Jhon Doerr said in his 2018 Ted Talk, “Turly transformational teams combine their ambitions to their passions and their purpose.” Using OKRs, organizations can identify what  their top goals are to achieve clarity on direction, align their organization on what matters most, and drive progress through communication and collabration.

What are OKRs?

The OKR Framework

Andy Grove found three problems with how goals were being used back in the ’80s. If the goals were only numbers, they do not help align the team. If the goals were clearly articulated but not measurable, they cause people to miss more often than achieve the goal. Lastly, top-level goals often do not inspire employees at the team or individual level. To solve this problem, Grove came up with the OKR Framework. In this quarterly goal-setting framework, he would require the leadership team to decompose top-level goals into two parts: Objectives and Key Results. Once complete at the top level, he would mandate his executive team to have department level leaders to set OKRs called contributing Objectives which would cascade down from their own.

When possible, this process would repeat down to the frontline employees in a 2-week strategic planning period. The result was an increase in focus, inspiration, alignment, empowerment, and ultimately accountability around the areas of the company that would drive growth. The balance of the quarter was spent on execution reviewing OKRs on a team and one on one basis. Lastly, the final week of the quarter was reserved for a retrospective where success would be celebrated and failure would be learned from.

Objectives

An Objective is the “what” part of your goal. At the top level, it is what all people in your organization should be able to get behind. Further than what we want to accomplish, they are about intent and direction! They also need to be inspirational, aspirational, and exciting.

Many times it is the WHY that truly inspires people, so it is a key component in the creation of an Objective. Because objectives are intended to be bigger and inspirational, we recommend having only 2-3 objectives per person.

They represent the 'North Star,' which guides with its light every team member in the same, bright direction.

John Doerr, Measure What Matters

When your team is first sits down to write OKRs, it is crucial to spend time collaborating on how the top-level Objectives are written and to ensure alignment with company priorities. Here are some examples of Objectives with an efficient version turned into a more inspiring one:

Key Results

Have you ever set a goal and not accomplished it?

All too often, we set inspirational goals for ourselves or businesses, but do not clearly define what success is. We do not go on vacation without a clear destination in mind, so why would you do the same with goals for your business, team, or self?

Key Results are the outcomes by which we measure progress and success. They represent the end state which you or your organization aims to achieve. Typically, 2-3 Key Results are sufficient to quantify success for an Objective quarterly. Key Results are aspirational, so they focus on the best possible result. They are numbers that quantify the end state we want to attain, not actions (aka inputs) we take to get there and help focus efforts on what creates the most value. It is critical to have a balance of KRs so that you can be sure to achieve all the right outcomes.

When a company sets their first Key Results, it is important they are outside of people’s comfort zone but still attainable. An organization has to balance pushing for aspirational while nourishing its team sense of accomplishment. In some cases, for the first quarter or two, there could be some Key Results that measure inputs as a baseline before an organization can accurately measure a result and desired outcome.

Here are some thought starters to help you set Key Results:
  • If we accomplished (insert Objective), then we would have/see________ at the end of the quarter.
  • What would be a great outcome?
  • What would you have more or less of if you accomplish the Objective?

When implemented appropriately, the OKR process assures that everyone in the organization has clarity on what to accomplish. Greater clarity and alignment in the organization occurs as each level of contributing Objective is set, so employees know what they are responsible for and how it connects to the top-level Objectives.

Key Results are outcomes not inputs.

What is a full OKR lifecycle?

The OKR Framework

Strategic Planning

In this part of the OKR lifecycle, leaders need to meet quarterly to set the top-level Objectives. The most critical aspect is to involve enough people to set initial top-level Objectives that resonate with the company. In many cases, this activity will happen at a day or multi-day offsite. We recommend this as opposed to attempting OKR planning throughout a regular workday.

Given the size of a company, departmentlevel Objectives can also be set at the offsite. A group needs a fast start with OKRs to share them with the remainder of the company after the offsite, so they can begin aligning their Objectives to the top level and department level ones. Leaders should participate in many conversations with their colleagues and direct reports to ensure there is alignment and that Objectives have been rationalized and deconflicted. In the cases of cross-departmental Objectives, the necessary coordination needs to be identified, understood, and accepted.
Cross-departmental conversations create alignment and accountability throughout the organization, generating less waste and more value.

