Objectives and Key Results (OKR)
Objectives and Key Results, or OKR, serve as the ideal tool for defining and tracking objectives. In this way, organizational leaders establish and communicate what they aim to achieve. Moreover, they clarify the milestones necessary to reach those objectives.
Andy Grove created the Objectives and Key Results framework at Intel. Since then, many companies have adopted this methodology to implement their strategies. Organizations such as Google, Netflix, and Amazon have embraced it.
This blog details the definition of Objectives and Key Results.
Objectives and Key Results Definition – What is it?
OKR stands for Objectives and Key Results.
These serve as the ideal tools for defining and tracking objectives. This enables organizational leaders to establish and communicate what they aim to achieve. Additionally, it clarifies the milestones needed to accomplish those objectives.
OKR - Objetives
An objective represents what needs to be achieved. By definition, objectives are meaningful, concrete, inspiring, and guide actions. When everyone defines and implements objectives properly, they help avoid erratic and inconsistent progress.
OKR - Key Results
Key results enable the organization to monitor progress toward objectives. Key results should be specific, ambitious yet realistic. Additionally, they must be measurable and verifiable, as they must avoid ambiguity. At the end of the established timeframe (e.g., the end of the quarter), you can easily determine whether the organization has achieved the key results. Multiple key results may be necessary to achieve an objective. When the organization achieves all key results, it should consider the objective accomplished.
OKR types?
Teams can categorize OKRs into three types: Commitment, Aspirational, or Learning.
As the name suggests, Commitment OKRs establish binding goals. In other words, by the end of a cycle, everyone is expected to achieve the Objective and Key Result.
Aspirational OKRs, also known as “moonshots,” represent clearly ambitious objectives. Typically, teams can achieve these objectives only in the long term. Moreover, the path to reaching aspirational OKRs may still remain partially unknown. Teams can share these across multiple groups to foster greater engagement and collaboration.
Finally, Learning OKRs define what teams intend to learn. A team may also set learning OKRs to clarify how it should proceed toward another objective.
OKR formula
There is a recommended syntax for writing an OKR. For each objective to be achieved, the organization or team should establish 3 to 5 key results to track the accomplishment of the objective. Optionally, each Objective and Key Result can be written as a sentence using the following structure:
- We will (“Objective”) as measured by (“Key Results”).
For example:
- We will reduce the number of product defects as measured by fixing 90% of identified defects in the backlog, receiving no more than 5% complaints about improperly repaired defects, and reducing the average repair time by 50%.
If you’d like tips on how to write OKRs and see examples, check out our article, “OKR Examples.”
Common Objectives and Key Results Mistakes
It takes practice to define effective objectives and key results. The best way to establish them is collaboratively, leveraging the team’s collective experience. However, there are some common mistakes you should try to avoid when writing them:
Avoid “normal” objectives – OKRs should be disruptive. Avoid setting objectives that simply represent the organization’s recurring activities.
Not establishing KPIs – Objectives and Key Results represent milestones toward success. On the other hand, KPIs (Key Performance Indicators) are measures of performance. You can learn more about KPIs in our article, “OKR vs KPI.”
Setting minimal objectives to lower expectations – OKRs should help achieve meaningful goals. Intentionally lowering expectations is unethical and doesn’t benefit any organization.
Objectives and Key Results tools
There are several tools available, such as BetterWorks, Asana, Gtmhub, and Lattice. However, if you’re looking for a free tool, you can use Google Docs and Google Sheets.
How to grade them?
OKRs should be tracked regularly and graded at the end of each cycle. There are several methods to grade them.
Andy Grove, the creator of OKRs, used a simple “yes” or “no” approach. For example, “Did you achieve 30% growth?” is a binary objective that can be verified.
However, most organizations or teams prefer to include more details in the grading. For instance, you could use a color system where red indicates failure, yellow indicates progress, and green indicates success.
The method used by Google grades OKRs in more detail. Each result is graded with a percentage scale (0 to 100%). Finally, the average of the key result scores determines the objective’s grade.
In summary
OKR, or Objectives and Key Results, is the ideal tool for pursuing meaningful goals. Additionally, it helps define what needs to be done to achieve them.
About Objectives and Key Results
Objectives and Key Results
How to implement OKRs? This article explores the process of implementing an OKR program.
OKR Examples
How to write OKRs – There is no one-size-fits-all formula for writing good OKRs. However, there are some best practices for creating effective OKRs.
OKR Course
What are the advantages of OKR training, what should an OKR course include, and who should take an OKR training?
OKR Framework
Why are OKRs important for companies? This article explores the benefits of using OKRs.
OKR versus KPI
What Are the Differences? This article explores the distinction between OKRs and KPIs.
