OKRs (or objectives and key results) can be a powerful way to ensure that an organization’s leaders, departments, teams, and individual contributors are aligned. With the OKR goal-setting framework, every stakeholder knows which tasks and projects to prioritize and understands how their day-to-day work is driving toward the same broad goals.
But the work to conceive of and write OKRs takes more thought than listing a few stretch goals or checking off a handful of initiatives over a quarter or a year.
The power of OKRs is in their ambition — how the objectives will set the organization on a course toward the future — and their measurable outcomes — how those key results will, very specifically, track progress towards those objectives. And, it can take time and intention for organizations to get the writing of OKRs right.
Here are the steps required to write effective OKRs, along with examples of OKRs for companies, managers, human resources teams and individuals.
The first steps to writing effective OKRs are including the right people and entering the process with the right mindset.
1. Make it top-down.
OKRs are a way for businesses to provide the alignment, transparency, and empowerment that today’s workers expect. According to an analysis published in MIT Sloan Management Review, toxic corporate culture was the leading predictor of attrition during the Great Resignation. Hallmarks of that toxic culture, MIT’s management journal reported, include lack of respect towards employees and a cutthroat workplace with little collaboration between different departments and teams.
For organization-wide OKRs, a top-down approach starting at the highest levels of business — the C-suite and board — is a must. OKRs should reflect inspirational, bold, and ambitious plans that feed into larger business goals, such as the desire to be best-in-class within an industry or bolster workforce wellbeing. Not only do the top levels of leadership have access to time and resources needed to drive these results, they’re also in a unique position to provide clarity and align employees around a shared mission.
Leadership leads the way at Merchant Maverick. “It starts out with the leadership, coming up with the big picture,” Titterington says. “The leadership team kind of zeroes in on what are these key points that we really want to have the most impact.”
2. Ensure transparency.
Writing effective OKRs requires leadership from the very top. But, to be truly effective, they can’t be written in an executive-team silo. It’s important to bring department leaders and other team members together for discussions. Transparency, after all, is a hallmark of effective OKRs — so team members need to understand the reasoning behind objectives, as well as the expectations in place for achieving them.
“[The OKR framework] does tend to be top-down, but if you don’t have some people from below, you won’t get the buy-in that you need,” said Marc Snyderman, COO of the Apolline Group. “You want to make sure that you include at least a cross-section from each layer below it.”
3. Consider your mission and values.
OKRs encompass ambitious, far-reaching goals, and to truly resonate across an organization they’ll need to align with its mission and values. “I never start an OKR session and actually begin goal-setting without reviewing the mission and vision,” Snyderman said. “It’s your North Star.”
Your OKRs must ring true to how you present yourself, as an organization, to the world, said Ellen Slane, an HR business partner at Employers Advantage, an HR consulting firm. Consider an organization that values building a more diverse and inclusive workforce. An OKR that focuses on boosting hiring, but doesn’t address Diversity, Equity, Inclusion, and Belonging (or DEIB), might not get buy-in from the broader team.
“You need to make sure that those values are reflected,” Slane said.
4. Get a whiteboard.
Writing OKRs is an iterative process, involving plenty of brainstorming, false starts, and revelatory moments. Whiteboards and Post-it notes can help flesh out ideas, Snyderman said. At the start of sessions, he usually tries to have some tentative objectives ready.
“And then we just start throwing Post-it notes with the key results on them and put them into the right buckets and clean them up as we go,” he said.
The Anatomy of OKRs
With the right people, mindset, and tools to tackle OKRs, it’s time to start writing. First thing’s first, crafting effective OKRs requires an understanding of their basic structure and practical application.
There are clear differences in the purposes of an objective and their key results. Each asks a different question:
- Objectives pinpoint the big picture goals that an organization aims to accomplish. “Where do I want to go?” is the critical question that organizations must ask themselves as they outline objectives.
- Key Results highlight the actions that will support those objectives. “How will I achieve an objective?” is the critical question that organizations must ask themselves as they draft key results.
Here are some of the dos and don’ts of writing objectives and key results:
How to Write Objectives
DO go big.
Objectives are more than just a goal to finish a project or hit a particular metric, Snyderman said. They’re not SMART goals, for example, which are very specific, measurable, and time-bound. With objectives, “it needs to be a larger thought process,” Snyderman said.
When setting objectives, organizations must go big, developing inspirational, ambitious, sweeping, and bold targets. In broad terms, objectives should spell out the aims and intentions of an entire organization, a team, or an individual. They are typically qualitative, setting direction and expectations for the goals each level of the business will seek to achieve over a period of time.
DO think ahead.
When writing OKRs, Shalabi likes to start with an idea of where the company should be in the next couple of years. Is the vision to be the best in breed solution for the life sciences industry or the most sought-after financial services workplace in the region, for example?