This part of the lifecycle comes to an end with a formal session involving the leaders where they communicate the OKRs they have committed to for the quarter. This is a powerful, motivating anchor because of peer accountability and transparency. The OKRs are stored in a central repository so everyone within the company should be able to review them unless considered confidential (i.e. M&A, HR matters, etc.)

In the beginning, this process can easily take more than 2 weeks, but with a couple of quarter’s worth of practice, this process can require less time.

Execution

In the execution phase of the lifecycle, leaders are working on their OKRs with their respective colleagues and teams. Two critical aspects that leaders need to ensure they are implementing correctly are team reviews and individual meetings.

In the case of team reviews, a leader or manager needs to review how the team’s OKRs are performing at least once a month. We recommend that a team look at it bi-weekly or even weekly in the first quarters of implementing OKRs. It is also recommended, in the spirit of transparency, to discuss individual OKR performance in a team setting. This will be particularly awkward at the beginning for an organization that does not have an open culture. In time, it will assist in the positive peer pressure created by having these open discussions.

In the case of individual meetings, managers and leaders need to leverage OKRs to improve their one-on-ones by having better conversations focused on achieving OKRs as well as facilitating more fluid two-way feedback between a manager and their direct report. In some cases, it also allows a manager to recognize when a direct report is making progress.

In the event an organization leverages an OKR software tool, additional value can be realized in one-on-ones thanks to automated reminders to update OKRs before, as well as some other features this guide will reference in a later section.

Retrospective

In this final phase of the lifecycle, a leadership team down to front line teams conduct a retrospective of the quarter to celebrate the OKRs achieved and learn from the ones that were missed. An organization needs to have a strong, open culture that allows employees to feel safe when talking about why they might have fallen short on a specific Objective. The key in each of these sessions is to ensure people are recognized for achievement for the successful execution of OKRS and insightful learning from falling short as well.

How OKR impacts Culture

Now more than ever, CEOs and leadership teams need the ability to ensure alignment at all levels of their organization and pinpoint any potential gaps in accountability. Accomplishing this requires a framework that is agile enough to survive rapidly changing conditions but detailed enough to reach down to each individual employee.

Organizations tend to fall short in several consistent ways. There is a lack of alignment, and this challenge can manifest itself in different manners: There might not be alignment in the leadership team; The alignment might break down at the department level; the lower level of the company does not understand how they contribute or impact the organization’s strategic plan. Another common pitfall is despite a thoughtful strategic plan, no one is clear on who owns what aspects of the plan, and no one checks up to ensure progress, so execution varies across the organization. When ownership and how success is measured are not clear, it causes organizations to be very reactive. Inevitably, priorities vary between not being clear or there being many, resulting in time spent on things that do not make a significant impact on what matters most. Knowing that all these issues hinder our ability to succeed, organizations are turning to OKRs as a solution.

The OKR (Objectives and Key Results) framework has been executed successfully by organizations of all industries and sizes. Many top tier organizations rely on OKRs to help identify strategic priorities, improve alignment and transparency throughout the organization, and drive accountability and results. Today we find that companies who make their organizational Objectives aspirational, inspirational, measurable, transparent, and aligned to teams and individuals are succeeding at reaching the goals that they previously have not been able to.

As previously discussed, OKRs have a multitude of benefits. Here we will discuss eight key benefits that OKRs provide: Focus & Inspiration, Larger Coalition of the Willing, Cascading Drives More Conversations, Alignment & Accountability, Greater Individual Commitment, Team Transparency, Individual Acceleration, and Culture of Stretch.

Focus & Inspiration

OKRs are the intersection between inspiration and focus. Grove found MBO’s to be very antiseptic and lacking in purpose. He wanted his leaders to articulate their Objectives in a manner that inspired their respective teams. As John Doerr, the leader of OKRs, said, “Ideas are easy. Execution is everything.” The proper combination of inspiration and focus can fuel a workforce and point it in the right direction. OKRs allow leaders and teams to focus on making challenging but necessary choices. Rather than relying on the typical and ineffective laundry list of initiatives or tasks to accomplish, OKRs put a spotlight on the top priority for each leader, department, team, or person in a quarter. Well written OKRs at the top level and department level magnify the big picture (O) and what needs to happen summarily to measure success in terms of progress toward achieving that (KRs).

