What is an OKR? The basics

OKRs are a strategy for measuring progress towards a goal, as well as keeping employees aligned with what needs to be achieved to reach them. This method can be used by both teams and employees in order to set goals, regardless of industry. You can apply OKR methodology to fields as wide ranging as administration, marketing, government, tech, software development, and more. 

Within the OKR, there is an Objective, which sets out the direction of your strategy, while its Key Results tells you what conditions need to be met in order to successfully reach your Objective. 

Objectives

Within your OKR, an Objective is a statement that sets out what you will do. You might create a statement like ‘I will aim to attract new users to our product for Q1’.

Key Results

Your Key Result will be what needs to be done in order to meet the goal set out by your Objective statement. A good Key Result usually meets the following conditions:

• It’s a specific, quantifiable result.
• It’s achievable within a given timeframe.
• It provides a good balance between challenge and achievability.

They are usually both quantitative, which means that they are measurable, as well as qualitative, such as in the case of employee survey feedback regarding performance and satisfaction.

So, your OKR for the above statement could be ‘I will aim to attract 10% more new users to register for our project within x weeks’. It could also be ‘I will aim to attract x percent more new users from a particular demographic to register for our product in Q1’. Therefore, your Objective statement can generate plenty of different OKRs with different Key Results. 

What is the OKR methodology and how do I know it’s effective?

The OKR method was initially developed by Intel’s Andy Grove and was finessed by John Doerr who gave it the name OKR. The methodology has since been adopted by companies of all sizes all over the world. Historically, it has been used as a way to break down difficult to measure goals into Key Results that can be quantifiable and measurable over a period of time. 

Therefore, an OKR is simply a methodology for thinking around the problem of meeting your company’s ambitions, regardless of how big they are. A business goal like ‘Reducing our carbon emissions to net zero’ might seem difficult to achieve without any clear path of how to get there. However, when companies are able to combine this statement with Key Results, they are able to create a path and a timeframe for reaching this. You might create several OKRs like ‘Scaling down value chain emissions by 20% in x amount of time’, or ‘Offsetting 50% of emissions in x amount of time’. 

Benefits of using the OKR methodology

There are a lot of other benefits to using the OKR methodology to reach your targets. That’s because they are a quick and easy way to create actionable goals along a roadmap, breaking down your company’s ambitions into achievable chunks. It also means that you can create stretch goals, which means that you can create slightly more challenging goals for your teams and employees to reach. 

Stretch goals

With a stretch goal, you’re able to set goals that you might not completely reach, but that’s OK in this case – it’s just a useful aim to have if you’re looking to challenge your team’s productivity or push them slightly outside of their comfort zone when it comes to meeting targets. This does not mean your team has done a bad job if they do not reach their stretch goal – instead it helps provide you with a better indication of what they are capable of achieving next time you set them a target.

OKRs increase collaboration potential

Another benefit of using OKRs is it can help your different teams to work together in order to achieve common goals. While your marketing department and product design team have their own individual targets to meet, having OKRs helps them to work together towards Objectives that apply to everyone regardless of their role in the business.

OKRs help direct employee daily goals towards larger objectives

OKRs help to align an employee’s daily goals towards your bigger company Objectives. This helps your employees to understand how the work that they do is relevant to the goals of their business and what they need to do in order to help your company achieve them. Even if they have a small role to play, having OKRs will help them understand how the work they do is beneficial, potentially boosting their engagement and productivity as well.

OKRs encourage employees to set their own targets for meeting Objectives

While plenty of companies set targets on behalf of their employees, OKRs can provide your employees with greater flexibility and freedom, while keeping in mind what they need to do in order to achieve company-wide goals. This means that your employees still have to take on board the overall ambitions of the company while being able to make their own decisions in terms of how to reach them, giving them greater autonomy and a chance to practice decision making.

OKRs for teams, individuals and company-wide goals

As well as making your goals more manageable over time, the OKR methodology is also a useful means to connect your employees with your overarching Objectives. It can help them to see how their individual targets involve working towards meeting these Objectives, and how they can expect to meet them. This makes it easier for employees to see how the work they’re doing is useful, and also where they could potentially streamline their own processes to reach the right targets.

This means that because of the OKR methodology’s versatility, you can create OKRs for individuals, teams and company-wide ambitions. Company-wide goals can be achieved by setting larger, more ambitious OKRs, like ‘Achieving zero waste by x amount of time’. 

However, individual and team-based OKRs do not have to be quite as ambitious (while still remaining aligned with your business goals). This could be centred around drives to encourage customers to sign up for newsletters, in which case your team or individual goal could be ‘Have 1,000 new customers sign up for our newsletter by the end of Q2’. 

An OKR helps you to keep your employees motivated towards your overall company objectives. It also helps to break down your goals into actionable tasks that can be achieved within a particular timeframe. OKRs can be beneficial as they can help you to introduce stretch goals, increase collaboration, employee autonomy and help employees to see how their daily tasks help your company to reach their overarching goals. OKRs are effective across teams and your entire company, making it a versatile methodology to use.