Ultimate Guide to Objective and Key results. OKR Meaning and OKR examples.

OKR Definition

As a whole, OKRs are meaningfully framed Objectives and Key Results which are designed and tracked to improve business performance. The definition of OKR is to set objectives for the future and measure those objectives with Key Results.

The OKR acronym stands for Objectives and Key Results. Objectives can be the broad goals of a company, department or a person. Key Results is the success measurement of that objective.

OKR Framework

The OKR (Objectives and Key Results) framework is a goal-setting methodology that promotes alignment and progress tracking.

It comprises three key components

• Objectives set qualitative, inspiring goals that guide efforts.
• Key Results quantify progress, providing measurable outcomes to gauge success.
• Initiatives outline actionable steps and projects to achieve the Objectives and Key Results.

The OKR framework fosters an agile and adaptable approach, enabling organizations to cascade goals from top-level to individual objectives. Regular check-ins and transparency ensure accountability and continuous improvement. By implementing the OKR framework, organizations cultivate focus, collaboration, and measurable outcomes for success.

A brief history of OKRs.

Where do OKRs come from?

Andy Grove, the legendary CEO of Intel, is credited with introducing the concept of OKRs in the 1970s.

Intel encountered several large competitors like Motorola as they pivoted from being a memory vendor to a microprocessor vendor. The company had to battle against larger rivals in a highly competitive market.

Objectives and key results provided an excellent framework for Andy Grove to communicate his goals to the teams across the world. Teams agreed on stretch targets and executed them with great focus and alignment. Andy Grove reviewed progress every week, and early feedback helped teams on quick course corrections. The results were spectacular.

Intel beat every other competitor to become the world’s leading CPU vendor and, along with Microsoft, has been dominating the IT industry through the Wintel duopoly. John Doerr worked directly with Andy Grove at Intel and became a great believer in OKRs. He moved on from Intel and became a prominent Venture Capitalist with his investments and mentorship to companies like Google, Intuit, Amazon, Square, Uber, and Zynga.

In 1999 he introduced OKRs to Google when they were just 60 employees. Google has publicly credited OKRs for their phenomenal success. From Google, OKRs spread like wildfire across companies in Silicon Valley and beyond.

Companies that use OKRs

Today we see OKRs being adopted in companies across other verticals such as Banking, Media, Telecom, Insurance, and even the Public Sector.

Interest in OKRs has been surging in the 2010s

As you can see from the Google Trends curve depicted below — the interest in OKRS has been steadily increasing from 2012, and it surged after 2018 when John Doerr published his best-seller “Measure What Matters.” The book helped make OKRs go mainstream, and its popularity has steadily grown outside the tech industry.

Google Trends – OKRs (In US)

Marc Andreesen declared that software is eating the world, in his landmark 2011 Editorial in the Wall Street Journal. He describes that “Silicon Valley-style technology companies” will be taking over large swathes of the economy. He was citing companies like Apple, Amazon, Netflix, and LinkedIn completely disrupting large industries like Entertainment, Communication, Advertising, and Recruiting.

In May 2023 (at the time of this writing), the takeover of the “large swathes of the economy“ by Tech companies was realized.

The top 4 companies here and almost all the companies referred to by Marc Andreessen have one thing in common: they have been operating with OKRs as their goal management system.

In addition to this, we see several other tech companies like Linkedin, Zynga, Spotify, and Netflix that also dominate their industry using objectives and key results.

As Steve Jobs said about the success of Apple products, the reason OKRs have been gaining widespread adoption compared to the hundreds of other competing Management Theories is simply because “it works.”

What is the best way to manage OKRs? Using an agile and intuitive software that can teach you: what are OKRs, how you can implement OKRs, and how you can continually improve. Profit.co is a versatile OKR management software that can be tailored to the exact needs of your business– you can
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OKRs Comparison with other Goal Management Systems

OKR vs BHAG (Big Hairy Audacious Goal)

OKR vs WIG (Wildly Important Goals)

Why are OKRs important for business?

Watch the latest podcast of our CEO, Bastin Gerald, a thought leader in the #OKR space, engaging in an enlightening discussion on OKRs.

Set goals with OKRs:

Companies run OKR programs as a workforce plan that helps them set goals and then align, prioritize, concentrate, and gauge the results of the work they perform to achieve those goals.

Implement your strategy with OKRs:

Companies make use of OKR programs to communicate the strategy in the most effective way possible. In addition, Companies make use of OKR programs to shift from the output based work culture to outcome-based work culture. A well implemented OKRs provide a transparent and objective performance appraisal mechanism enabling higher performance.

The 5 Key benefits of OKRs

According to John Doerr (the celebrated Venture Capitalist who popularized the OKR framework), there are 5 Key benefits of OKRs.

1. Focus: OKRs create focus on what matters.

Companies should define no more than 3-5 OKRs per team, department, or level, and less than 5 Key Results per Objective.

2. Alignment: OKRs align teams to a common goal

Research indicates that over 85% of corporate employees are unaware of organizational strategy and goals. OKRs solve this problem by ensuring that the Corporate goals (OKRs) are cascaded to department and team goals through top-down assignment or bottom-up alignment.

OKR Alignment gives clarity to employees about how their work contributes to the corporate goals and results in the entire organization executing in unison.

3. Commitment: OKRs engage and motivate employees

Commitments are OKRs that should be achieved without fail in the chosen time period.
(Example: 100% of employees to be given bias awareness training this quarter).

