The ultimate guide to defining, writing, and implementing OKRs

How to Use Objectives & Key Results for Planning (and Achieving) Your Company Goals How did Google grow from 40 to 88,000 employees and $100+ billion in global revenue? Sure, their killer products, ubiquitous search engine, and cloud services played a huge role. But they also had a not-so-secret, secret weapon at their disposal: OKRs. First developed by legendary Intel CEO Andy Grove, Objectives and Key Results (OKRs) is a collaborative goal-setting system that was adopted by Google in 1999. Since then, OKRs have helped Google (and countless other companies) not just build products rapidly, but also stay focused, engaged, and aligned with their . company goals OKRs translate your company strategy into a digestible way that allows every team member to know they’re working on the right thing. Even better, OKRs are dead simple. At least in theory. In practice, there are a few best practices and pitfalls you need to watch out for if you want to get the most out of bringing OKRs to your business. So, if you’re tired of hitting the finish line only to realize you were working toward the wrong goals, sick of feeling like the work you do each day isn’t moving the needle, and want to get your team more aligned with company goals and strategy, OKRs are for you. In this guide, we’re going to run you through everything you need to know about OKRs. From what exactly they are, to clear examples, tips for writing them, and how to implement them at your company. Sound good? Let’s get started. A version of this post first appeared on the Planio Blog. Planio is a powerful project management tool that keeps your team on track. Sign up for a free 30-day trial here . What are OKRs? Like their name implies, OKRs are made up of two distinct parts: What you want to accomplish Objectives: How you’re going to measure the success of your work Key Results: Sounds simple, right? On their own, an Objective and Key Results are easy concepts to understand. But it’s when you bring them together that magic happens. To clarify what we’re talking about, let’s tell a little story: Way back in the early days of Google, venture capitalist John Doerr paid a visit to the company’s Mountain View HQ to talk about their future. Doerr had previously worked under Andy Grove at Intel (the creator of OKRs) and had joined just as Intel was transitioning from a memory company to a microprocessor company. A pivot is no small feat for any company. But one the size of Intel? To keep all of their teams in line as they went through these changes, Grove came up with the idea of OKRs, which he described through a simple formula: I will _________ as measured by _________. That formula was what kept Intel in check as they successfully changed their business model. And it was what Doerr wanted to show the founding team at Google. If you think about it, a proper goal isn’t just a statement of what you want to achieve, but a road map of how you’re going to get there. The “as measured by” in Grove’s formula is what makes a goal a goal (otherwise you just have an aspiration). This formula is the best way to describe what an OKR really is: I will (Objective) as measured by (Key Results). In this context, we can expand the definitions of each part of the OKR to something like: Memorable, qualitative descriptions of what you want to accomplish in a given time-frame (such as quarterly). Objectives should be ambitious and feel somewhat uncomfortable. They should also be short, inspirational, and public so everyone knows what everyone else is working on. Objectives: A set of 2–5 metrics that measure your progress towards the Objective. They should describe an outcome, not an activity (i.e. they shouldn’t include words like “help”, “consult”, or “analyze”). Once they are all completed, the objective is necessarily achieved. Key Results: The power of OKRs, as Doerr describes, is in having a “North Star” every quarter by which you can set your priorities. As well as being able to see how it fits in with everyone else’s goals and priorities: “It was incredibly powerful for me to see Andy’s OKRs, my manager’s OKRs, and the OKRs for my peers. I was quickly able to tie my work directly to the company’s goals. I kept my OKRs pinned up in my office and I wrote new OKRs every quarter, and the system has stayed with me ever since.” Instead of simply being another task on your list, an OKR is an ambitious goal that’s supported by concrete actions that you need to take to hit. As Google explains on their , Key Results should be and easy to grade with a number (they use a scale of 0–1) with the “Sweet spot” for OKR success being somewhere around 60–70%. re:Work blog numerically based If someone consistently fully attains their objectives, their OKRs aren’t ambitious enough and they need to think bigger. When used this way, OKRs enable teams to focus on the big ideas and accomplish more than they thought was possible. All without the usual fear of the repercussions of “missing” a goal. It might seem strange to purposefully set goals you don’t think you’ll hit. But when