OKRs: Your seriously simple goal setting guide
The nuts and bolts of this goal-setting framework
You want your team to be unstoppable. Not only do you want to be constantly dominating your daily to-do lists, but you want to be making measurable progress toward your biggest goals.
So...how do you make that happen? Close your eyes and click your heels together three times? Rub a magic lamp and hope a wish-granting genie pops out? Cross your fingers and hope for the best?
Sure, go ahead and give those a try. But, if you really want your team to take steps forward, setting OKRs is likely to get you where you want to be faster.
Have you heard of OKRs before? They’ve become a buzzword of sorts, and a lot of the definitions out there are full of jargon and corporate blah blah.
You need a low down, and we’re here for it. We’re answering some of the most common questions about OKRs in language you can actually understand.
What are OKRs?
OKR stands for objectives and key results. It’s a goal-setting methodology designed to push your team toward your biggest goals and help you monitor your progress in reaching them.
Humor us while we give you a quick history lesson. The origin of OKRs is rooted in the “Management By Objectives” system that was founded by consultant and author, Peter Drucker.
Andrew Grove, the former CEO of Intel, then took the system and put it into a simpler form that answered two core questions:
- Where do I want to go?
- How will I pace myself to get there?
Having absorbed a lot of knowledge from Grove, an investor and venture capitalist named John Doerr presented this system to the co-founders of Google, who are frequently credited with popularizing OKRs. Since then, they’ve become commonplace in a lot of organizations – both small and large.
Where do I want to go?
How will I pace myself to get there?
So, what’s an objective?
As the name indicates, OKRs are split into two main pieces: objectives and key results. Let’s talk about the objectives piece first.
To keep this simple, think of the objective as the goal that you’re setting.
With your team, you’ll brainstorm objectives by asking, “What are the most important needles we need to move this quarter?” Yep, that’s a clue: OKRs are typically set on a quarterly basis.
Keep in mind that objectives should be high-level, qualitative statements that are aspirational – not tasks or granular outcomes.
EXAMPLE OBJECTIVE: Launch a new employee portal by the end of the quarter.
And what about key results?
OKRs themselves might not be inherently measurable. That’s the job of your key results, measurable outcomes that indicate you've achieved your objective.
Don’t make the mistake of confusing key results with tasks and to-dos. This is about identifying outcomes, not things for your team to get done. So, make sure you’re that you’re always pointing back to a measurable result.
EXAMPLE KEY RESULT: Shipping the portal increases employee feedback scores by 25%.
Why use OKRs?
This isn’t a popularity contest. But, if it were, OKRs would be winning. You may have heard that tons of big-name companies – including Google, Netflix, Ahnheuser-Busch, Adobe, Samsung, and even us at Atlassian – use them for goal-setting.
But, if name-dropping isn’t enough to convince you, there are plenty of other reasons to use OKRs, including:
- Greater alignment: Everyone is on the same page about goals and success indicators
- Improved flexibility: Since OKRs are set quarterly, those shorter goal cycles allow more wiggle room
- Boosted accountability: Everybody knows exactly how success will be measured and who is responsible for making it happen
- Increased focus: OKRs are thoughtful and well-defined, which boosts focus on the goals that really matter
With those awesome perks, it’s easy to see why OKRs are beloved by so many successful and rapidly growing organizations.
How do you set OKRs?
You want to join the ranks of those teams and companies who are relentlessly pursuing their goals (because who wouldn’t?). Here’s how to go about it.
Start by pulling together a brainstorming session with your team to identify what you most want to achieve.
There’s probably going to be tons of ideas flying around, and likely some debate, about what your objectives should be. This is an instance where the more isn’t the merrier. We recommend distilling them down to no more than three to five objectives for the quarter. You’ll also want no more than three key results assigned to each objective so you don’t add confusion.
Also, keep in mind that OKRs are a better fit for loftier, longer-term goals. You’re not going to use this system to tackle one task on your daily to-do list or a team project that’s wrapping up tomorrow. That’d be way too cumbersome.
With those nuts and bolts in place, let’s briefly walk through the steps you and your team will follow to set OKRs.
Step #1: Share the basics
If this is your first time using OKRs, a lot of this is going to be new to you and to your team members. Save some time at the start to teach your team about the process and terminology so that they’re able to constructively add to the conversation.
Step #2: Set your objectives
Step #3: Identify your key results
You have your objectives, so now it’s time for the team to think about what results you would see and measure if you actually reached that goal. Those should be your key results. Remember, you don’t want more than three for each objective.
