Almost all managers have some sort of goal-setting routine for their team; it’s a natural part of being a leader and delegator. Most of these leaders, however, think giving their team a goal every week is the best and most efficient way to do that. It’s not. Just like most aspects of good management, great goal-setting is easy to learn, but hard to master.
You can master it with OKRs.
What are OKRs?
The OKR (Objectives-Key Results) Method is a goal setting framework engineered by former CEO of Intel Andy Grove that can not only clarify the mission statement of your business, but can in and of itself help your team reach it. Incredibly successful corporations like Walmart, Microsoft and Netflix owe some of their prosperity – and their employee retention numbers – to their dedication to OKRs.
On the surface, the OKR method is straightforward. You come up with an overall company Objective, which is the target that you want your company to reach within a particular (quarter to year) period of time. You then name three to five shorter term Key Results, which are plans that, in their completion, serve to attain the Objective.
From the company OKRs, teams and individuals can create their own OKRs so all goals – and consequently, all work – is aligned with the overall company mission. It’s one of our favorites because it gives everyone a strategic set of assignments that keeps them focused on the final objective; too often do workplaces fail to reach their final objective because it doesn’t come with quantifiable steps to get there.
Now, the biggest difference between a set of OKRs and an everyday list of goals is their measurability. Each of the Key Results, whether through numbers or steps, should be able to be tracked and measured. A Key Result that wouldn’t belong on the list above would be something like, “More thoroughly address employee complaints submitted to HR,” because it’s difficult to tell if and when this can be considered finished.
How do you write an OKR?
Here’s an example of a typical OKR list from a marketing business:
Objective – Increase market awareness, market share and leverage globally
Key Results – Develop a comprehensive go-to-market plan
Enroll 100 new customers
Structure 5 strategic revenue-generating partnerships
Execute a global user conference
Once this team has executed their four Key Results, their Objective will be complete.
As the business leader, don’t be afraid to make your Objective a bit more aspirational — your mission may be further “out there” than some people think is possible, but the further your team reaches, the more they’ll accomplish.
Remember to check in with your staff and their direct reports about how they are doing with their goals and Key Results of the quarter when you can. Keep progress transparent by keeping the whole team updated on how far along the Key Results are and what should be done to keep up the momentum.
OKR Mistakes
OKRs can be tricky to nail down precisely – when starting out, you’ll often make slight mistakes you don’t even realize you’re making. Now that we know what to do, let’s take a look at what not to do so you can avoid committing OKR sins.
1. Missing out on the bigger picture
The Objective you come up with should represent a goal of the entire company at large, as opposed to a side project or obscure idea. Your Key Results, correspondingly, should represent the purpose of the Objective.
When your team is dedicated to working towards Key Results that complete an Objective, which in turn furthers the ultimate goal of the company, it aligns your workforce directly with the big picture and extracts efficient results. Per Harvard Business Review, companies with employees who identify as being aligned with the business’ goals are more than twice as likely to be top performers.
For instance, a toy company’s big picture objective could be, “Sell our products in every department store chain by 2022.” We would figure this is in concordance with their main aim as a business.
If your Objective is instead something that pertains specifically to a smaller team goal, it misdirects efforts and can stunt the progress your staff is making toward organizational progress. The same company’s big picture goal shouldn’t be, “Develop a cool new commercial by Q3,” if advertising isn’t the company’s purpose. Make sure your objectives aim forwards and upwards.
2. Turning your Key Results into a task list
It’s true that your Key Results should be actionable, measurable goals that can be checked off once complete. However, despite the way they sound, they do hold a distinction from small tasks.
A good Key Result is something that takes time, often involves teamwork, and makes noticeable progress towards your Objective. As you plan, though, you may find yourself accidentally assigning tasks through your KR list.
Your Objective could be to pick up 10 new clients this month, but your Key Results shouldn’t be lines like, “1. Give Epsilon Industries a call, 2. Upsell Proaxis on our premium plan, 3. Let Pam know she’s working this Saturday.”
Key Results can’t be done in an afternoon; your key results should include goals your team develops a plan for – and takes action on – to help reach your final Objective.
3. Having too many Objectives or Key Results
Just like Key Results shouldn’t be confused with small tasks, Objectives shouldn’t be confused with Key Results.
You don’t want to overdo the OKR strategy by running too many Objectives for your team to handle. It may be tempting to quickly achieve a goal by labeling something like, “Upgrade the camera on our flagship smartphone” as an Objective, but that’s more of a Key Result that would further an Objective such as, “Debut a smartphone that leads the tech industry in its specs.”
An Objective should take time, be large in scope, and further a broader Big Picture for your company. As a suggestion, one Objective per quarter is a solid pace to track OKRs with.
Adding too many Key Results under your Objective can also hold back your team’s potential. Having 6+ KRs running at the same time can divide attention, confuse your staff on their priorities, and hurt employee retention numbers. Now, if you feel that you do need 6-8 KRs to complete your objective, make sure to only introduce them in a rolling format.
Debut the three or four you would like your team to complete first, and as they check them off, replace each completed KR with a new one that should be done next. Priorities will be clear, and your workforce will reach the Objective in no time.
4. Leaving your OKRs behind
This is a simple one — don’t forget to remind your team of the quarter’s OKR list. Whether you have it displayed in the office, you remind them in weekly meetings, or you follow up with your employees individually, working on Key Results should be a top priority for your team.
Your staff could get sidetracked on their own projects if you don’t check in on their progress or emphasize the importance of aiming towards the Objective. If the time comes for the Objective to be complete and your team members are off track in different directions, they may have forgotten that OKRs were ever the focus.