aiming high, even failed goals result in substantial progress. This is where the nuances and skills behind writing a good OKR becomes apparent. What is an example of a good OKR? So what does this all look like in practice? Let’s run through an OKR example to solidify our understanding of their fundamentals before moving on. Let’s say your business, like many others, relies on giving a better customer experience than your competitors. So, your quarterly objective might be something along the lines of “create an awesome customer experience”. But how do you know if you’re succeeding in doing this? You need some form of measurement to make this an OKR you can actually work towards. But what shows you’re creating an “awesome” customer experience? For one, you could look at your NPS, or Net Promoter Score (a tool that can measure what people think of your brand) as well as your customer churn rate (how many customers you’re losing a month). A great experience would mean people both say nice things about you and stick around. Sounds good? But it’s not the full story. Before we get going, let’s think about these Key Results for a second. By saying we want to improve our NPS score lower churn, it sounds like we’re willing to do whatever it takes to make our customers happy. But to run a sustainable business, we need to keep costs under control. Which is why we should add a third Key Result around cost as a countermeasure. and So, that OKR would look like: Create an awesome customer experience Objective: Key Results: Improve Net Promoter Score from X to Y Reduce Monthly Churn Rate to X% Maintain Customer Acquisition Cost of under $X Now we have an ambitious objective aligned with our company’s strategic goals and a small number of measurable key results that will tell us if we’re doing the right things to get there. At the end of the work period (typically a quarter), your OKRs provide a reference of how well you did, where you succeeded, and where you need to focus more attention in the future. Real life example: Uber’s OKRs Here’s another OKR example , where he explains how Uber might use OKRs to work towards their ultimate company goal of being the most readily available ride-sharing service in the world: shared by former Google employee Niket Desai Increase Drivers in the Uber System Objective 1: Key Results: Increase driver base in each region by 20% Increase driver average session to 26 hours/weekly in all active regions Increase geographical coverage of drivers Objective 2: Key Results: Increase coverage in San Francisco to 100% Increase coverage for all active cities to 75% Decrease pickup time to <10min in any coverage area during peak hours Solving how to meet these OKRs is up to the team. But as Desai shows in this example, a good OKR helps align them with company strategy gives them a pretty clear roadmap of how to get there. and Best practices for writing good OKRs The above examples should give you a good idea of how to write good OKRs. But if you’re still unsure when you try to use them in your own business, here’s a few questions you can run through: Once the organization knows what it’s focused on and how it will measure success, it’s easier for individual team members to connect their projects with the company objectives. Does the OKR align with my company’s main business strategy and goals? Once everyone agrees what the most important objectives are, it can be easier to say no to the less important ideas. With OKRs, saying no isn’t a political or emotional debate. It becomes a rational response to a commitment that the entire organization has already made. Is the objective supported by everyone at the company? OKRs are ambitious because they want to leave room for experimentation and growth. If you’re too committed to a single path to success, you might be limiting your team’s creativity and missing out on big opportunities. Remember to make sure your Key Results are adaptable and agile enough that they can be completed in many ways. Is the OKR adaptable and agile? OKRs can be incredibly motivating. As long as they have a strict time frame. Set a strong deadline and then check in weekly, monthly, or quarterly on progress (whatever works for your team and your communication style.) Does it have a clear deadline? Can you put a numerical value on the result you want to see? If not, you don’t have a good Key Result. Are your Key Results measurable and progress-based? Does your OKR get your team excited? Can you set them off towards a moonshot idea where even moving the needle a bit can be seen as success? With OKRs, the goal isn’t to always hit 100%. Make sure you’re pushing your team while staying within the bounds of what’s realistic. Is it aspirational? If your OKRs aren’t ticking all of those boxes, you might want to spend some more time with them before hitting “go”. It’s always worth it to spend more time upfront devising the best possible OKRs than to send people down the wrong path. OKRs are a powerful tool. But they’re not a silver bullet for goal setting. Every methodology has its upsides and downsides and OKRs are no different. What