Organizations high in trust are 2.5 times more likely to function as a high-performance organization with revenue growth than lower performance organizations. Further, eighty-one percent of those working for companies with a strong mission stated their stakeholders hold trust for their leadership team, whereas that number was 54 percent for organizations without a strong mission

William Craig, Forbes Contributor

Leaders appreciate how OKRs force a focus on the inspiration part of goal setting. It becomes evident how powerful OKRs can be as a performance management tool when they share the well written top-level Objectives with their team and observe how engagement increases as people align the department’s or team’s Objectives to the high-level Objectives. The benefit of an inspiring leader and a tool that helps engagement is higher organizational trust.

Larger Coalition of The Willing

The OKR framework demands an organization to involve more employees in the strategic planning process. Depending on the size of the company, this might start with involving more members of the mid-level management team and key employees. This larger group gets to work on the toplevel Objectives resulting in more champions to push the company’s mission to its employees. What further strengthen this coalition is the frequency in which they meet. Most companies focus on strategic planning only once or twice a year. It is critical to do it quarterly in varying degrees to help keep the larger coalition willing focused on growth and execution.

Cascading Objectives Drive More Conversations

The strategic planning phase of a quarterly OKR cycle increases conversation around what matters most to an organization. This uptick in communication is a result of leaders cascading down top-level Objectives to departments, teams, and frontline employees. The mission, vision, and values of an organization bubbles to the top of conversations with higher frequency as Objectives are discussed and Key Results are set. In the past, many companies had these conversations infrequently because their goals did not align to these key elements of the company. Thanks to the frequency that leaders, managers, and employees being communication, OKRs force alignment by engaging employees in quarterly conversations around contributing Objectives, it leads to a great connection in the mission and increased engagement. According to research done by Imperative, a coaching technology platform, mission-driven workers are 54 percent more likely to stay for five years at a company and 30 percent more likely to grow into high performers than those who arrive at work with only their paycheck as the motivator.

Alignment and Accountability

In most organizations, the executive team is the only group consistently aligned on the organization’s strategic plan due to proximity, visibility, and participation in the creation. Within the plan, the C-suite sets the goals and inevitably owns the results each quarter. This leads to most of the organizations not having high degrees of accountability lower in the organization.

Alignment and Accountability should occur at all parts of the OKR lifecycle.
The cascading nature of pushing Objectives down to the frontline employee helps everyone get involved and have a better understanding of the top-level Objectives every quarter leading to great alignment.

When each level creates OKRs that align to a level above, organizations can achieve harmony on how OKRs contribute to the organization’s bottom line and strategic priorities. This additional level of participation and understanding drives greater “buy-in” from the balance of the company. The OKR framework calls for an increase in tracking of progress on the Objectives, keeping employees at all levels stay focused on their commitments.

According to MIT Sloan Business Review (2018), only 51% of the top-level team could name the strategic priorities of the organization. This only got worse lower in the organization, with just 13% of frontline employee’s aware of the organization’s strategic priorities. These are scary numbers because people the majority of their time on the work they believe is most important. If they are unaware of the organization’s priorities, they may have a difficult time deciding what truly makes an impact.

Overall, the greater “buy-in” and higher frequency of tracking will increase alignment and accountability through the organization.

Aligning ensures…
1. No duplicate efforts
2. All aspects of an Objective are covered
3. Agreement on level of metrics
4. Understanding of how OKRs support and impact each other across the organization

Align with team members
1. Be sure to share your OKRs with other members of your team that are contributing to the same OKRs.

Align with other departments
2. Be sure to discuss with other departments or teams that may contrivute to the same top-level objective to align and prevent overlap.

Align with your leader
3. Lastly, be sure to discuss your OKRs with your leader to ensure you are working on what they see as your top priority.

Greater Individual Commitment

OKRs foster commitment and become social contracts for your organization. At the end of the strategic planning phase of the OKR cycle, leaders must commit to each other on what Objectives and Key Results each of them will be working towards for the quarter. This session serves two important purposes. It builds stronger commitments because the it is done in a public forum of peers and higher-level leaders, bringing transparency throughout the quarter and greater peer accountability. The other important purpose is to get leaders, managers, and employees out of planning mode and into execution mode. It is very natural for employees at all levels to want to get off to a good start of the quarter. By making it clear that planning has ended with clear commitments around OKRS for the organization, departments, teams, and individuals, the execution race has begun.

