OKR TIPS
THE ADVANCED GUIDE TO USING OKR
foto
by Kate Devyatkina, CEO of Ahundred
on December 9, 2019

Our guide will help you craft efficient goals to put you far ahead of your competitors.

Let's get started or introductory part

Every year, businessmen and employees around the world seek to find the perfect system for simplifying their everyday working life and automating their processes. In fact, we can't judge them because it yields results and we regularly find useful tools for our operational work.

Everyone knows that following routine is usually quite time-consuming and distracts from your overall goals for the sake of completing minor tasks that will lead to success. So all these tools, frameworks, etc. are made to save your time and allow you to concentrate on the important things in your work, which can bring your organization to an absolutely new level.

We live in a world where much time and effort is spent on goal achievement. For us, it is a kind of measure of success and a rating of the fact that we are going forward step-by-step. That's where the OKR framework can help.

Objectives and Key Results is a methodology that gained popularity in the modern management system. It allows to align team and individual goals, and to provide an effective control on the realization of set tasks. This framework really stands out among others owing to the ambitiousness of set goals. It will allow you to swing the fences in order to gain them.

Why I wrote this article? Using it in our company, we have been absolutely satisfied with its effectiveness and, of course, in terms of our company's marketing strategy. I've answered dozens of questions about OKR on Quora and it got me thinking that people don't have enough information or are just idle about searching for it on the web. That's why this guide is supposed to be an OKR handbook for all aspiring specialists. You'll get as much info as possible towards implementing this framework and I bet you'll love it the way I do.

Kate Devyatkina
CEO of Ahundred

That's how it all began

Initially, it was Peter Drucker who kickstarted the process of goal achievement methodology development. It was called Management by Objectives ideology that was simplified and slightly transformed by Andy Groove into the modern version of OKRs.

So that's why he, a former CEO of Intel, is considered the "father" of OKR. Thus, he was the first who put it into practice after implemented it in his own company.

However, OKR has attained international fame as a result of the work of John Doerr, who joined Intel, mastered the basics of OKR, and became an advisor at Google. He presented OKR to the founders who implemented and deployed OKRs and are now publicly sharing their experience with other companies.

The advanced guide to using OKR

OKR basics

Some people consider it very difficult to implement, hence the hesitation. According to my experience in this field, I can say that it is not so laborious as you might think. The only advice I can give you is to take it seriously and you'll notice great changes both in the results and processes.

OKR is an abbreviation of Objectives and Key Results. Objectives are the goals which are created, set, and tracked within this OKR system and their success is measured by Key Results.

At the end of each year, a company creates a set of goals which are to be achieved in the next year. But there are some cases when some of your goals become unimportant. There is no need to panic because this methodology is intended to make focus your processes so you can move forward.

There are three types of OKRs:

  • Organization goals
  • Team goals (department)
  • Individual goals
The advanced guide to using OKR

All of the company's goals have to be aligned. Their overall success depends on the goals at all levels.

  • Timeframe. There is no ideal time for setting goals, it all depends on your business. If you are a startup with a constantly shifting strategy and rapid growth, it is better to set goals in the shorter term (top-level OKRs for 1 year, terms and individual quarterly) although enterprises can implement for the longer term (5-10 years for ultimate goals, 1 year for company goals and team quarterly).
  • Quantity. Your OKRs should be restricted in quantity. Otherwise, you are risking losing overall focus and employee engagement. Moreover, usually a significant number of goals in the long run turn out to be blurry. The perfect number of OKRs is from 3 to 5 at each level.
Why is OKR beneficial?

In fact, most business people consider this framework extremely efficient and use it in their work. What makes it so good? Why have most companies gained success using it?

Transparency
Most companies, no matter what size, are used to building their work based on so-called "clandestine meetings." Certainly, it is a bit overrated, but the ultimate goals and company perspectives are discussed behind closed doors among top-management. OKR brings full transparency to companies. Now, all of your employees can see each others OKRs and, moreover, they are created by themselves.
Alignment
In the past, the goals of your company significantly differed from the tasks of your employees and oftentimes their work was totally absorbed by routine. Now, you all work jointly and your company success directly depends on the contributions by you and your colleagues. Therefore, as I already mentioned, all of the goals are created by workers and aligned with company objectives.
Increases engagement
It is really difficult to ensure engagement from your employees because some of them, especially those working at big companies, don't really feel important along with hundreds of employees. By implementation the OKR framework to your company, you can ensure that this happens. Its main benefit is that employees play a big part in creating goals. There is an awareness of the fact that everyday work is a small, but crucial contribution to the big goal. That empowers them to be more enthusiastic for the total engagement in the overall processes.
Provides flexibility
Flexibility is especially important to fast growing businesses like startups. Goals have to get used to rapid changes this is where flexibility can help. Also, it works in cases when you understand that one of your goals are of no importance, so you can get rid of it, change focus, and move on.
Helps to maintain focus
Due to the regular reviews and check-ups, you are able to see the progress of one or another goal. Also, it helps to understand and review the reasons why the goal failed to achieve. Once you understand the ground, you can reformulate goals, set new ones, and begin achieving them.
The advanced guide to using OKR

