Goal setting, tracking, and accountability can be a challenge when managing a team and driving results that have an impact. What are the right goals for your team that will have a meaningful contribution to your company? How do you keep on top of progress? How do you hold each other accountable if you miss a target?
Enter Objectives and Key Results, or OKRs for short. OKRs provide a great framework for managing these things with your team. My team and I have been using OKRs going on three years now. We’ve found them to be a very effective tool for holding ourselves accountable and tracking our progress towards our business goals. Here, we’ll learn about what OKRs are and how to implement them with your team.
What are OKRs and Why?
OKRs stands for Objectives and Key Results. It was popularized by the book, Measure what Matters, by John Doerr and the management practices of Andy Grove (former CEO of Intel). It was later adopted by Google and many other tech companies.
In some ways, OKRs are like KPIs, although there are important differences, where OKRs are a lot more effective. With OKRs, the Objective is a goal you are looking to achieve, and the Key Result(s) are measurements you select that gauge progress in accomplishing your Objective.
Each Objective can have many Key Results. An example of an OKR would be something like this:
Objective: Get a baseline understanding of how to bake bread in 3 months from now
- Key Result: Read 3 books on how to bake bread
- Key Result: Practice baking 5 loaves of bread
- Key Result: Participate in 2 bread-baking competitions
Notice that the Objective is written as the goal you are looking to accomplish, and the Key Results are ways to measure the accomplishment of the Objective.
Your progress on your Key Results aggregated together determine your “grade” in achieving your Objective.
Setting OKRs
The first step in setting good OKRs are determining the right Objectives. Each Objective needs to describe what is important to your business or team. They are usually easily derived based on the directives from leadership. If your leadership uses OKRs as well, this will make selecting Objectives even easier for your team. It’s also important that the Objective you pick matches and contributes to your organization’s or leader’s Objective. If there is a mismatch, you risk being ineffective.
Objectives should be high-level, but not too broad where they are unreachable. “Learn how to cook” is better than “Cook a lot of food”, as the latter is too vague and doesn’t clarify what you are looking to accomplish.
Set the Right Key Results
Key Results need to measure the advancement of the objective. “Watch TV 10 hours per day” will likely not help advance a “Learn how to cook” Objective.
Key Results can be strategic or tactical in what they measure. Using the example from above:
Objective: Get a baseline understanding of how to bake bread in 3 months from now
- Key Result: Read 3 books on how to bake bread
- Key Result: Practice baking 5 loaves of bread
- Key Result: Participate in 2 bread-baking competitions
The third Key Result would be a good example of a strategic Key Result, whereas the second would be a good example of a tactical one.
Strategic measures are best at tracking the progress of an Objective. The third key result above is an example of this as it measures how you’ve stacked up against others who bake bread.
Tactical measures like the second Key Result above aren’t as useful in advancing an Objective but are better at building new habits that will help in the long term. This becomes especially valuable when you are kicking off a change management initiative.
As the book, The Switch, by Chip Heath and Dan Heath describes, an important point of change management is making the process for a new behavior easy for employees to follow. New behaviors require an increased cognitive load, and staff will thus resist jumping into something that requires too much re-thinking. That is where tactical Key Results can be effective. They can measure a particular behavior or action that you want your team members to form a habit around.
Pretend you are sedentary and want to get more fit. Is 10 jumping jacks per day going to do that? Probably not. Will it get you in the habit of getting more physical activity than you are used to? Yes. Once the behavior is adopted, you can later get more ambitious in setting a more impactful Key Result. If the Objective involves a change in behavior or process, choose a blend of both tactical and strategic Key Results and ramp to more ambitious ones over time.
360 Degree Participation in Setting your OKRs
Ensure your team helps set OKRs. These are your team’s OKRs, and they should participate in determining them. If you impose goals on your team, they might not feel completely bought into them. You’ll also lose your team’s valuable perspective in finding the right ones.
Involve your manager in setting OKRs as well, or at least get their sign off after you and your team settle on the right ones. This ensures alignment both upwards and downwards on what you’ve selected. Reporting on progress is easy and the context of why certain OKRs were selected is preserved.
