Objectives and Key Results (OKRs)

Objectives and Key Results (OKRs) as a mechanism have been around since the concept of Management by Objective by Peter Drucker in 1954, and popularised by John Doerr in an OKR form in his book Measure What Matters, OKRs which describes how OKRs were implemented in Intel and at Google among many case studies.

OKRs are cited as providing 10x growth and help to provide alignment to aspirational goals, which should improve teams' focus and help to clarify decision making especially if there is a tendency for teams to get sidetracked or distracted with other work.

OKRs also help teams question what is really valuable and what does the world really want, rather than delivering a random collection of features that may only moderately resonate with customers and end users.

Objectives

Objectives are intended to be short, valuable to a customer or end user, and to the point with a recommended 3-5 objectives as an OKR.

There tend to be two forms of an objective:

• committed objectives - which are intended as firm deliverables and help to provide a clear and concise North Star direction for teams
• aspirational objectives - objectives that are intended as stretch goals or Big Hairy Audacious Goals that are intended to inspire teams to achieve beyond the normal expectation. It is common to expect only 60-70% completion of these goals, but help to foster big thinking in the teams rather than only considering the norms

Cadence

Popular cadences for OKRs are quarterly, and can be monthly for organisations that are quite mature in their agility and have a flexible approach to their working practices

Key Results

Key Results are intended as quantity or quality measures to help track progress towards the Objectives, and are intended to be measurable and quite specific to be useful.

Good key results can be easily measured and are valuable metrics rather than vanity metrics.

Scoring

A popular scoring approach uses a range from 0.0 to 1.0 to indicate the progress which are updated regularly by teams. The following ranges are used with a corresponding red, yellow, green indication:

• 0.0 to 0.3 - red
• 0.4 to 0.6 - yellow
• 0.7 to 1.0 - green

Creating OKRs

Teams are expected to create their OKRs and should be gained by agreement and consensus in the group for the teams to value them and maintain them.

For larger organisations, it may be useful to create tiered OKRs at various levels such as at an organisation level, a program level and team level for example. Here a bottom up approach is recommended, although it may also be useful to do all levels at once and fine tune with feedback from the other levels and teams.

Self Assessment

Key Results are intended to be measured through out the cadence by the teams and at the end of the cycle teams are expected to reflect on the performance towards the Objectives providing information on why committed objectives were not able to be met and how things can be improved going forwards.

Notes from these reflective conversations may be kept with the OKRs for future reflection and process improvement.

Common Pitfalls

Common traps with using OKRs include:

• failing to differentiate between committed vs aspirational OKRs - committed objectives are intended to be delivered and within the teams' capabilities, but if these are too complex or too large to achieve, then are they really aspirational goals and so should be treated as such. Teams that consistently fail to achieve committed objectives may well suffer from a loss in confidence and a further degradation in performance
• business as usual OKRs - if there is no specific intent behind an objective other than just doing what we normally do, then there will be no performance improvement, and subsequently the OKRs will cease to be useful or valuable to the teams
• insufficient KRs for Os - Key Results are needed to help track progress and also inform our understanding of the journey towards the Objectives. A reasonable number of Key Results should help provide a more rounded perspective on the progress towards the Objectives
• timid aspirational OKRs - not going far enough for the aspirational OKRs will not help the teams to realise big thinking and instead may well encourage them to remain with the status quo

See Also

• Measure What Matters, OKRs: The Simple Idea That Drives 10x Growth, John Doerr, 2018