I was asked to help people at my current job to use OKRs. One big part of that is sharing what OKRs are and being able to talk about them with confidence, so I revisited some resources about the topic and wrote down some introductory notes.
History and definition
OKR stands for Objective and Key Results. It's a management tool/framework for increasing focus and make sure you/your team/your company is focusing on what's most important. One way of thinking about OKRs is that they try to answer "Where do I want to go?" and "How will I know I'm getting there?".
They are used by small and large companies, including many famous ones like Google, Oracle, Zynga and even Spotify.
Objectives should be:
- Qualitative and inspirational.
- Time bound.
Key results are quantitative metrics that act as a proxy for answering "Have we met our objective?". They should be hard (stretch or super-stretch goals). Ideally they should be set with a confidence level of 50%. Reaching 100% of a key result should be an amazing accomplishment, but reaching 70% should still be considered a success. Starting with a 50% of confidence level should force people to think "outside the box" and work hard to reach 100%.
OKRs should be implemented in layers. Company OKRs should act as a guide for department- and team-level OKRs. One challenge with OKRs is making them actionable, but working with OKRs for teams or departments should help with that (instead of having just company-wide objectives).
For larger companies they should ideally be set for product teams instead of (or only for) functional departments, since each department may have several teams working in parallel on different projects. There is no one-size-fits-all rule for defining objectives, so looking at examples from what other companies are doing can be very helpful.
Everyday work takes focus away from the main objectives. OKRs are a simple and clear way of focusing in the middle of all the noise. This is one of the aspects of OKRs that I enjoy the most.
OKRs provide a structure so you can discuss the goals on every periodic meeting. Progress (or the absence of it) should be marked and the confidence levels for reaching the objectives should be discussed. How are the projects currently being developed contributing to the objectives?
Another important aspect of OKRs is that repeating the objectives on every periodic meeting helps keeping the goals on everyone's mind.
Format for setting up cadence
You should have a routine to follow up on your OKRs. One recommended approach found on Radical Focus by Christina Wodtke are "Monday commitments":
- What are we going to prioritise this week? Do those priorities take us close to the OKRs?
- What's coming up on the next month/weeks? Are we prepared for new efforts?
- What's our confidence level? Did it went up or down? Why?
- Health metrics: Is there anything we should protect while we focus on the OKRs? Do we have any issues?
This should ideally be a very collaborative meeting.
Celebration of progress is an important part of working with OKRs, so you should do it often. When you set difficult goals, there is a big chance you'll fail. However you'll probably make a lot of progress anyway.
Celebration serves two purposes: if you succeed, you should celebrate - you'll probably feel like that anyway, since your key results shouldn't have been easy. But if you fail, not seeing the progress of all the work done can be very depressing, so you shouldn't miss this opportunity to remind everyone of the progress achieved.
You should run those sessions in a very informal way, with food, drinks or whatever fits your culture. It's very important that you have this session structured so people can share progress.
Format for setting up OKRs
This session should not involve too many people since that's hard to control and can be frustrating. It may however pay-off to ask everyone to contribute with ideas or by answering a survey. It's probably important to have a direction like the company strategy for the given year.
- List objectives collaboratively and then prioritise. It may be worth asking people to think about the objectives on the day before the meeting.
- Brainstorm metrics for the top objectives. Pick complementary metrics (revenue, satisfaction, usage). Those will be your key results.
- Set values for the key results. They should be hard but not impossible. Set them with a 50% confidence level they are going to be reached.
- Tweak the objectives. Make sure they are clear, motivational and actionable.
It seems that between 3 and 4 objectives are recommended per period (quarter, year, etc), and each of them should have between 3 and 5 key results. These numbers are probably very context-dependent and I wouldn't be strict about them, specially when it's the first time you do this process.
Setting up OKRs for "service departments" like customer support or IT can be hard. It may be worth involving more people and asking for ideas of how do their efforts can help the company to met their objectives. Again, looking at examples can be a good idea.
Risks and challenges
Setting up poor OKRs is a common mistake. Some common issues are:
- Objectives are not actionable.
- Objectives are not motivating.
- Objectives are actually key results.
- Key results are too easy or too hard.
- Key results are not measurable.
- Key results are not phrased positively.
Not following up the OKRs during status meeting and not learning from initial mistakes and giving up after the first quarter are common issues as well.
To reduce risk when introducing OKRs, it may be worth:
- Start with just one OKR for the entire company.
- Have just one team adopt OKRs before everyone else does.
- Start defining OKRs for projects (less risk, shorter feedback cycle), grows culture.
If your company is really not used working with metrics, it's OK defining one of your first objects and/or key results to learn/find a certain number of metrics that could be useful.
Why I like OKRs
I'm more motivated if I can see how my efforts are contributing to a larger goal. That helps me prioritise my efforts and make decisions, like cutting scope or investing more time on one important aspect.
Sometimes I notice I can't really see how my current task is connected to the company strategy. Questioning whoever asked for the task/project for clarification can be very enlightening.
I also recently started using OKRs for personal projects and this has been an interesting experience. I've set up some very hard (may too hard given my limited free time) key results, but I still think they are doable and I noticed that my brain keeps trying to find ways of achieving them on a reasonable amount of time.
This was just a very brief introduction. Some resources for further reading that I found useful are:
- Radical Focus by Christina Wodtke: that's a very short and accessible book about OKRs. Extremely recommended.
- re:Work's guide to OKRs: another short but great reading about the topic. Wodtke's book is more engaging, but this guide is shorter and free.
- Step by Step Guide to OKRs (Free e-book) by Alexander Maasik