4. Tracking: OKRs enable measurement and tracking of key results

OKRs should be tracked every week. The metrics for the various Key Results are established at the beginning of the quarter and will be used for monitoring and tracking.

Teams will track their OKRs transparently using tools like Profit.co. It keeps everyone aware of the scoreboard and facilitates members helping those who need assistance in completing their commitments by sharing resources and expertise as required.

5. Stretching: OKRs drive and build a high-performance culture

OKRs should help the team elevate their performance beyond what they thought “was possible.” So the goals are ambitious, and a 70% achievement is considered “strong performance.”

An excellent way to encourage “Stretch Goals” within OKRs is to unlink the achievement of “stretch goals” from “compensation discussions” and instead make compensation decisions based on the effort put toward achieving OKRs.

OKR Levels

Aligning teams by setting OKRs based on organization structure.

In order to properly align OKRs in your organization and communicate your corporate strategy to each and every team member, you can set OKRs at different levels. Generally, there are four levels in each organization: the company level, the department level, the team level, and the individual level.

OKRs work at all levels of a business. At top level company-wide OKRs, department OKRs, and individual employee OKRs. The company-wide OKRs will become input for the team OKRs, which then will drive individual OKRs.

Some organizations choose to only use one or two OKR levels, while more complex enterprises might have to use all four in order to stay organized.

Company Wide OKRs:

OKRs at each level of the organization will look unique from one another. For example, an OKR at the corporate level will speak to high-level goals such as:

Objective: Become a market-leading business

Key Result 1: Grow our revenue

Key Result 2: Delight our customers with our support

Key Result 3: Launch our software 2.0 to improve UX and versatility

Key Result 4: Build a high-quality inbound lead pipeline

Team/Department OKRs: These high-level goals can then be broken down and assigned to departments. For example, the fourth key result to build a solid lead generation engine might then appear as a department-level objective for the marketing department:

Objective: Build a high-quality inbound lead pipeline

Key Result 1: Acquire at least 500 leads per week

Key Result 2: Maintain lead quality above 50%

Key Result 3: Produce and rollout amazing content

Key Result 4: Increase # of sessions per week to 2500

Key Result 5: Increase CTR for email to 15%

Furthermore, the third key result for this marketing key result could be cascaded as an objective for the Content team, a subsection of the marketing department. This way, OKRs cascade through an organization from one level to another, driving the entire company forward with singular focus and proper alignment.

How to write great OKRs

So, when you write OKRs it is important to know that the goals that are set will be visible at a single place and can be accessed by teams with permission, hence you are held accountable for the OKR.

As a beginner, you may struggle to pen down your thoughts as clearly defined objectives and Key Results. In order to hone your writing skills on OKRs, you can check out our OKR eBooks available for free download. This will help you and your team start strong with OKRs so you can see better results, faster. But there is also an easier way to learn about OKRs– instead of reading, you can try your hand at writing OKRs yourself with the best in class OKR software or OKR tool which would guide you to frame brilliant OKRs with its automated goal-writing features.

Here are some useful tips: Before you start creating an OKR, first break down your OKRs into smaller tasks that can be attained with measurable portions. Limit your KRs to two sentences. If you’re having trouble keeping the text concise and/or simple, consult with writing tools like BestEssaysEducation, Grammarly, and Supreme Dissertations. They help with writing easy-to-understand and impactful goal statements and other OKR-related documentation to share with employees.
Orient your teams to set up weekly and monthly goals and track their progress for inevitable success. Unexpected things can happen at unexpected times, remember various undefeated companies have also been a beginner at some point in time, so being a beginner doesn’t mean that you are lagging behind. A great start with a great platform can always make you a whiz.

Tips to write Good OKRs

Objectives: OKR Objectives should be motivating, short, memorable statements. Every team member should be able to recall their Objectives from memory without referring to their app or system.

Objectives need to be energizing, not dull. Feel free to use whatever works in your organization and is in sync with your culture. We have seen words like “out of this world,” “kickass,” “wicked,” “groovy,” “sweet,” “fab,” and “super-duper” used to describe Objectives.

Here are a few OKRs set by some companies that we all know:

• YouTube — “Reach 1 billion hours of watch time per day (by 2016)“
• Google — “We should make the web as fast as flipping through a magazine.”
• MyFitnessPal — “Help more people around the world.”
• The Gates Foundation — “Global eradication of Malaria by 2040“.

Key Result writing tips:

• You should have less than 5 key results for every objective.
• Key Results are metrics that need to be achieved and hence need to have numbers or be quantifiable.
• Key Results are ‘Results” not “tasks.”

Here are a few examples of Key Results that a few companies have used for their Objectives:

• YouTube — “Grow kids’ engagement and gaming watch time (X watch hours per day)“
• Google — “Achieve 20 million weekly active users for Google Chrome by year-end.”
• MyFitnessPal — “Add 27 million new users in 2014“.
• The Gates Foundation — “Sustain current global progress to ensure the environment is conducive to eradication push“.
  

OKR examples by organizational function

Here are some practical real world examples based on the team function or the department.

Customer Success OKR example:

Building an effective, well defined OKR will not only help you stay focused on your target but also provides you the platform to delight your customers.

HR OKRs example:

Compensation and Benefits Team OKRs

Finance OKR Example:

OKR example to improve their organization’s debt status.

Engineering OKRs Example:

OKR example for improving the stability of product releases.

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