Objectives and Key Results (OKRs) for Dummies
Following John Doerr's Measure What Matters, this is my take on OKRs.
Objectives and Key Results (OKR) is an acronym that stands for "Objectives and Key Results." It's essentially a method for communicating at a high level what you want to achieve and then breaking it down into smaller milestones that must be met in order to achieve it. In many companies, this is an excellent technique for goal setting. This was begun by the renowned Andy Grove at Intel, and then John Doerr came along and pushed it to greater heights. His book "Measure What Matters" received a lot of traction and attention, and most businesses now implement it in some way. It was dubbed "Management By Objectives" (MBOs) at the time Andy started this, or to be more specific, Intel's Management By Objectives (iMBOs).
The essence of healthy OKRs is ruthless intellectual honesty, disregard for self-interest, and deep allegiance to the team.
Now let’s try to understand more about OKR by looking into the "Objectives" and the "Key Results".
What are Objectives?
Objectives in general are the high level goals that we set. Objectives are the "Whats". This might be very vague in itself when we start the planning discussions.
The Objectives express the high level goals and intents and might seem aggressive yet realistic. They should be tangible, objective, and unambiguous. For anybody observing from outside, it should be clear as to whether this objective has been achieved at the end of the period. The successful achievement of an objective must provide clear value.
It’s good to have a few well-chosen objectives at each level, at the business functions level, at the unit level, at the team level, etc. Despite the fact that this is at a high level, objectives send a clear message about what we say yes to and what we say no to and what is expected of you. It clearly states the focus area. The typical number of objectives varies from 3-5 per cycle (monthly, quarterly, half-yearly, and annually).
What are Key Results?
The Key Results are the "Hows". They:
- If achieved, these measurable milestones will advance objectives in a useful manner to their constituents.
- Must describe outcomes, not activities. If your KRs include words like "consult", "help", "analyze", or "participate" they describe activities. Instead, describe the end-user impact of these activities. Rather than "assess latency", write "publish average latency numbers"
- Must include evidence of completion. This evidence must be available, credible, and easily discoverable. Examples of evidence include change lists, links to docs, notes, and published metrics reports.
Guidelines on Writing OKRs
Writing good OKRs isn’t easy, but it's not impossible. OKRs communicate a clear message about what we say YES to and what we say NO to. Well chosen objectives provide clarity and focus. It’s good to have 3-5 objectives per cycle with five or fewer key results tied to each objective. But this number varies depending on the style and takes a few cycles to take a steady state form.
The goal setting is usually split between top-down and bottom-up approaches. Individuals and teams set half of their OKRs with the help of their managers. The rest of the OKRs can be derived from the top-down approach. The ideal split is 50-50, but can vary from quarter to quarter, team to team, business to business, etc.
With OKRs we are trying to achieve a collective agreement and alignment on what we are going to do. OKRs are social contracts that define the set of priorities and a way to measure their progress.
OKRs are not set in stone. If an objective no longer makes sense midway through the cycle, it can be modified or even discarded. It is adaptable to change. If the goals and priorities were changed constantly, the environment might be deemed very stressful and unhealthy. Depending on how well our planning stage is executed, this rate of change on OKRs can be reduced a lot, but it can’t be avoided completely. At times, the right set of key results might come into the picture after a few weeks or months, once a goal has been put into play.
While the committed or operational OKRs need to be met in full, the aspirational OKRs are usually attempted but not attained in full. Committed OKRs are those that we agree will be achieved 100%. We are willing to adjust schedules and resources to ensure that they are delivered. If it’s missed, it shows an error in planning or execution. Aspirational OKRs express what we’d like the world to look like, even though we have no clear idea how to get there and/or the resources necessary to deliver the OKR. It’s good to aim for a 50% to 70% achievement rate with some variance.
Here are some of the mistakes that people generally make while writing OKRs:
- Failing to differentiate between committed and aspirational OKRs.
- Business-as-usual OKRs. (No change from what they do, not accommodate business or customer needs)
- Timid aspirational OKRs.
- Sandbagging (resources are free most of the time)
- Low value objectives
- Insufficient KRs for committed Os.
Typical OKR Cycle
Every organisation will take 4-5 cycles or even more to fully embrace this system and build a mature goal muscle.
- 4-6 weeks before quarter
- Brainstorm Annual and Q1 OKRs for Company
- 2 weeks before quarter
- Communicate Company side OKRs for Upcoming Year and Q1
- Start of the quarter
- Communicate Team Q1 OKRs
- 1 week after start of quarter
- Share Employee Q1 OKRs
- Throughout the quarter
- Employees track progress and check-in
- Near end of quarter
- Employees reflect and score Q1 OKRs
In short, OKRs helps to focus and commit to priorities, track for accountability and align for teamwork.