Introduction
Objective and Key Results (OKRs) were first implemented by Andy Grove at Intel in the 1970s. John Doerr, who had worked at Intel, brought OKRs to Google in 1999, where they helped fuel massive growth and raise employee morale. Since then, OKRs have become the choice goal-setting method for digital natives and traditional businesses undergoing a digital transformation.
Perhaps the most alluring aspect of OKRs is that they promise to connect technical activities to business outcomes. If done correctly, OKRs can drive a value-focus and show every employee how their work contributes to the success of the business.
Learn 3 Ways to Engage and Accelerate IT OKRs and VSM
OKRs should be designed so that every team’s activities can be traced up to the company’s vision. This is easier said than done, so we’ve designed three sets of OKRs examples for software companies to show how it’s possible. In these examples, the product value streams incorporate Flow Metrics into their key results to drive agility and a value focus. The OKRs at the value stream level support those of the department, which in turn feed into the overall goals of the organization.
Breaking Down an Effective OKR
Before reading the examples, here’s a reminder on how an OKR should be written, as explained by Felipe Castro:
- Begin with the end in mind; what do you want to achieve? This is your Objective.
- Use precise, actionable language to describe the measurable beneficial effects achieving this objective will have on your customers, your company, or your employees. These are your Key Results.
- Engage in activities that will help you achieve the key results. Activities can be experimental and don’t have to be defined too specifically. Don’t confuse the activities with the key results.
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A Note on Scaling OKRs
The key results for any given team or department need to be things they could actually impact. For instance, let’s say an organization wants to improve customer retention. An engineering team’s key results should NOT relate directly to customer retention. There are so many factors that impact retention, so an improvement in retention wouldn’t tell you how well the engineering team did. Instead, key results should reflect something in the engineering team’s control, like the speed or quality of the product.
Examples of Quarterly OKRs For Software Companies
Example 1: OKR for a financial services company
Objective | Key Results | Activities | |
For the Organization | Improve customer online experience without increasing their fees | • NPS >40 • Reduce Opex by $XM • Close X% of physical branches • Increase digital business by X% | • Create and launch NPS survey about UX • Issue RFP for CXM replacement • Launch awareness campaign for digital services |
For the Digital Channels Product Portfolio | Increase adoption of digital channels | • Increase mobile app transactions from X% to Y% • Increase online banking activity by Z% • Increase NPS scores for digital channels from X to Y | • Add transactional services to digital channels • Introduce spending reports and credit scores • Implement chatbot to assist with online transactions |
For the Mobile App | Achieve feature parity between mobile app and website | • Reduce Flow Time for features by X%, from X to Y • Increase feature Flow Distribution to >40% • Improve mobile app response times from X to Y | • Deliver Q3 roadmap items • Refactor the build to release faster • Optimize mobile app performance. For example, reduce the number of queries between the front and backend server |
Example 2: OKR for a telecommunications company
Objective | Key Results | Activities | |
For the Organization | Improve our standing in the Gallup’s 100 Best Places to Work list | • Employee retention >X% • eNPS >50 • Referrals increase from X to Y | • Introduce quarterly recharge days • Pilot no-meeting-Fridays • Launch a mentorship program • Improve benefits |
For the Technology Solutions department | Improve ways of working by focusing on making processes more efficient | • Increase percentage of products able to release on demand from X% to Y% • Increase deployment frequency from X to Y • Shorten handover from Systems Engineers to Software Developers by X% | • Improve change approval board process to support release-when-ready • Introduce an integration between dev and test to eliminate manual duplicate data entry |
For the Data Portal | Reduce burnout | • Reduce WIP and maintain a stable Flow Load at X • Target 20% Flow Distribution to Debt items • Team eNPS score >50 • Reduce new engineer onboarding time from X to Y | • Experiment with test environment self-service • Improve turnaround times within the team for code reviews • Implement feature flagging so each product can release new capabilities at their own pace |
Example 3: OKR for a health insurance provider
Objective | Key Results | Activities | |
For the Organization | Improve clinical and financial outcomes for healthcare payers, providers, and patients | • Reduce medical errors by 5% • Improve Net Collection Rate by X% | • Map patient experience to understand where more information around financial options is necessary • Define new payment plans and options for patients • Create an AI center of excellence • Create a thought-leadership program at the industry level |
For the Product Development Department | Our products maximize payment speed and accuracy to providers and streamline the process for patients | • Process 60% of claims within 3 days • Reduce number of claims requiring rework by 25% • Achieve NPS score of 40 or higher for healthcare providers • >80% of patients use portal to complete insurance documentation | • Incorporate AI into 50% of products • Conduct X interviews with patients to gain feedback on portal • Improve chat bot • Optimize patient portal for mobile • Add 3 new insurance provider integrations |
For the Platform | We put the safety and security of our patient and financial data above all else | • 99.99% Up-time • Escaped defect rate <5% • Reduce feature Flow Time by 10% • Risk work is minimum 20% of Flow Distribution • Flow Time for P1 Risk items is <24 hours | • Achieve SOC2 type II Compliance • Introduce new security features for the cloud • Introduce automation for frequent compliance testing • Adopt a security by design approach • Expand number of test use cases |
We hope these examples gave you a better idea of how to bring OKRs into your own business. Finally, always remember that the most effective OKRs are created collaboratively, with executives, managers and teams all brainstorming ways they could contribute to the company’s goals.
