The Ultimate Guide to Objectives and Key Results (OKRs)

When set up and managed correctly, OKRs (Objectives and Key Results) help align teams and improve results. In such good situations, OKRs bring focus, accountability and engagement. By contrast, when OKRs are not well designed, well set-up or well managed, teams can become frustrated.  Progress can slow, and employee engagement can suffer. 

At work, it’s been shown in studies like those published in The Progress Principle that people feel more fulfilled, more inspired and all of the the things that are wrapped up in words like “highly engaged” when we are making progress on meaningful results. OKRs are an excellent tool to ensure that everyone is aligned and  understands the work that makes the biggest impact for the business - so everyone is aligned and engaged. 

This guide teaches how to craft impactful Objectives and Key Results so that they fit into a strong management framework or business operating system, so that they keep you on track toward your company vision in a way everyone can see and understand. We’ll look at how to create, install and use OKRs, and how they fit into operating rhythms and other systems to help execute on business strategy.

How OKRs Help Companies

• OKRs can tightly align teams and entire organization to focused, measurable goals that in turn, bring your company vision statement to reality

• OKRs allow everyone at all levels of the organization to see where to focus, how their efforts fit together, and what results represent success.

• OKRs help companies say “no” to things that should not be priorities in order to say “yes” to things that will create the right results.

Basic Things to Know About Objectives & Key Results

Many authors attempt to distinguish goals from objectives. This results in misunderstandings. The words “objectives” and “goals” are synonyms. In the Objectives and Key Results framework - known by the acronym OKRs - the O in OKRs stands for “Objectives”.  Objectives are statements of what you want to achieve. They are qualitative, and they typically do not focus on quantities or measurements.

“Key results” - the KR in OKRs - describe the specific desired outcomes that will quantify your objectives. They make your objective quantitative by spelling out measurable criteria for success. While OKRs are more specific than what are popularly called “SMART goals,” a good set of OKRs will meet the criteria of being “SMART” - specific, measurable, attainable, realistic*, and time bound. 

*OKRs should push you to stretch well beyond levels of comfort. They are ideally “audacious,” according to the author/investor who coined the term OKRs, John Doerr. Objectives and Key Results are best understood when they are put together in a sentence in the following format: 

{your objective} as measured by {your key result}.

Another way to state it, according to whatmatters.com is ​"I will {objective} as measured by {key results}."

OKRs vs. KPIs

Key Performance Indicators (KPIs) are numbers that are tracked to indicate the health of operations or a particular part of the business. OKRs will typically be targets that you want to see your KPIs reach. The KPI defines what you are measuring, and in this case, the OKRs address the desired value you want to achieve.

Tips for Setting Meaningful Objectives

• At any level of your organization, limit your objectives to 3 objectives or fewer. Having more objectives will dilute focus. OKRs exist to force focus.

• Ensure objectives contribute to the company mission. Tip: in Resultmaps, you see this directly in the mind map view.

• Create deliberate discomfort. Create audacious goals that force you to stretch yourself and the organization to new heights.  

• Stay achievable. While it’s important to expand your boundaries, avoid setting OKRs  that are so high people will dismiss them.  

• Be clear. Make objectives concrete enough to act on - avoid vague objectives.

• Use action words to start your objective. Examples: “launch”, “build”, “create”. 

• Focus the objectives in your OKRs on your desired result; the outcome, not activities. For example, “reduce customer response time” is better than “hire more reps;” and better still is “Improve the customer experience.” You can then make a specific reduction in response time a key result in the OKR.

• Review your drafts with your teams so they can contribute and help clarify any ambiguities. This also improves understanding and creates a sense of ownership. The more people feel they are co-creating your OKRs, the more they will be bought in and take ownership.

• Have one and only directly responsible individual for each objective and each key result. Experts from companies like Apple call this the one "Directly Responsible Individual." Even if the person who owns it needs help from others, make sure one person is the sole final accountable person. Having 2 people introduces a range of friction points and ambiguities.

Tips for Creating Your Key Results

• Create 2-5 key results per objective. Too few and you likely don’t have clarity on what you are trying to do. Too many, and you are probably not focused enough. 

• Include a date and specific measure in key results. An OKR example would have "by October 1" in your key result.

• Work to frame key results around outcomes to the extent possible. 

• You can create "binary" key results - for example, "deliver our new marketing manifesto" is something that will be either true or false.

• It's best to limit the use of binary key results to places where a measurement is difficult or impossible and you are experimenting to see whether the deliverable will help you achieve another key result or the overall objective; it can be appropriate for “an objective “Launch new website” to have a key result “Cut over to the new site by January 15”, however that same key result is likely not going to be appropriate for other marketing objectives that lend themselves to specific measures.

• Have one and only directly responsible individual for each key result. This is true even if the result requires collaboration. The one directly responsible individual is the person who makes sure proper collaboration happens.

• A key result owner can be different from the objective owner, typically in this case the key result owner reports to the objective owner.

• Limit cascading OKRs. When you create complicated hierarchies that break down from the company level to the individual level, it becomes difficult to adapt and easy to push people into doing activities that don’t produce outcomes.  It’s best to keep structures very simple - 1 or 2 levels at most.

• If your company is under 10 people, set no more than 2 OKRs sets. 

• Even large enterprises like Disney have recognized the need to keep their priorities - their objectives to a “big 3” model - no more than 3 company level objectives.  While many authors create complex OKR schemes, OKRs exist to allow everyone to align to the same set of priorities, and complicated, granular OKRs create an environment of micromanagement unless used with great skill.

Can a Team Own OKRs?

Sometimes teams or organizations go through many changes at once. This can occur when you have a fast moving company such as a tech startup, or when there are many other changes happening in your organization. In these cases, you may benefit from setting OKRs only at team levels. This means the team will collectively own the OKR(s).

Spotify is an example company that shifted from individual OKRs to team OKRs with great success. Many ResultMaps customers also use this approach to keep things simple.

In these cases:

• The team leader is the owner of the objective

• They may also own the key results, or delegate specific key results to one directly responsible individual

• In ResultMaps, you can use your Team Weekly Prioritizer (under Team Alignment tools) to report on progress, decide next steps, and solve issues together.