makes OKRs different is that they’re not simply just a way to set goals. OKRs communicate strategy and priorities from the highest level right down to each individual team member. They allow team leaders to push groups in the right direction while giving them constraints to make sure work gets done. They’re fantastic tools not just for moving the needle, but for focus, prioritization, and clear communication (some of the biggest issues facing most businesses today!) On top of that, OKRs are special in a number of other ways: OKRs are pretty simple to understand and make day-to-day tasks easier as everyone knows what they’re working towards. They help you reduce the time spent setting goals so you can work more on achieving them (not analyzing them). They’re simple: By working in short cycles and with clear goals, OKRs let you measure the work you’re doing, see how it’s stacking up against company-wide goals, and adjust your approach on a regular basis. They’re agile: As we just said, OKRs are a form of communication. At Google, all OKRs are public from the CEO down, which means at any time you can see how the people that work around you are helping the company’s cause. They bring a level of transparency: Studies have shown that feeling a connection and purpose in the work you do makes us happier, more productive, and more motivated to work. By showing your team how the work they do is tied into the company’s goals you’re helping give them the purpose they need to push forward. They help workers find meaning and purpose: Rather than having a lofty company mission with no way to know if you’re getting there. OKRs let you choose tactical objectives that work towards your overall goal. They’re the link between strategy and tactics: However, there are also a few potential downsides you should understand before adopting OKRs: As Andy Grove wrote in “The absolute truth is that if you don’t know what you want, you won’t get it.” OKRs help you move forward quickly and if you’re not pointing people in the right direction, or your teams aren’t aligned, they can do harm rather than good. You need to know where your company is headed: High Output Management: Just because OKRs be simple, doesn’t mean they’re easy. Team leaders and founders are busy. You’re hiring, strategizing, and putting out fires. But the success of OKRs depends on putting in the proper time to plan and strategize what they should be. You need to commit the time to planning proper OKRs: can Again, that “M” word comes up. If you don’t know what success looks like and the right metrics to tell you if you’re reaching it, there’s no point in trying to use OKRs. You need a good understanding of how success IS measured: What it all comes down to is that OKRs work well when you have a clear strategy and know where your company is headed. Like any , the more you know about the final destination, the better chance you’ll actually get there. goal-setting exercise How to adopt OKRs for your company Bringing OKRs to your company isn’t just a matter of copying the way a company like Google uses them. Google isn’t the average company, and they’ve spent almost 2 decades growing, scaling, and experimenting with how their internal goal-setting structure works. Because of that, how they use OKRs will be incredibly different than how you will. That’s because at its core, OKR isn’t a methodology. There’s no set path or steps you take for bringing it into your workplace. Instead, it’s a set of practices and ideals that you should understand and customize for your teams. If you want to start experimenting with OKRs, however, there are a few best practices you should follow: Start small and iterate According to OKR coach , it’s important to understand the tradeoffs you’re making when you adopt OKR. Which means it’s probably a good idea to start small and iterate as you understand how it works in your company. Felipe Castro In to introducing OKRs, they suggest starting with the basics: Google’s own guide Explain the basics of OKRs to your team and how they work. What are OKRs? Review your current approach to goal-setting and any limits or issues you’ve had with that approach. This is a good time to highlight how OKRs connect everyone’s work to the company’s purpose and mission. Why use OKRs? Explain the timeline of your OKR cycle (it’s good to start with shorter ones. Around 30–45 days.) What is expected of each person. What the major milestones will be. And what success looks like. Remember, you’re not shooting for 100% every single time. And it might take some time to get your team to accept that 60–70% is totally fine. How do OKRs work? Focus on communication and prioritization One of the most important aspects of OKRs is that they’re public. Which isn’t always an easy thing for teams to do. However, making it clear where you can see what other people are working on and what metrics they’re chasing is an important part of adopting OKRs. Get Everyone on the Same Page. With Planio . As former Googler and former Twitter CEO : Dick Costolo explains “As you grow a company, the single hardest thing to scale is