The Power of OKRs

Objectives and Key Results (OKR) is a great and lightweight framework for goal setting and tracking. 

Great, because OKRs have the power to unlock the enormous potential of your teams reaching very ambitious goals. The framework drives alignment, transparency, and motivation.

Lightweight, because it is easy to understand and (quite often) difficult to master, at least at the beginning. 

Here are some things you should consider when starting using OKRs, looking at the easy and the difficult (I would say challenging) parts.

Easy to understand:

You define Objectives, and you identify the corresponding Key Results. That’s it. 

You can use OKRs on every level, from Company Level ( Company OKRs) to Department level (Department OKRs) to Team level (Team OKRs) to the individual level (Individual OKRs). When defining OKRs, we recommend triggering a top-down and bottom-up approach. That assures you get the buy-in and the best possible OKRs. We will post an article about this very soon.

A good Objective answers the questions: what do we want to accomplish (as a team or organization). A good question starting an OKRs session is: 

What would be great to achieve in the next quarter? What would you be proud to deliver, and why?

Start thinking bit. I am German, and I know we Germans tend to have some issues with thinking BIG 🙂 

Good Objectives are ambitious, inspiring, and qualitative. Here are some examples: 

  • Accelerate our recurring revenues
  • Build a kick-ass product/tech/leadership team
  • Implement a user-testing process
  • Become a data-driven company
  • Continuously delight our users

If you would print it on a t-shirt, that is a good sign.

If you want, you can add the “why” to the “what,” but then the t-shirt thing might not work as it is too long. 

  • Become a data-driven company to build a product our users/customers love. 

The “to” is the why part.

Good Key Results answers the questions: how do we know that we accomplished/achieved the objective and how good are we. It is measurable and quantifiable, lead to objective grading. It does not tell you how to reach it. A good question in an OKRs session is: 

How do we measure our success?

Here are some examples:

  • Decrease our churn rate to under 2%
  • Increase our conversion rate by +6% (from x to y)
  • Increase our App store rating +4,3 

Take the example:

  • Decrease our churn rate to under 2%

It can be measured; you can update it regularly as you make progress. But it would be best if you started thinking about how to move the needle. What initiatives you need to drive to have an impact on that number.

Difficult to master, here comes the tough part.

Defining OKRs

Defining the right Objectives and corresponding Key Results is one of the hardest things to do and requires a great deal of thinking. It has a simple rule: shit in, shit out. 

Identifying your blind spots

OKR sessions trigger healthy discussions as you need to agree on what you want to focus on and whatnot. Quite often, you realize that you do not have numbers to track your progress. If a team needs a couple of sessions to define proper OKRs that indicates a misalignment within the group. In the beginning, it is normal that it takes some time to align. Along the way, the process should improve. Ideally, it would help if you had an hour to come up with your OKRs. Yes, be ambitious. 

You are overestimating your capacity as a team. 

You can read quite often that: 

  • You can have up to five Objectives per Goal Cycle. 
  • Each Objective can have up to 5 Key Results. 

I would say a good number is to have 2-3 Objectives and up to three Key Results per Objective. If you start, considering starting with one good OKR with three Key Results and see how it works for you.

Here is why:

  • The more Key Results, the more complicated it gets. Please have in mind each Key Result triggers a couple of initiatives to move the needle of it. Will do the math in a minute, and you will see what I mean 🙂
  • Focus on what is essential, as you will have many (operational) topics that need to be done on top of your OKRs and eat up a good portion of your time

Many teams run through an entirely frustrating process. They define their OKRs. Let’s say 4 with 4 Key Results per Objective. That leads to 16 Key Results you need to track and update. Then you kick-off, let’s say three initiatives for each Key Results with lead to 64 activities. That is a lot to coordinate.

When you grade your OKRs at the end of the Goal Cycle, let’s say three months the teams realize that some of the Key Results have not moved. 

Thought on timing

Quite often, you can read that the OKR should be achievable in one Quarter (typical goal cycle). We will post an article about the OKR Goal Cycle very soon. However, you can define your goal cycle. 

Here is my view on this. I would say especially at the beginning it takes more effort to come up with good OKRs and one-quarter flies by quite quickly, especially Q1. I think that if you find an OKR that you and your team feel comfortable with, makes sense, and spans over more than one goal cycle, that is fine. You can update the Key Results for the next goal cycle(s). The beauty, you can see the progress as you update the Key Results, and you have an Objective that is motivating. If it spans across more than one goal cycle, I would say it will be ambitious, which is good.

The best way to get used to OKRs is getting started. Do not try to master OKRs from the beginning. See this as a journey with an enormous learning curve. Let’s get started!

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