What is OKR, or “Objectives and Key Results”?

As a business owner or manager, the goal is always to grow and adapt. This requires setting ambitious goals early, communicating about them, and working together as a team to reach them—but most importantly, you also need to track and understand how you are doing along the way.

As your marketing agency, we consider ourselves to be on your team, and we have found that using the OKR model is an effective and genuinely helpful tool for naming milestones and achieving them as a team, one actionable item at a time. Below, we offer a OKR primer.

Defining OKR

OKR, or Objectives and Key Results, involve setting goals methodically as a team—and choosing measurable results to aim for. This, in turn, allows a team to track its progress, communicate about the shared goal, and support one another.

OKRs can be used for setting goals within your office, as well as for setting milestones for the business’s success. Some individuals choose to use OKRs in their own work, whether or not their team is also on board.

Let’s break this down into the two pieces: Objectives and Key Results.

Objectives

Objectives are the things you plan to achieve; in this model, they must be both concrete and significant to your business—and, hopefully, they offer some motivation and excitement in the challenge they pose. 

Key results

Key Results are points plotted on the journey toward your Objective, which can be formally monitored to keep track of how you are doing on the path to the Objective. They should be:

• Detailed and specific
• On a deadline
• Challenging, yet do-able

Because they are so literal, Key Results keep the team on track and effective.

When writing Key Results, ask yourself: will it be crystal clear when we have reached this result? They should be easy to verify once you are there, allowing you to check off each key result and know for sure you are moving toward the Objective.

The benefits of using the OKR model

OKRs are thought to help enhance communication and support more transparent, aligned, and focused company-wide strategies. They can also help avoid stagnation in your business and promote growth.

What an OKR looks like

OKRs contain an Objective, typically written in a brief sentence, followed by 3-5 Key Results to support it. They can also be written as a sentence stating what you plan to achieve with the 3-5 Key Results that will measure the Objective’s success.

OKR examples

Here is an OKR used by the city of Syracuse, New York from whatmatters.com:

“O: Achieve fiscal sustainability.
KR1: Reduce the general fund budget variance from 11% to 5%.
KR2: Spend 95% of authorized capital project dollars by the end of the fiscal year.
KR3: Spend 95% of grant dollars for grants from prior fiscal years.”

In this example, you can see that “fiscal sustainability” is broken down into clear, actionable Key Results.

Once all 3 Key Results are met, it is safe to say that the city is fiscally sustainable.

For a second example, consider this personal OKR, also via whatmatters.com:

“O: Run a 10K in under 50 minutes by June.
KR1: Go for a run 3x/week for at least 30 minutes.
KR2: Increase distance of run by 1 mile every week.
KR3: Increase mile speed by 5 seconds every week.”

Avoid these OKR pitfalls

While they look deceptively simple, writing an OKR that works is a skill that requires some effort to develop. OKRs should also be written collaboratively, taking into account feedback from several people within the organization, and undergoing several drafts before being finalized.

Here are some common pitfalls to watch out for when writing your first OKRs:

• Mixing up an OKR with a KPI: While KPIs, or Key Performance Indicators, are a great tool that we like to use, they are not the same. Meeting your KPIs indicates that you are succeeding, or your business is “healthy.” On the other hand, an OKR is a milestone that your company has yet to reach, and requires changes in order to get there.
• Maintaining the status quo, or business as usual: Again, OKRs should be change-driven, so make sure your OKR does not maintain the status quo.
• “Sandbagging,” or lowering your expectations to feed an appearance of success: As you work toward the Objective, watch for the temptation to soften the Key Results or the Objective in order to make success seem closer at hand than it truly is.

Top-down and bottom-up OKRs

Top-down OKRs come from company executives, while bottom-up OKRs originate with team members at all levels of your business. The benefits of top-down include aligning employees across different teams by assigning different Key Results to different departments in support of the same objective. On the other hand, bottom-up OKRs may encourage buy-in, innovation, and a spirit of ownership from all levels of the team.

Committed, aspirational, and learning OKRs

Proponents of the OKR model also break down OKRs into three more subtle categories: committed, aspirational, and learning. Committed OKRs are ones that you expect to fully succeed at. Aspirational OKRs may require some stretching and forging of new methods and directions, as they represent a truly new horizon for your business; they may even be more long-term. And learning OKRs really place the value on learning something new; they may be a preliminary step to a more action-oriented committed or aspirational OKR.

Evaluating your OKR progress

First of all, make sure that you are tracking your progress along the way. But once you have reached the end of an OKR cycle, there are several “grading” methods you may choose to use to describe your progress:

• Yes or no: Did you meet all of the Key Results and achieve the Objective, or not?
• Red, yellow, or green: In this rubric, red signifies a failure, yellow means that you made some progress, and green means that the goals were met.
• Percentage scores: Google’s own method of evaluating OKRs involves assigning a numerical score to each Key Result, then averaging those to determine the Objective’s total score.

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