communication. It’s remarkably difficult. OKRs are a great way to make sure everyone understands how you’re going to measure success and strategy.” Use regular check-ins to stay disciplined Because of the nature of OKRs, it’s important to set and stick to regular check-ins. And that doesn’t just mean at the start and end of an OKR cycle. You might want to set a cadence that includes: Agile Bring together a small group of people that work together to plan and talk through objectives and key results for the next cycle. OKR planning sessions: A team-level focused on tactical updates to ensure everyone is working on the right priorities and isn’t being blocked. Weekly check-ins: meeting A quick step back to reassess the OKR, add or eliminate Key Results or adjust targets, and define action plans for addressing OKRs that are below your goal. Mid-quarter/cycle review: A company wide meeting where you can communicate and reiterate your strategy and goals to make sure everyone’s still aligned and excited. All-hands meetings: Learn how to run meetings that won’t suck the life out of your team with our free Guide to Running Fast and Efficient Meetings . Don’t go all in on OKRs until your whole company is ready Change is hard. And it’s probably not a good idea to just drop OKRs on your entire team. Instead, choose to either integrate them horizontally or vertically: Start with one team and add additional ones each cycle or quarter. Horizontal: Start with company OKRs and senior management and then add new layers beneath each cycle or quarter. Vertical: The most common mistakes teams make with OKRs How your company handles OKR will be unique to you. And the more you add them and work with them, the better you’ll be at aligning your teams and measuring results. However, early on in your path to adopting OKRs there are some common pitfalls you should watch out for: Miscommunicating “Stretch Goals” At Google, OKRs are used to go after stretch goals. Or, goals they don’t necessarily think they can hit. And while this is a fantastic way to to look for unique and innovative solutions, if not communicated properly it can cause some serious headaches. motivate your team Once OKRs have been adopted across multiple teams, you’ll need to be very aware of the other team’s goal-setting philosophy. If part of your project depends on another team’s Objectives, make sure you know whether they’re most likely to deliver you something at 95% or 65% of their stated OKR. “Business-as-usual” OKRs If your current goal-setting philosophy is to be conservative with what you’re going after, this isn’t going to jive with OKRs. To test this, look at your team’s current work as well as requested projects and rank them in terms of value versus effort required. If the OKRs you’ve chosen have anything other than top effort tasks you should drop them and re-assign the resources. Of course, there are some Objectives that will stay the same each cycle (especially around maintenance or upkeep). This is ok as long as the Objective is high priority . But always try to make sure your Key Results push the team to evolve and look for new ways to be more efficient. and brings in business value “Sandbagging” If a team is consistently hitting their OKRs without using all their bandwidth, they may be hoarding resources or not pushing their team (or both). This can kill the morale of other teams who are going after stretch goals. Make sure you have a consistent, company wide philosophy around how difficult Objectives should be and what success looks like. Not enough Key Results for an Objective (i.e. a lack of clarity) We can’t say enough how the OKR secret sauce comes down to measurement. And if the Key Results for an Objective don’t represent everything that’s needed to fully achieve it, you’re not setting your team up for success. Take the time during the planning phase to determine exactly what that objective needs to be successful. The way you set goals says a lot about your company. Are you concerned with just getting through the day? Or are you looking 10 years down the road? With OKRs you can do both. OKRs not only help you communicate the big vision stuff that builds behemoths like Google and Twitter. They also make sure every person doing their daily work and putting out fires is in alignment. But they take work. As John Doerr wrote in : Wired “OKRs are not a silver bullet. They cannot substitute for sound judgment, strong leadership, or a creative workplace culture. But if those fundamentals are in place, OKRs can guide you to the mountaintop.” It doesn’t matter how quickly your company grows if it’s going in the wrong direction. But if you do the work upfront to dial in your strategy and vision, OKRs can be the superfuel you need to blow past your goals. Hey, I’m Jory! I help companies and interesting people tell their stories through smart and focused writing. Want to work together? Email me at hello@jorymackay.com A version of this post was originally published on the Planio blog . Check it out for more essays and actionable tips on project management, building a remote team, and thriving as a startup.