Your manager’s awareness of your goals and progress is also important to help them coach you towards success. They can hold you accountable and then celebrate your (and your teams) successes upon hitting your OKRs.
Pilot Measures
Sometimes you might want to pick a Key Result that seems important, but you are unsure of the right benchmark. You want to encourage risk-taking, but don’t want to penalize yourself or your team if you pick the wrong experimental Key Result.
To solve this, you can choose just a few Key Results per quarter as “Pilots”. By calling them “pilots”, you acknowledge upfront they are experimental and know you may be off in what targets you’ve set.
You’ll learn over the course of the quarter how to calibrate them, and are then better equipped the next quarter to set the right benchmarks. By designating them as pilots, you report on them, but know you might not do well against them. Thus, you may remove them from consideration in grading the Objective, but still maintain visibility on it and know better how to measure in the future.
Tracking OKRs
Google has created an amazing template for tracking OKRs. Here are some useful fields you can consider adding to this template:
- Thresholds for pass, fail and overachievement (more on this below)
- What the current result is so that the grading can calculate automatically
- Date last updated
Set Thresholds for Pass, Fail and Overachievement of each Key Result
A common way to grade OKRs is to track progress on a 0 to 1.0 scale. 0 represents a failing grade, .7 represents a passing grade, and a 1.0 represents a stretch goal. If by the end of a period, all of your OKRs reach a .9-1.0 score, you set the OKRs too low.
Thus, when determining Key Results, define a range of what threshold would be considered failing (a “0”), passing (a “.7), and an overachievement (a “1.0”).
Be Specific
When setting your Key Results, be specific in how you measure something.
- Example Key Result: Read 3 books on how to bake bread
Here, the measurement would be books finished, otherwise, you could just count reading the first page of each book and consider this a success.
If you don’t define how to calculate the result, one will always err on the side of “whatever looks better”. That would reduce the accuracy of the result.
Thus, you could reformat this key result as: “Finish 3 books on how to bake bread”.
Keeping Progress Updated
Ensure progress against Key Results is updated at least once per week. If the results recorded are more than a week old, the tracking becomes stale and unreliable. This will also mean any course corrections you’d need to make to stay on track will be missed.
Who is responsible to update the results weekly is also important. Assigning owners to different Key Results is an effective way to keep them updated. The owner selected can also be the person accountable for the result. Having each person responsible for updating 2-3 Key Results each, is quite manageable.
Executing Against OKRs
Once you set your OKRs, how do you go about executing against them and setting a framework to succeed?
Cascading OKRs
One important pillar of OKRs setting is ensuring your staff set their own set of OKRs in such a way that they contribute to yours.
Ideally, all layers of management from the CEO down to the Individual Contributor level all have their OKRs, with each subsequent level having more granularity than their manager. All should contribute to the same organizational objectives that the CEO has.
When you set OKRs with your whole team, not only does the entire team feel invested in them, but they also want to help each other hit the collective OKRs. If adopted at the CEO level, they are that much more effective, as it then encourages cross-departmental collaboration towards common goals.
Make them Public
Everyone’s OKRs should be publicly visible within the company. This allows anyone to understand what goals you are working towards. If someone tries to recruit you to a side project that won’t help you hit your goals, you can point to your published OKRs and politely decline. It helps your team, your boss, and other teams understand the big picture, what you are marching towards, and how your organization is contributing to the company’s goals.
Review During Weekly Team Meetings
The weekly team meeting, as recommended in the book, The Advantage, by Patrick Lencioni has proven a great place to review OKRs regularly. Try to time-box spending no more than 15-20 minutes reviewing OKRs during the meeting. Weekly team OKR reviews help keep progress on OKRs updated and course-correcting to make sure you can hit them.
Action Planning
The great thing about OKRs is that they create a mechanism for accountability, measurement, and tracking. OKRs fall short in the action associated with results. That’s where action planning against OKRs can help.
Each quarter with your team, create action plans for each OKR. Check-in with each of your team members periodically on their progress on their action plans. You can do this during one-on-one sessions, but it’s also important that the subordinate isn’t micro-managed in getting the action planning done.
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