Objectives

Objective is a precise, brief, and ambitious formulation of the goals you want to achieve.
The main key is to create it according to the rules to make it work for you.
Firstly, you should stick to such criteria:
1
Challenge

Your Objective should be ambitious enough to be achieved with great effort, however realistic they are. This challenge helps you expend little to no effort on goal achievement.

Don't be afraid if you fail to complete it 100%.

60-70% of completion is already a great result, which can have an impact on overall company success. By the way, sometimes total completion of the goal may be an indicator that your goal wasn't ambitious enough and you have to review your goal setting strategy.

2
Significance

Your goal shouldn't contain any routine tasks, but only important steps for company development and prosperity. Define several crucial matters you are aspiring to in the next year or couple of years. On the basis of that, compose the right objectives, the completion of which can lead your company to a new level.

3
Clearness

To reach total engagement among employees, set Objectives formulation which is clear to everyone in the company. Besides, no one can think the same way as you do, so try picking words that are understood by your employees the right way, so as to avoid awkward situations.

4
Deadline

Restrictions in time helps your employees perform effectively. Focus is also encouraged. Moreover, a time frame gives you an opportunity to review your goals in cycles, so that you can understand what is actually working and what is to be reviewed and reformulated for further achievement.

Examples of Objectives:
Objective 1: Provide a successful product launch by Q3
Objective 2: Increase overall profitability by 38% by Q4
Objective 3: Build a financial strategy for 2 years

Key Results

Key Results serve as an identifier of your progress and helps to get your ducks in a row to accomplish goals. It is a call-to-action formulation which contains metrics and has to be quantifiable.

Pilot team
It's a kind of trial version where you have an opportunity to test all the nuances of OKR and the way it works in terms of it.

Besides, it's a good way to work and detect pitfalls your team can face before implementing it for all employees. In terms of this approach, a team of enthusiasts can complete the whole cycle detecting the best way this methodology can work for your organization and its needs.

In the end, you'll find people who are really experts in this methodology and they'll help implement it properly for the whole company. However, it may prolong your overall implementation process.

Examples of Key Results:
Key Result 1: 20 leads conversions daily
Key Result 2: Increased employee engagement by 30%
Key Result 3: Hire 6 new specialists by Q2

Initiatives

It is a common mistake to confuse Initiatives and Key Results, so now I'm going to explain what Initiatives are how they differ from Key Results.

First of all, Initiatives answers the following questions: what are we going to do to reach your goal, what actions do you need to take, and what tasks do you need to accomplish. Key Results only measures the level of goal completion progress.

Regular check-ups of your Key Results will help you understand whether your Initiatives are composed correctly. If your metrics are at the same level and have not increased, then think of changing your Initiatives. Because they should yield results for Key Results and consequently benefit the Objectives they relate to.

OKR cycle or how does it actually look?

As any other undertaking, OKR demands sticking to step-by-step rules for performance. Surely, you can do everything according to the method of trials and errors, but why not make this shorter and begin your path to goal completion from the start.

The advanced guide to using OKR

So, here is the wise sequence of actions which guarantee total success if everything is done properly:

  1. Usually at the end of the previous year or at the beginning of the current year, your organization defines and composes a row of top-level OKRs with contribution from part of your employees.
  2. Then, it's time for composing company-level OKRs. They are created by executive team taking into account the team's feedback.
  3. Teams OKRs and initiatives created and aligned with top-level OKRs.
  4. Teams and departments have weekly check-ups to check their progress, correct problems, and track results.
  5. If your company uses quarterly OKRs, then it's better to review your OKRs in the middle of the quarter.
  6. At the very end of the cycle, you will have a clear image of what was done right and what needs correction.
  7. Renewal of the cycle.

As you can see, all steps are pretty clear and simple. The only thing you need to reach all the desired goals is to follow all of them when implementing OKRs in your company.