The meeting allows everyone to get aligned and cover off any remaining conflicts or crossdepartmental dependencies that can get lost in the strategic planning phase of the OKR cycle, most notably in the beginning of introducing OKRs in your organization.

It is difficult to hold individuals accountable unless they are committed to the outcomes the organization desires. Once OKRs are created to be inspiring and focused, the organization must include the team and help them align. Doing so creates awareness around everyone’s contributions, makes a public commitment to the leader and team, shares OKRs with everyone, and enlists any support needed. Throughout the OKR cycle, commitment is continuously reinforced through progress check-ins, monthly reviews, and one-on-ones with team leaders. Commitment helps to ensure that OKRs are active and that each person is working diligently to achieve them.

The CEO is the most critical example of commitment to OKRs. Most OKR implementations that fail do so because of a lack of CEO commitment. The CEO must be regularly involved and visible as a person that values OKRs. The CEO sets the tone for the entire OKR implementation and is vital to the success of OKRs based on his/her ability to demonstrate the value they see in OKRs and their commitment to sticking to the process. The CEO must be involved in the planning cycle. Further, the CEO must make OKRs a part of their daily conversations and reinforce the importance of striving for the future of the organization.

Team Transparency

Once a company moves into the execution phase of the OKR cycle, leaders and managers need to bring OKRs into team meetings so the focus and tracking around OKRs can create visibility within the team and ultimately across the organization. Increased visibility leads to transparency around team and individual performance. Many CEOs want this for their organization, however, there often is not a structured way to do it for teams, outside of sales, due to challenges with measuring progress on department, team, and individual performance. In the execution phase of OKRs, progress is being reflected in the Key Result, and it helps everyone understand how different levels of the organization are performing. Transparency boosts communication and leads to under performers getting help from people other than their managers.

Individual Accelerator

Another key part of the execution phase of the OKR cycle, is the focus to improve one-on-ones’ by discussing OKRs on a weekly basis. This new addition to one-on-ones ‘can have a performance acceleration effect if leveraged correctly. The key is to use the information and spend time discussing how to stay focused, increase the velocity of progress, review previous tactics, and develop news on to make progress on the KRs. In “Measure What Matters”, Doerr refers to this effect as CFRs: conversations, feedback, and recognition. Leveraging the OKR framework gives a leader/manager an opportunity to increase the frequency of the 3 aforementioned items as well deepen the quality of interaction, thoughtful feedback and timeliness of recognition.

Culture of Stretch

OKRs build winning teams. They motivate us to excel by doing more than we ever thought possible! Companies only get to that point by establishing a culture where employees feel safe to stretch. The most important place to begin this cultural shift is in retrospectives. This is the end of the quarter session where the leadership team and other departments and teams independently review how they performed against their OKRs for the quarter. In these sessions, it is important to celebrate the winners and learn from where people fell short.

It is also important to highlight the people who took chances by setting loftier goals. In the case of the latter, employees will get more comfortable with setting more ambitious OKRs if they see that the world does not end if they fall short. The organization will value their efforts even though the KRs were accomplished.

Google’s “Ten things we know to be true.” mention ambitious goals directly: “We set ourselves goals we know we can’t reach yet because we know that by stretching to meet them we can get further than we expected.” Goal-setting theory says that goal achievement is facilitated by setting specific and challenging goals. OKRs provides you an opportunity to set more ambitious goals provided leadership has done their part in making a safe environment for employees to be ambitious and miss before they actually achieve their OKRs.

Rolling out OKRs

It is best for organizations to start small at first — for example, implementing OKRs with only the leadership team or leadership team and early OKR adopters for a full quarter. Starting small allows them to practice execution and develop the discipline they need to cascade down to another level. Once that quarter is complete, identify potential OKR champions in different parts of the company to onboard them for a quarter. Continuing this process will build momentum for the organization, fueling it towards its goals. Before you start the initial rollout, here are some important questions to consider:
  • Who will participate in the first quarter of
  • OKRs?
  • What members of the leadership team and/or broader organization participate in writing the initial top-level objectives?
  • How many Objectives should each participant own?
  • How many Key Results should each Objective have?

Writing Objectives

The first step to writing Objectives is defining your top-level Objectives, so the direction of the company is clear to all before they begin the process of creating personal Objectives. Top-level Objectives are the organization’s primary focus, and all other Objectives should cascade down from them.

