One of the biggest challenges that organizations face when adopting the Objectives and Key Results (OKRs) system is how to write OKRs.
Whether you’re a Planview LeanKit ™ or Agile Program Management solution customer that would like to take advantage of the OKRs functionality we launched recently or you are simply interested in learning more about OKRs, here are some pointers for writing effective Objectives and Key Results.
What are Objectives, Key Results, and Initiatives?
The OKRs framework provides a simple, transparent way to set goals and achieve alignment across organizations and teams. The OKRs system helps connect the dots between long-term strategy and short-term goals.
OKRs put the focus on value-based outcomes, rather than outputs such as delivering an increment of work or project on time and on budget.
Organizations and teams create big, challenging goals that are specific, measurable, and time-bound. Specifically, OKRs help to answer two questions:
- Where do we want to go? The Objective
- How will we measure our efforts to get there? The Key Results
The term “initiatives” is sometimes used in the context of OKRs to define the tasks, projects, and activities that teams will use to obtain the results.
What’s the Main Difference Between OKRs and KPIs?
OKRs and key performance indicators (KPIs) are complementary. Learning how to write OKRs requires understanding the differences and how both can work together.
KPIs are critical measures of business success that don’t often change. These are metrics that organizations track over time, such as financials (revenue growth) and sales (net new customers).
In contrast to KPIs, the OKRs framework is ideal for novel or ambiguous situations, where no baseline exists for comparison.
For example, teams may need to create an innovative new product. The shorter goal cycles of OKRs work well in an environment of frequent experimentation and change, such as Lean and Agile.
Teams may set an OKR to address a new issue impacting a KPI. OKRs can also become KPIs once organizations achieve an objective and conduct ongoing measurement.
Used together, OKRs and KPIs provide a more complete picture of an organization’s progress, while expediting decision making in the intervals between KPI measurements.
Read Next: OKRs vs. KPIs: Understanding the Differences
Basic Formula for How to Write Effective OKRs
OKR evangelist John Doerr developed a simple formula for how to write effective OKRs:
We will __(Objective)__ as measured by __(these Key Results).
Here is an OKR example adapted from Doerr’s WhatMatters.com website:
We will (Objective): Design a UX so intuitive that customer service inquiries will be rare in six months.
As measured by:
- Key Result 1: UX design matches 100% of customer requirements.
- Key Result 2: Fewer than 1 UX-related customer service inquiry per week.
- Key Result 3: Scale infrastructure to support 100,000 users by end of quarter.
This is an effective OKR, because it meets the following criteria:
- Ambitious: The Objective is challenging, providing a qualitative, inspirational direction for the team.
- Time-bound: Both the Objective and Key Result 3 provide the UX team with realistic deadlines.
- Measurable: The Key Results are quantifiable and easily verified.
- Concrete: The Objective and Key Results are clearly defined and simple to understand.
- Action-oriented: These are outcomes the team can own and work towards.
This basic formula is the foundation for knowing how to write OKRs. It’s also instructive to know what not to do.
Read Next: Examples of OKRs: Real-World Examples You Can Use Now
Common Mistakes When Writing OKRs
It may surprise you to learn that typical goal-setting processes can undermine your OKR efforts, especially when you’re learning how to write effective OKRs. It’s easy to make mistakes when teams have experience with more traditional goal-setting systems.
Here are some mistakes to avoid when developing OKRs.
Adopting a top-down approach
The OKRs framework is not meant to be part of a bureaucratic process where goals are dictated from the C-suite to the rest of the organization.
Instead, OKRs should be set both top-down and bottom-up. In this unified goal-setting approach (often referred to as “bi-directional” goal setting), leaders can and should use OKRs to set the organization’s strategic priorities and objectives. But teams and their team leads should be allowed to determine how to support these higher-level objectives with ones of their own.
Writing OKRs without team input
A prescriptive approach to writing team-level OKRs goes against the spirit of the methodology, as well as Lean and Agile practices. Not consulting teams about the OKRs they will be responsible for can stifle creativity and engagement. Teams have the unique expertise to know what needs to be done and how to achieve it. This autonomy is critical, especially in a fast-paced Agile environment focused on value delivery.