Reliable ways to keep your OKRs at the forefront include weekly updates through email or team meetings, asking about progress during one-on-ones, or even creating an incentive for completing them.
5. Your Key Results aren’t measurable
One of the defining characteristics of Key Results are their measurability; you can check them off as they’re completed, and quantifiably connect them to demonstrate the progress made towards your Objective. The best KRs are numeric, especially if their advancements are trackable with a percentage or count.
Make sure your KRs aren’t too vague, such as, “Improve technical support capabilities.” How would a workforce check that off as complete? KRs always narrow down focus to one goal that can be finished cleanly.
| Do’s – Key Results | Don’ts – Key Results |
| 1. Increase home sales by 25% from 2021 2. Have a 10% share of clients with million-dollar properties this quarter 3. Overtake ReMax as the highest star-rated real estate company in the state | 1. Sell more homes this year 2. Try to secure clients with expensive properties 3. Obtain a great reputation |
6. Your Objectives are either too challenging or too simple
Making an Objective too challenging can lead to a discouraged staff and a missed opportunity to focus on more realistic endeavors. This is clear to most managers, but what about the ones who make their Objectives too easy?
There are two categories of easy Objectives. The first are Objectives that were already likely to be completed in the course of a regular work cycle; you might be part of a growing company whose Objective for the quarter is, “Increase the number of subscribers to our service.” Well, you’re picking up more subscribers every day, so there isn’t much to work towards.
On the other hand, you could create an easy Objective that’s off-topic from your company’s goals, such as, “Improve the capabilities of the remote to our Smart TV.” I’m sure that would be a cool thing to do, but it’s not the main idea of your workforce, and it certainly shouldn’t take a quarter to complete.
Finally, why don’t we look at some examples?
Examples of great OKRs
We made sure to include examples from plenty of different industries – check these out!
MANUFACTURING
Objective – Redesign our best-selling SUV to be safer
Key Result 1 – Build a larger crumple zone for the front end
Key Result 2 – Optimize the pressure of the passenger airbag
Key Result 3 – Ensure the front of the chassis will survive a stress test of 9,000 PSI
Key Result 4 – Earn a higher crash test rating from the IIHS
This example from the automotive manufacturing industry demonstrates the key components of the OKR method; the Objective of redesigning the vehicle is broad in scope, but the Key Results are specific and quantifiable. Once the four Key Results are completed, the Objective can also be considered complete.
HEALTHCARE
Objective – Create a more welcoming environment for visitors to our hospital
Key Result 1 – Subscribe to a more expansive cable package for the rehab wards
Key Result 2 – Add three new menu items to the cafeteria
Key Result 3 – Hang floor maps to ease navigation around the hospital
The healthcare industry isn’t as profit-driven as most others, but OKRs can still be used to improve facets of your business that aren’t graphed in the data.
HUMAN RESOURCES
Objective – Increase employee engagement by the end of the year
Key Result 1 – Send out a weekly survey, whether about work or something more casual
Key Result 2 – Implement monthly get-togethers on evenings or weekends
Key Result 3 – Include a company reward for increasing total client pull by 25%
Key Result 4 – Get employees small gifts for their birthdays
A helpful tip for creating an Objective is to include a timeframe if you feel like the subject is a bit broad.
INSURANCE
Objective – Become known as the most comprehensive auto insurer on the market
Key Result 1 – Determine what incidents don’t fall under any of our coverage options
Key Result 2 – Develop a premium plan that fully covers virtually every possible incident
Key Result 3 – Launch a new slogan that emphasizes our expansive coverage
The insurance industry is one of the most competitive ones you can manage in; OKRs could be the step that helps put you ahead of the others.
EDUCATION
Objective – Obtain a higher rank on the list of best private universities in our state
Key Result 1 – Allocate funds from the advertising budget to be used in the housing budget
Key Result 2 – Sign a contract for a fast food restaurant to be built on campus
Key Result 3 – Add two more campus shuttle buses to the circuit
Key Result 4 – Increase qualification requirements for incoming professors
Universities present a tough balance between improving quality and increasing profit. With measurable, actionable OKRs, you can find a way to hit both marks.
RETAIL
Objective – Increase our female customer base
Key Result 1 – Replace “outdoors” marketing campaign with a family-centric one
Key Result 2 – Create a designated aisle for makeup lines
Key Result 3 – Implement a loyalty program to be pitched at checkout
Interesting fact — women are more likely to be involved in retail loyalty programs/rewards memberships, which is why we included that Key Result.
INFORMATION TECHNOLOGY (IT)
Objective – Clear our physics program for launch in mid-Q4
Key Result 1 – Develop a debugging tool for physics simulations
Key Result 2 – Finish a complete design for the program’s user interface
Key Result 3 – Release a beta build to select customers by the end of Q3
OKRs can be especially important for the IT sector, as it’s likely a majority of the staff is remote.
SALES
Objective – Expand our product to overseas markets
Key Result 1 – Identify and sign a contract with a top European retailer
Key Result 2 – Increase our international sales by 30%
Key Result 3 – Test a second edition of our product that caters more to an international market
Key Result 4 – Hire bilingual sales workers
While the long term goals of a sales team can seem pretty straightforward, OKRs can align the team to focus on particular goals even more directly.
Whether you’re running a class project or a Fortune 500 corporation, OKRs can be an essential tool to bring a team together and complete a long term goal. Their knack for improving productivity and morale can even help improve employee retention!If you want to learn even more about OKRs, check out our e-book on OKRs for company success!