When leaders think about writing an Objective, they need to be clear on their intent and the direction they want to head. If they know this, they should be able to answer the questions of what they want to accomplish and why it matters.

Objectives are ambitious and should feel somewhat uncomfortable.

Rick Klau, Google Ventures

Many times, it is the ‘why’ that inspires people, so it is a crucial component in the creation of an Objective. It is important to discuss objectives in a group to ensure they accomplish this aim. Since Objectives are lofty and inspirational, we recommend only 2-3 Objectives per organization or person to start. Remember, Objectives should not be comfortable!
Questions to ask:
  • What do you want to accomplish, and why is it important?
  • How does this align and contribute to the organization’s Objectives?
  • What should we focus on first that will add the most value?
  • If read by others, will it inform their choices?

Writing Key Results

A Key Result is how you measure success relative to an objective. Most organizations begin to struggle in setting KRs outside of sales, employee engagement, or other popular metrics which do not quantify organization success on a broad level. A model to follow is setting a key result that has a starting and target value, sometimes referred to as X or Y. For example, a Key Result could be a Net Promoter Score increase from a starting value of 75 and a target value of 80. You want the target to be aspirational, so think of the best possible outcome.

Key Results are typically in units of dollars, percentages, or a number, as you see in the example above. We highly recommend to avoid setting a key result on a binary basis (complete or incomplete) at the end of the quarter, even though many OKR software tools default to this setting. We recommend utilizing well-defined metrics or identifying milestone percentages.

Try to measure a frequency that will tip managers off to risk or help the organization focus on the areas that need the most attention. An ideal metric’s progress can be updated on a regular cadence throughout the quarter to track progress, and the data to report should be accessible. Data for Key Results tend to be found from other people, internal systems, or workflows.
If it does not have a number, it is not a Key Result.

Marissa Meyer, Former VP Google

Questions to ask:
  • What would be great
  • What will you have more or less of if you accomplish the Objective?
  • WDefine the best possible results – not most probable – so likely won’t hit 100%
  • Number quantifying an end state, not action items, or opinions
  • Where you will focus efforts because it creates the most value
  • Balancing Key Results helps achieve the right outcomes
A common challenge faced in an initial roll out of OKRs is setting key results at the first level down from top-level objectives. In the contributing objectives, leaders face some challenges in setting the key results that will speak to their respective department, team, or individual performance. Another common challenge in an initial phase is measuring outcomes in the absence of the baseline. In these cases, it is accepted to measure inputs in terms of what teams need to do to drive an outcome.
Top-Level
Top-level OKRs should be set by the executive leadership team before being rolled out to the remainder of the organization. It is critical that top-level objectives are designed to inspire as many levels of the organization as possible and that the Key Results can be easily understood by anyone. We recommend having 2-3 Top-Level Objectives with 2-3 Key Results per. Here is an example of an organization’s top-level OKR
Department
Departmental or team OKRs should be set during the ‘Team Planning’ phase of Strategic Planning. You should introduce the toplevel OKRs to the next rung below, let them come up with contributing Objectives which are relevant to them, and then share across teams to the whole organization to align and prevent unneccessary waste or overlap. Here is an example of a marketing department’s OKR.
Individual
On the individual level, OKRs are meant to focus and inspire. They are supposed to drill down the big two to three things which you are supposed to accomplish this quarter (Objectives) and how you know you have gotten there (Key Results). Individual OKRs help create accountability and provide a springboard for one-on-one meetings. Here is an example of an OKR from a marketer.

The Tension Between OKRs and Project Management

A common pitfall for many organizations implementing OKRs is they attempt to turn OKRs into a tool to manage project completion and deadlines in a quarter. This happens when a company allows the OKRs to measure or track inputs as opposed to outcomes. It is important to allow inputs for a baseline but to quickly shift the focus in the next quarter to the outcomes that inputs will produce. If an important marketing project will be completed this quarter and lead to more leads in the future, The key result for this quarter would be project completion and for the next quarter would center around increase in leads, potentially closed revenue, etc.
It is important for leaders, managers, and individual employees to have a plan to achieve their respective OKRs. Those plans should not live in the OKR framework in terms of an objective having 6 key results which are all project milestones. The plan should live outside of the OKRs and potentially in a project management platform like Asana.

