Objectives and Key Results (OKRs)

OKRs have been first introduced by Andy Grove during his time at Intel in the 1970s to drive performance in the company. They were inspired by Management by Objective (MbO) by Peter Drucker in the 1960s. Grove documented the approach in his book High Output Management (1983). John Doer, a famous advocate of the framework worked as a salesperson at Intel and later introduced OKRs to Google in 1999. Since then, OKRs have been utilized in a lot of startups and large tech organizations such as LinkedIn, Twitter, Uber, Microsoft and GitLab.

1. Objectives: objectives should be ambitious, inspiring, and aligned with your organization’s goals. They should be qualitative and provide a clear direction.
2. Key Results: key results are specific, time-bound, and measurable. They indicate progress towards the objective. Typically two to five key results are set for each objective.

OKRs express what an organization wants to achieve, its direction of change, followed by quantifiable metrics that help to measure if the objectives have been achieved or not.

Objective	Key Results
Qualitative	Quantitative
What do we want to achieve?	How do we measure if we achieved the objective?
Simple and easy to understand	S – specific
Ambitious / inspiring	M – measurable
Achievable in the predicted timeframe	A – achievable
	R – reasonable
	T – time bound

Why OKRs?

In his book Measure what Matters, John Doerr has identified the following superpowers of OKRs:

1. Focus and commit to priorities: organizations concentrate their efforts on the most important tasks, ensuring everyone is aware what needs to be done.
2. Align and connect for teamwork: OKRs promote transparency and communication across the organization by having shared objectives.
3. Track for accountability: OKRs provide a clear framework for tracking progress and measuring results. There is no ambiguity whether goals have been met or not.

(cf. Doerr 2017)

How to write OKRs?

The Objective (O)

The starting point are three to five objectives that are most important for the next three / six / twelve months. Objectives include not only the what but also why those goals matter.

Each objective…

1. includes the persona
2. for whom we create value,
3. is inspiring and
4. therefore, makes an impact for your organization.
5. And a good objective remains achievable in the time-frame.

Example objectives for {timeframe}:

Key Results (KR)

While objectives are the source of inspiration and direction, key results are metric-driven and include concrete numbers. They measure the achieved results towards the desired goal. Each objective should have three to five attached key results.

Key results…

• are leading indicators,
• that are continuously monitored
• to see if the objective will be achieved.
• Each Key Result addresses
• a different quality of the objective.

It it is important that we measure changes in user behavior (outcomes) that will help to reach the objective.

Key results are leading indicators

A lagging indicator helps to measure the status quo after something has been used. Example: On average we had 15 support calls per month last year.

A leading indicator is focusing on activities that result in a future change. It is about predictions and measuring change. We ask where something will lead to. Example: We learn from research that opening our newsletter increases sales.

Opening our newsletter is our leading indicator. We can test this assumption by adjusting our newsletter, offering additional vouchers or making it easier for our users to enter the voucher. With each identified opportunity we want to change the behavior of our users to open the newsletter more frequently.

Let’s say we believe that adjusting the newsletter will have the biggest change on user behavior. Therefore we run a test if this assumption is correct. We measure how many adjusted newsletters are opened and if an increased number of opened newsletters increases sales.

Depending on the maturity of the product and the knowledge we have already gathered about our users we will include additional granularity to our metrics. We might for example say, that we want to increase opening of newsletters by 3%.

Examples of key results

Types of Key Results

By innovation

When we try to find better solutions and find clues what user problems we should focus on, we speak of explorative metrics.

When we have already a digital product or service launched and we want to continuously monitor our product or service we speak of reporting metrics.

By target objective

Another way to classify key results is by looking at the target objective:

Growth and activation

Question: “How is the product / service / company growing?”

• monthly new users
• monthly active users
• (…)

Engagement

Question: “How do users engage with our product / service?”

• multiple logins per month
• messages sent per month
• likes / quotes per month
• views (example: YouTube) per month
• feedback (example: App store) per month
• (…)

Retention

Question: “Do our users come back and continue using our product / service?”

• retained user
• resurrected users
• channels how they were resurrected (Example: notification, email…
• (…)

User happiness

Question: “How satisified are users with our product / service?”

• Number of complaints in support per month
• Referals
• NPS score: how likely would they recommend the service to others?
• (…)

OKRs are a team sport

The idea behind OKR is not to define objectives top down, silo by silo. On the contrary, OKRs are shared openly across the organization and foster transparency and collaboration via shared objectives. For instance, think of one dashboard for all. Everyone can see if certain key results are met or not. Each team sets their own key results based on their capabilities to support the shared objectives. Additionally, they can add their own objectives.

OKR examples