“You need to know where the ship is sailing,” he said. “Being able to articulate that, as a leader of an organization, is foundational to understand where you need to be from a goals and objectives [perspective].”
DON’T forget the “why.”
Once you’ve articulated that vision for the company’s future, you can start to work backwards to devise the objectives that will help the company achieve it, he said. And with each objective, you need to be sure to explain the why behind it.
“They really need to articulate at a high level, the why,” Shalabi said. ”And it’s actually a tremendous amount of wordsmithing to really articulate the why very, very crisply.”
- A poor objective might focus mostly on a project or activity — to get more qualified leads, streamline employee workflows, or optimize onboarding.
- A stronger objective would include the outcome. Getting more qualified leads would allow an organization to grow its market share. Streamlining employee workflows would bolster employee satisfaction. And improving onboarding would help the organization speed up how quickly new employees can perform at their best.
How to Write Key Results
DO focus on actions.
While objectives can be broad and far-reaching, key results spell out the outcomes that must be achieved for each objective. Think of key results as the inventory of actions required for success.
“[Key Results] should be very actionable and specific and attainable,” Snyderman said. “You don’t want your key results to be unattainable or else nothing is going to get done.”
For example, a product team with the objective of launching a new feature will need to take specific actions, such as redesigning a mobile app or completing quality testing. These are ideal key results, because they drive progress toward accomplishing the overall objective.
DO measure progress.
To be effective, key results should establish expectations for how and when objectives need to be met. In other words, strong key results allow teams to measure progress by being metric-driven.
Take the example of the product team – we can take the key result of “redesigning a mobile app” a step further by setting expectations for exactly when this needs to be accomplished. Therefore, a better key result would be ““redesign mobile app by the end of the second quarter.”
DO weigh out priorities.
Not only do metric-driven key results allow employees to gauge whether they’re successful, they also help prioritize the tasks that will have the most impact. Shalabi said. “It gets people thinking at the right order of magnitude.”
Employees need clarity on where to take action when they’re confronted with a variety of projects, so organizations often prioritize some key results over others by assigning different weighted values to each one.
When you assign weight to a key result, you’re signaling how much value it holds to the organization. This practice can help teams rank which projects to tackle first, and allows businesses to account for the influence that individual actions have on overall goal progress.
Shalabi typically weighs key results. “There are inherently tradeoffs,” he said. Weighting key results makes it easier to prioritize which are critical, he said. “[To accomplish them], we will move resources. We will stop projects. We will do whatever we need to do to make sure we don’t miss them.”
Weighting, however, isn’t a given at every organization. For Titterington, limiting the number of KRs per OKR to about three is enough. “It keeps you laser focused on the most important thing,” she said. “You’ve already decided these are weighty.”
DON’T force it.
Not every key result comes with obvious measurements. Consider an objective that focuses on boosting corporate culture to improve employee happiness, Snyderman said. “It’s very hard to measure culture and movement in culture.”
But there could be metrics that might indicate an overall improvement in corporate culture. Those measurable achievements include an increase in retention, decrease in turnover, or improvement in the results of employee engagement surveys or employee Net Promoter Scores (eNPS). Still, it’s not always a perfect science, Snyderman said.
A decrease in turnover over a quarter may be because employees opted not to leave before a long holiday break and not because they’re thrilled with the corporate culture. “You may look to some of those metrics to try to figure out if you’re achieving anything, but you may not be able to figure out what you really achieved in that quarter,” he said.
OKR Application and Coordination
The OKR framework is most effective when the following best practices are applied:
1. Limit the number of OKRs.
When thinking of the big picture, it’s easy for organizations to get carried away with OKRs. An OKR best practice is to write three to five objectives for each group — company, team, and individual –– each of which should come with two to four key results.
“For me, three is the magic number [of objectives], and sometimes you’ll end up with a fourth,” Shalabi said. “It creates a very simple way for the organization to really remember why it’s doing what it’s doing.”
2. Connect teams and individuals.
Good OKRs always connect individuals and team goals to the organization’s overall company objectives. This connection between business goals and employee success boosts engagement and motivation.
3. Keep everybody aligned.
The beauty of OKRs is that they build alignment between stakeholders. There are two different ways to accomplish that.
In strict alignment, key results flow straight into the objectives at the level below them. In the example below, the company’s key results are objectives assigned to teams. And a team’s key results are doled out to individuals.
Directional alignment is more flexible, and objectives and key results don’t necessarily match word for word.
4. Don’t forget about timing.
Whether it’s a new competitor or an emerging technology, organizational needs can quickly change, which is why your goals need to be nimble and flexible. Quarterly OKRs provide enough time for organizations to celebrate some wins, but also allow for regular evaluations to determine if OKRs need to be shifted, updated, or eliminated.
“At least once a quarter you’re looking at the big picture,” Titterington said.