People Stretch's 8 Principles for OKR Success

We have successfully implemented OKRs in dozens of organizations and have put together a list of eight principles that we use to ensure a successful OKR rollout in any organization. Implementing OKRs is no easy task and requires a high level or coordination, co-operation, and sophistication to be successful.

1. Top-Level Objectives Must Inspire as Many Teams as Possible

People Stretch has found that efficiency can sometimes get in the way of writing OKRs that are inspire. A couple of factors play a role in this challenge: brevity and who is in the initial group. While brevity is a plus in many things, it can work against you in writing objectives that inspire. It is important to attempt to imbed the “why” so people can get behind the objective. It is also important to ensure that all the company’s stakeholders are represented in the objective writing process. In some cases that can be directly in the group that drafts them, or leaders need to do a good job to ensure their representation throughout the initial writing of the top-level objectives.

Common Mistake:

A CEO, executive sponsor, or small group of executives dominate the writing process and the top-level objectives miss the mark because of the final product and the process that was followed to develop them.

2. Make OKRs a Team Sport

Traditionally, strategic planning might be done at an executive offsite with goals and priorities set by a select few once or twice a year. OKRs change this by mandating quarterly strategic planning and involving not just executive leadership, but the broader leadership team and some participants from mid-level management in the process. This larger group champions OKRs after the offsite to socialize them with the remainder of the company in a two-week planning period at the beginning of each quarter. To get these champions off to a great start, they need to do some OKR training prior to sitting down to write the initial OKRs in order to increase the quality of the output. I appreciate the book, “Measure What Matters”, but reading that before an off-site isn’t enough as the book doesn’t cover how to implement OKRs.

Common Mistake:

OKRs are pushed out by a few people in a top down fashion without developing buyin due to the small group involved drafting the top level objectives and socializing with the rest of the company. In the case more people are involved, they are not adequately prepared to participate in writing top level objectives.

3. Leadership Encourages OKR Converstations Early and Often

In the initial phase of strategic planning, the sharing of top-level objectives and subsequent work on contributing objectives enables companies to have meaningful conversations about the top-level objectives and how individuals can contribute at the next level down. Additional conversations with other people, teams, and leaders have a great impact on your OKRs, as some may be able to assist you in achieving them, or you may identify a dependency that impacts your OKRs or vice-versa. Having these conversations elevates the collective awareness and engagement in OKRs.

Common Mistake:

The general mistake companies make in rolling out OKRs is no one tracks the conversation that should be happening prior to the OKR finalization session. There is a direct correlation between the conversations and the alignment the organization is seeking by adopting OKRS.them.

4. Is Your Organization Ready for Transparency?

The OKR framework demands transparency from the top-level objectives down to the lowest level your organization implements in the initial roll out phase. It is important for leaders to prepare the organization for a greater level of visibility around OKRs. Increased visibility leads to greater transparency. It begins with centralizing all the organizations OKRs in one place and allowing all employees to view them. It continues in the execution phase as leader maintain visibility through team reviews and one-on-one’s.

Common Mistake:

Companies generally struggle with transparency in several ways. The first challenge is they do not prepare the employees for visibility and transparency around OKRs. One the OKRs have been introduced, they are not always centralized so everyone can view them. Additionally, they fall into the “set and forget” trap by not review them with the frequency that is required.

5. Success Requires Committing to OKRs in Public

The initial phase of strategic planning comes to an end when leaders leverage a group session to finalize their OKRs, committing to each other what they will be working on for the quarter as a department, team, or individual basis. Individuals cannot be accountable unless they commit to the outcomes the organization desires. PSS recommends this approach align teams and cultivate awareness around how everyone is contributing. The team should make a final public commitment to the leader and team by sharing their OKRs with them and enlisting any support needed. This process will also help develop peer accountability as teams and departments have a better understanding of how each department or team is impacting the outcomes the company is working towards. The final benefit of this session is to transition the focus of leaders and below from planning into execution mode.

Common Mistake:

Companies make is do not do this session and the level of alignment and commitment around OKRs suffers because of this miss. Leaders need to be patient in getting through the strategic planning phase of the OKR cycle as a hasty transition to execution will lead to lower effectiveness.

6. Review OKR Progress at the Team Level

PSS has seen companies struggle in 2 ways with retrospectives. The first way is by not doing them at all. Leaders are anxious to begin planning the next quarter without looking back and taking stock of performance and what could or should have been learned in the quarter. The other way organizations struggle when they do attempt a retrospective, is they have not created a safe environment for employees to be open about falling short. This lack of safety will ultimately cause employees to avoid stretching for big ambitious objectives.