Taming the OKR beast (implementation)

At the beginning of the implementation process, decide which principle of defining OKRs to choose. They are both right, you just need to pick one that fits your business needs:

  • Bottom-up
  • Top-down

Bottom-up principle presupposes creating individual OKRs first and then proceeding to the upper levels of OKRs. This method provides employees engagement in the further process of goals achievement.

Top-down method is a cascading of OKRs from top-level individual goals. So Top Management sets one ultimate goal and each team and individual should set their OKRs the way they are totally aligned with this overall goal. This method is considered effective from the point of great alignment between the goals of all levels.

3 ways to implement OKR methodology

So, let's proceed to the next step after you have picked the method of OKRs creation and have defined them. There are several ways to implement OKR methodology in your company. We prefer the first one, but it's up to you to decide

Pilot team
It's a kind of trial version where you have an opportunity to test all the nuances of OKR and the way it works in terms of it.

Besides, it's a good way to work and detect pitfalls your team can face before implementing it for all employees. In terms of this approach, a team of enthusiasts can complete the whole cycle detecting the best way this methodology can work for your organization and its needs.

In the end, you'll find people who are really experts in this methodology and they'll help implement it properly for the whole company. However, it may prolong your overall implementation process.

Heads only
Heads only approach implies setting first company and team-level OKRs and only then the individual ones. As with each approach, it has its pros and cons.

As for pros, all the team leads and managers will be involved in the process and will obtain experience to further share with the department or teammates.

Certainly, it will delay rolling out to the whole company, as with the previous approach.

General Implementation
General Implementation means that, from the very beginning, you present and roll out OKR methodology across the whole company (teams, departments, individuals).

First, it may seem to be an impossible task, but you can make sure it will work, especially if you are a small to medium sized company with a flat hierarchy.

The overall implementation process should be followed by training all employees of one level after another. This training is provided by so-called OKR masters who help you form OKRs and measure your KRs. They also monitor the process and hold regular check-ins.

Usually, it takes about a year to overcome all difficulties, try this methodology in action, and complete the whole cycle. So, be patient and you'll see that it really delivers great results.

Kate Devyatkina
CEO of Ahundred



OKR as the crucial process

Once you've tied all the company's processes around the OKR, you have to build a regular review process. The key to its success is to use and engage with it on a regular basis. OKR is designed the way that Objectives are set quarterly and the KRs are updated weekly. All this makes the work on your OKRs an indispensable process in terms of your everyday routine.

There are 5 stages of checking the progress of OKRs:

1
Weekly reporting

There is no need to write extensive reports, which are really hated by everyone. Weekly reports presuppose answers to such questions: "What is planned for the next week?," "What has been done this week?," "Were there any issues you faced?"

Each employee should list around 3 to 5 goals, accomplishments, and challenges. Thus, the Manager will have a clear image of what is actually going on with his team and can review some goals and detect their importance for the defined period of time.

2
Weekly meetings

Such meetings are conducted to provide an effective process for working on OKRs by each team member and their joint efforts towards achieving goals.

As all OKRs across the organization are totally transparent, everyone is aware of what their colleagues are working on at the moment. Although with small companies and startups, weekly meetings can be held for all employees.

3
Monthly review

At the end of the month, managers and teams review the progress of company OKRs and track how employees are moving forward. Also, these check-ins allow the team to fix and rethink some of the OKRs before quarterly grading.

There are two levels of reporting: (1) between top-management and team leaders and (2) direct reports of team leaders.

4
Quarterly grading

During quarterly grading, it is necessary to measure and grade your KRs, but not the Objectives, which is what most people mistakenly do. This can be done through several ways: with the help of done/undone approach and giving a percentage value to each KR.

As mentioned below, OKRs are so difficult to manage so it is rare to achieve 100% of them. Usually the success rate ranges from 60-70%. Further, your Objective is measured by the completion of KRs. If you have accomplished none of your KRs, then your Objective remains unchanged and equals 0.

Don't give up if your quarter will be finished with 0 progress. It's ok if the overall process will take some time It usually takes 3-4 quarters to get into the process.

5
Yearly Review

There are company level OKRs which are reviewed annually. It is quite a simple process, as all the lower-level OKRs are aligned and already checked several times. Sometimes company-level OKRs can fail, but there is no need to panic because we all know that these types of Objectives are quite ambitious.

In terms of company success, you have made great progress in comparison with the previous year, when the OKR system wasn't implemented yet.