EXAMPLE KEY RESULT #1: Infographics improve the user’s time spent on page by 10%.
EXAMPLE KEY RESULT #2: Infographics are pinned on Pinterest at least 100 times each.
Step #4: Check yourself
The groundwork is done, so now it’s time for a gut check. Look at the objectives and key results you’ve come up with. Are they unrealistic? Or are they too easy? Do you have too many? Or not enough? This is your chance to make some changes before finalizing those.
Step #5: Schedule your monthly checkpoints
Like any other goal-setting method, OKRs aren’t set it and forget it. You should be meeting with your team monthly to check in on how you’re tracking toward your objective by giving each key result a predicted end-of-quarter score. OKRs are scored on a sliding scale between 0 and 1 that indicates whether you missed, came close to, or hit your target for the key result. So, for example, if you’ve only improved the user’s average time spent on a single blog post by 3%, you’d score that key result at a 0.3.
How do you stick to your OKRs?
Whew! Your OKRs are set. The hard work is over, right? Not quite. Now you and your team actually need to stick to them.
Here’s where that magic genie would really come in handy...
But just in case he’s a no-show, here are a few strategies you can use to increase buy-in and commitment to those goals:
- Involve your team in the process: If the above steps didn’t clue you in, setting your OKRs should be a collaborative process with your team. These goals shouldn’t be handed down from on high.
- Assign owners: Every key result should be assigned an owner, so that everybody knows who’s responsible for what. It adds clarity, while also boosting accountability.
- Don’t skip your check-in sessions: Things get busy, and you’d rather spend time working toward those goals than checking in on them. Resist that temptation! Those check-in sessions are important for proactively swerving around problems and monitoring your progress.
- Be patient: Your OKRs might not be perfect the first time. The good news is that you’ll set them quarterly, so you’ll refine the process before too long.
What are examples of OKRs?
Sometimes there’s nothing more inspirational than an example. You’re in luck! Below are some OKR examples that apply to four different types of teams.
OKR example for human resources teams
OBJECTIVE: Improve employee engagement levels.
KEY RESULT #1: Boost attendance at monthly company social events by 30%.
KEY RESULT #2: Increase scores on employee feedback surveys by 15%.
OKR example for sales teams
OBJECTIVE: Increase our recurring revenues.
KEY RESULT #1: Decrease our customer churn rate to less than 5%.
KEY RESULT #2: Increase upgrades from free accounts to premium accounts by 40%.
OKR example for customer support teams
OBJECTIVE: Improve customer satisfaction.
KEY RESULT #1: Reduce wait time on customer support tickets to 24 hours.
KEY RESULT #2: Improve feedback scores on our customer surveys to an average four star rating.
OKR example for product management teams
OBJECTIVE: Roll out a refreshed version of our main product.
KEY RESULT #1: Obtain 2,000 new product signups.
KEY RESULT #2: Have product reviews published on 10 major industry websites.
What makes OKRs different from other goal-setting frameworks?
We’ll admit it: we’re pretty big fans of OKRs. They’re popular because they’re effective.
But, that doesn’t mean they’re the only way to set goals. So, we’ve put together goal-setting showdown by comparing OKRs to two other common goal-setting methods: KPIs and SMART goals.
OKRs vs. KPIs
They have the catchy initialisms in common, which is why OKRs and KPIs are often confused. However, the two are actually quite different.
Key performance indicators (KPIs) require that you assign a measurable target to an existing project or process (unlike with OKRs, where setting a new objective is the first step).
KPI EXAMPLE: Imagine that you’re already working on improving the effectiveness of your customer support team and aren’t sure when you can check that goal off as “done.” You could assign a KPI of 45 resolved customer tickets per week.
OKRs vs. SMART goals
SMART stands for Specific, Measurable, Achievable, Relevant, and Time-Bound. When setting goals using this system, you should check all of these boxes to ensure that it sets you up for success.
It’s also important to note that with SMART goals all criteria are captured in a single statement. There aren’t two separate pieces like with OKRs.
SMART GOAL EXAMPLE: Resolve 45 customer support tickets per week during this month in order to improve the effectiveness of our customer support team.
Go for the goals
You want to keep your team rolling toward your goals. But so far, you haven’t found an extra generous genie or a wishing well that offers guarantees.
Fortunately, achieving your goals doesn’t need to be left to luck. OKRs are just what your team needs to set aspirational objectives and clearly define what success looks like.
More wins with less frustration. That sounds like a no-brainer to us.
Ready to get started with your own OKRs? We thought so. This template can help.
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