Common Mistake:

Companies do not do team reviews with consistency. If they do them in the first quarter of implementation, they do it monthly and that is not frequent enough to get the needed momentum on working towards objectives.

7. Master the Weekly Check-In

Another important part of the execution phase is bringing OKRs into your one-on-ones. The purpose is to maintain focus on how each team member is working towards them. Companies adopting OKR must commit to mastering the weekly or bi-weekly check-in.

Mastering means that the leader is prepared to have a conversation rather than a status update. The leader nurtures a rich conversation around the OKRs and tactics to work towards advancing progress. It should include two-way feedback early and often as a manager should give feedback on how to progress OKRs and the employee should give the manager feedback on the effectiveness of the suggested tactics. As an employee starts to get velocity on progressing an OKR, a thoughtful leader knows when to leverage recognition. This form of motivation is the most cost-effective way of helping your people drive results. The one-on-one setting allows a leader to be more direct if an employee is falling behind or struggling with an objective that cannot be addressed in the team setting.

Common Mistake:

Leaders do not ensure OKRs are being used correctly in one-on-ones, if at all. Many leaders make the mistake thinking that since OKRs might have been reviewed at the team level, that additional time is not required at the individual level. It is a missed opportunity to spend time reviewing them in one-on-ones.

8. Retrospective

OKRs have a close relationship to the principles of Agile. In order to finish a OKR cycle, an organization’s leaders need to review how everyone performed against their OKRs at the top, department, team, and individual levels depending on the size of the company. It is in this session where it is important to celebrate the people who met or exceeded their OKRs. It is also important to learn from why people fell short on their OKRs and the types of things they will do differently in the future. When we learn and celebrate as a team, we strengthen relationship bonds and increase collaboration.

Common Mistake:

PSS has seen companies struggle in 2 ways with retrospectives. The first way is by not doing them at all. Leaders are anxious to begin planning the next quarter without looking back and taking stock of performance and what could or should have been learned in the quarter. The other way organizations struggle when they do attempt a retrospective, is they have not created a safe environment for employees to be open about falling short. This lack of safety will ultimately cause employees to avoid stretching for big ambitious objectives.

OKR Software Tools

In the OKR framework, where OKRs are stored can be a shared Word document or a cloud-based software solution designed for OKRs. PSS highly recommends the latter due to how technology can help accelerate the effectiveness of a process. Most modern OKR tools add value in the following ways:
  • They make it easy to view OKRs in a variety of ways such as: by top level objective, department, team, or individual. When OKRs are in a spreadsheet, manipulating the data to review it in these different ways can be cumbersome given the size of a company.
  • OKR software generally has automated reminders which increase utilization.
  • OKR software has weekly check-in features, allowing a leader to get an update from all their direct reports on OKR progress ahead of their one-on-ones. This allows the one-on-one to be focused on tactics to advance OKRs.
  • OKR software makes team reviews more efficient given the team and other dashboards as well as easy click down features to go into the details of an individual’s OKRs.

It is important to have some pre-work done before implementing OKRs and an OKR software tool within an organization. The sequence in which OKRs are developed needs to happen before the OKR software tool is implemented otherwise it can be tricky given the size of the initial implementation. OKR software can be broken down into one of three categories:

OKR "Pure Play"

First-generation software platforms that only focus on OKRs. Generally, they can be the most cost effective as well as integrate with other software systems in your tech stack.

OKR with Performance Management

2nd generation OKR software platforms that did annual reviews and real time feedback added OKR capabilities to their software package.

OKR and Project Management

Project management tools associated with software development started promoting OKRs several years ago. Recently we have seen more options pop up with better capabilities.

PSS OKR Capabilities

People Stretch supports its C-Level clients by ensuring they spend more productive time working on their business in Strategy and OKRs

  • Visioning & Whiteboarding
  • Strategic Planning & Plan Development
  • Strategic Offsites (half, single, or multi-day)
  • OKR Workshop Facilitation and Coaching
  • OKR Architexture and Rationalization
  • OKR Software Implementation
    • OKR Program Management OKR Team Review Facilitation
    • OKR Accountability Coaching (During Execution)
    • OKR Retrospective Facilitation
  • 2-Day OKR Training Certification

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