Why do companies fail when setting OKRs?

1. Overdoing with Objectives
Everyone knows that it's important to find the golden mean. Moreover, having to many Objectives can distract your overall focus. It's better to define several crucially important goals for your company's development and stick to them.

2. Poor planning
It is quite a widespread issue among those who are in the process of OKR implementation. As with each methodology, it demands careful previous planning to be brought to life as expected. So, take your time and prepare the ground well.

3. Putting your goals on shelf
OKR is a system that needs constant progress checking and all your tasks and efforts should be tightly connected. So forget about setting your goals aside, as your company's success directly depends on you.

4. Excessive complexity
Keeping things simple is the key, especially when it comes to OKR methodology. First of all, focus mainly on the goals that are critical to your company at the moment of realization. Begin your path and move confidently.

5. Absence of flexibility
OKR is a flexible framework, so it demands this flexibility from your Objectives.

6. Constant challenges
Usually such challenges can take employees out of focus, especially ones who are perfectionists. You have to explain that aspiring for perfection is welcomed, but achieving 70% success is already a big step.

7. Miscommunication
Sometimes people think that everything they create is pretty clear for others. Often, miscommunication appears between colleagues which significantly complicate and delay the work on goals. So, make sure everyone understands goal formulation and solve the problems at the initial stage.

OKR templates for all occasions
Product marketing team goal
Objective: To provide a successful launch of a new product on the market in Q3

Key Results:
1. Make all website updates by the end of Q1
2. Provide partners and potential clients with an exclusive pre-launch option in Q2
3. Finish product data sheets by Q3
Sales team goal
Objective: Generate 8 new clients who are using the advanced plan by Q3

Key Results:
1. Contact 500 potential customers
2. Hold 200 demo-call
3. Provide 100 customers with free trial access
Lead generation team goal
Objective: Get +250 leads

Key Results:
1. Get 100 new e-mail leads from marketin
2. Get 70 organic leads
3. Get 50 Google Adwords leads
Online marketing team goal
Objective: Increase website conversions by Q3

Key Results:
1. Increase website visitors number by 5% a month
2. Launch a new ad campaign in Q1
3. Grow the Landing Page conversion rate by 7% by Q2
Content marketing team goal
Objective: Strengthen the blog content strategy

Key Results:
1. Compose and publish 25 new articles by the end of Q1
2. Hold and publish 3 interviews with industry influencers
3. Grow blog subscribers by 1000 by Q3
PR team goal
Objective: Improve and increase brand awareness till the end of Q4

Key Results:
1. Hold 10 calls or meetings with industry experts
2. Conduct 20 media meetings or calls by Q3
HR team goal
Objective: Increase employee retention by Q3

Key Results:
1. Increase employee satisfaction and engagement level by 30% by Q2
2. Make a regular surveys on the company's atmosphere improvement
3. Conduct research on the paid salaries and benefits, in comparison with other companies on the market
Engineer team goal
Objective: Release an updated product architecture by Q3

Key Results:
1. Contribute 11 story points by Q2
2. Conduct 3 tests with QA specialists
3. Update database by Q2
4. Make the data migration completed by Q2
Product management team goal
Objective: Conduct a successful product launch

Key Results:
1. Grow the paid trials rate from 27% to 47
2. Increase trial sign-up rate from 10% to 25%
3. Grow the referral revenue from $10,500 to $30,500
Customer support team goal
Objective:Launch a new CS process by Q3

Key Results:
1. Implement a new CS platform by Q2
2. Release an updated version with 20 additional "how-tos"
Finance team goal
Objective: To improve annual budgeting process

Key Results:
1. Bring all VP engineers up to date on the new processes in the company by the end of Q1
2. Review budget proposals by mid Q2
3. Compose final budget by the end of Q2
Operations team goals
Objective: Take IT and Infrastructure to a new level by Q4

Key Results:
1. New backup system implementation by the end of Q1
2. Reduce service downtime by 20% by Q2
3. Improve internal response time and overall IT satisfaction

Wrapping it up

New year - new beginnings! Open yourself to significant changes in 2020 implementing the OKR framework.

Are you a person who goes around in circles and comes back to the beginning without gaining results? Are you making painstaking efforts? Stop being a hamster in the wheel! Start your OKR implementation process now and enjoy the results.

If you are still hesitating, pay attention to the experience of such great companies like Google, Linkedin, and Amazon, which are great examples of successful implementation of OKRs. You can yield great results from proper goal achievement.

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