Creating accidental silos
If teams create OKRs in isolation, the chances of conflicting priorities and uncoordinated work efforts increases. There’s a fine line between giving teams the freedom they need and planning work across teams and teams of teams. Understanding these dependencies is a prerequisite to setting effective goals and ensuring alignment.
Read Next: Agile Teams: Dependency Management and Visualization
Making OKRs too easy
A critical element for grasping how to write OKRs is to remember the framework’s purpose: To facilitate continuous business growth and improvement by pushing the envelope. OKRs that are too easily reached defeat this purpose.
Using OKRs as an individual performance metric
Plain and simple, OKRs are not an employee evaluation tool. Using OKRs to evaluate individual performance and make compensation decisions can promote “sandbagging” — i.e., intentionally setting small goals and low targets to ensure success. Small goals and low targets can sabotage the ambitious goals that OKRs are designed to promote within an organization.
Going overboard with too many objectives or too many key results
OKRs help narrow down the work that matters most to the business for teams representing all parts of an organization. Ideally, teams will manage no more than five Objectives and three to five corresponding Key Results per Objective. Any more than this, and teams may become discouraged or lose their focus.
Treating key results as a to-do list
Key results are not tasks or activities. The litmus test for key results is: Will they make a positive impact on the business and your customers?
How to Write OKRs in 5 Steps
Step 1: Adopt a unified approach to goal setting
The OKRs framework is unifying by design if followed closely. Teams should develop OKRs in context with other teams as well as the organization’s goals and priorities. Otherwise, teams are just islands of people guided by their own goals and values.
Step 2: Revisit your purpose
The practice of setting OKRs provides a good opportunity to re-examine and reinforce the team’s reason for being. What value does the team bring? Is the team fulfilling its responsibilities? Are the Objectives being set within the team’s purview? While those are all important considerations any time you’re using the OKRs framework, they are especially useful questions to answer when you’re learning how to write effective OKRs.
Step 3: Aim high, but not out of reach
OKRs should stretch the bounds of what’s possible but be attainable given the team’s resources and expertise. If a goal is too outlandish and unrealistic, it may demotivate teams.
Step 4: Brainstorm and debate key results as a team
If the team is going to be responsible for delivering the key results, then every member should have a say in drafting them. Brainstorming drives engagement in the process and ownership of the OKRs. A healthy debate ensures that the key results are as challenging as possible.
Step 5: Don’t forget interdependencies
To write effective OKRs, it is not only important for teams to align with company strategy but align with each other as well. In order to do so, they need a good understanding of how their work (and OKRs) are connected to other teams, and vice versa.
For this, it’s critical to find an OKR solution that’s tied to the actual work being done andallows teams to toggle between hierarchies and organizational levels to understand how objectives are pursued, connected and shared.
Read Next: OKR Software: What it is and What to Look for
We’ve Written our OKRs. Now What?
Knowing how to write OKRs properly is the first step. To successfully drive the desired outcomes, organizations and teams should take these actions.
Make OKRs visible to everyone
Transparency ensures that everyone is on the same page. Teams who understand how their work contributes to the organization are more engaged and motivated. This also makes it easier to track progress, resolve conflicts, and manage dependencies across the enterprise.
Don’t set them and forget them
Similar to Agile, OKRs are iterative. Ideally, teams analyze their OKRs weekly to ensure progress. This facilitates agility and adapting to today’s rapidly changing market conditions.
Celebrate 60-70% attainment
This is part of the cultural shift in embracing OKRs. Because reaching 100 percent of them is a rarity, teams should celebrate the 60 to 70 percent goal. This reinforces the commitment to stretch goals.
Leverage good OKR software
OKR software refers to dedicated tools that organizations can use to set, communicate, track, and measure goals. Ideally, organizations and teams can define and monitor OKRs in the same tool where they manage and execute their work.
Continuous Improvement with OKRs
Like anything worth doing, learning how to write effective OKRs takes time and practice. Use these tips as a starting point or a refresher if you have experience with OKRs.
Planview has introduced OKRs functionality into its platform so that our customers can combine goals and value delivery inside a single solution. Watch the on-demand demo to learn more.
Read Next: A Guide to OKRs: Mastering Objectives and Key Results