But, to keep everybody focused on those goals, check-ins about key results, in particular, should happen more often — even weekly — to ask questions like:
- What’s the progress on key results?
- How confident are we that we’re going to still meet these?
- What are the impediments that might keep us from our goals right now?
- What should we change now?
3 OKR Red Flags
Organizations can start off strong with great OKRs, but get pulled off course amid day-to-day challenges and unexpected obstacles. Here are three signs your OKRs might be off track.
1. Your OKRs include every single task.
A lot of day-to-day business — preparing for a board meeting or updating marketing plans for an existing product, for example –– does not get captured in the OKR framework. These tasks may need to get done, but they don’t necessarily belong in your big-picture goals. In short, your OKRs are not a task list.
“You have to break it down into what’s the critical path for getting us to the end, and break those into usable objectives,” Snyderman said.
2. Your key results are overly simplified.
Remember: Key results are best when they’re metrics-driven. If your key results simply point to a specific project — such as boosting the number of one-on-ones that managers hold — they may not drive you toward your ultimate objective to improve employee wellbeing, for example. A better key result might be increasing one-on-ones by 30% in the first quarter or increasing eNPS scores by 20%.
Ultimately, key results should guide organizations on whether they were successful in making change, Titterington said.
3. You’re meeting every OKR.
On the surface, meeting every OKR might seem like cause for celebration, until you remember that objectives should be ambitious and bold. If your organization is meeting every OKR, it’s likely that you need to think bolder when it comes to creating goals that push the needle forward for your business.
OKRs are typically graded on a progress scale of 0.0 (no progress) to 1.0 (fully achieved). Under this scoring methodology, organizations should typically target a score of 0.6 or 0.7.
“If you’re hitting everything out of the park, you probably didn’t do something right,” Snyderman said.
Objective: Make our company a great place to work.
- Increase employee NPS score to 40 or higher by X date.
- Decrease regrettable turnover to 3% by end of Q1.
- Process promotions or raises for over 25% of employees each quarter.
Objective: Grow globally by increasing international revenue.
- Increase new sales in ANZ by 10% in Q1.
- Finish raising new capital for our growth needs by X date.
- Build a strong analytics team in six months.
Objective: Become the market leader.
- Launch a new product by the end of Q1.
- Acquire 10,000 new users by end of Q1.
Objective: Improve our NPS Score by 20% to boost customer retention.
- Produce three resources to increase customer satisfaction by the end of the quarter.
- Launch community to help customers share learnings by X date.
- Reduce implementation time of new customers by 50% in six months.
Objective: Increase sales revenue to $3.5 million in Q1.
- Hire two new inbound sales representatives by X date..
- Increase upsell/cross-sell revenue by 15% in three months.
- Generate 530 new customer sign-ups in Q1.
Objective: Increase social media followers by 30% in H1.
- Post three to four times a week on Facebook and LinkedIn to drive engagement and boost SEO.
- Host five product giveaways in Q1 and Q2.
- Experiment with new types of content, such as GIFs and quizzes, to boost likes and shares.
Objective: Build a thriving corporate culture.
- Increase employee net promoter score (eNPS) by X% in six months.
- Improve employee retention rate by X% in six months.
- Reduce the 90-day churn rate by X% in six months.
Objective: Hire top tier software engineers for new product development.
- Evaluate and adjust compensation philosophy by the end of Q2 to ensure competitive value.
- Hire two recruiters specializing in software developers by the end of Q2.
- Connect with three industry associations to increase referrals by 20% in six months.
Objective: Build a more inclusive team.
- All managers complete implicit bias training by the end of Q3.
- Complete DEIB audit by end of Q3.
- Open leadership development program to all employees by the end of Q3.
Objective: Close $200k in new revenue this quarter.
- Demo our product to 100 new sales-qualified opportunities.
- Work with managers on strategies for our top five accounts.
- Attend three industry events in Q1.
Objective: Close $1M in business by the end of Q1.
- Average 50 cold calls a day in November and December.
- Generate a total of $3M in qualified pipeline by Jan. 1.
- Achieve a close rate of 44% in Q1.
Objective: Implement PR strategy to increase brand awareness.
- Secure five media mentions by end of Q2.
- Boost social media engagement by 50% by end of Q2.
- Grow YouTube subscribers by 20% by end of Q2.
Implementing any goal-setting framework is an ongoing and iterative process that shapeshifts according to the needs of the business. Over time, with the creation of every new OKR, organizations should take time to consider learnings from their previous work to set goals and objectives.
“It’s often like a pendulum,” Titterington said. One year, the OKRs might have been too vague. Others might have been too all-encompassing. Some were too complicated. Others were too simple.
“You just have to go back and forth,” she said, “finding that sweet spot.”
Ready to set better goals for your employees and teams? Download Lattice's Workbook on How to set meaningful and effective OKRs for your organization.