FAQ: What are OKRs?
What is my role responsible for?
Am I meeting expectations? Exceeding them?
What am I working towards?
As a manager, you’ll hear these questions from your team at some point or another. It’s your responsibility to answer them.
How? Give employees a roadmap to follow. Help them set goals that clearly bubble up company goals. Help them define the measures of success within their roles. Doing so will engage your employees, increase your team’s productivity, and strengthen your position as a leader.
OKRs are a great way to achieve this.
What is an OKR?
OKRs stand for Objectives and Key Results. They are used by businesses to set goals at the company, team, and individual level. They include both qualitative and quantitative goals that, together, help companies strategically move forward.
OKRs are typically set at a quarterly cadence, although they can take place over a longer or shorter period of time too.
What is the difference between an objective and key result?
An objective is qualitative. It sets a destination to work towards. A key result is quantitative. It helps you know when you’ve achieved your objective. Key results can be measured in dollars, contacts, growth percentages, or any other measurable KPIs that your company focuses on.
Here are some examples:
- Objective: Launch redesigned website
- Key Result: Increase website conversion by 10%
- Objective: Expand customer service hours from 9-5 to 8-8.
- Key Result: Successfully complete 30% more customer requests
- Objective: Hire 5 engineers and 3 product managers
- Key Result: Increase major feature launches from 3 per quarter to 4
How many objectives and key results should a company have?
Each objective should be followed by 2-5 key results.
At the highest level, a company may have one objective and 2-5 key results driving the business forward. Each department will likely have multiple objectives and key results that bubble up to the top-level objective. And each team member will likely have multiple objectives and key results that bubble up to their department’s.
I have a “to-do” list. Isn’t that enough?
A to-do list is useful, but it’s focused on day-to-day tasks. Your to-dos should be nestled under your objectives.
Here are some examples:
Objective: Open offices in three new countries by year end
To-do list: Apply for passport, post job descriptions for employees in country
Objective: Hold 3 webinars focused on acquiring new customers
- To-do list: Write script, find webinar platform
What if I reach for an objective and key result and don’t make it? Isn’t it better to create easier-to-reach OKRs?
If you can reach all your OKRs, you’ve likely made them too easy to accomplish. In fact, OKRs should have a 70% achievement rate — they should be just difficult enough to feel uncomfortable. When employees have to stretch to reach an OKR, they grow and learn in the process. Employees should know that failing to reach 100% of their ambitious goals is not expected.
Key Results? Aren’t those the numbers we set at the beginning of the year and look at in December?
If you don’t look at your key results until year-end, you’ll likely not achieve them. Key results need to be revisited weekly, monthly, quarterly.
As the team leader, here are some ways to do so:
- Check in on employees’ key results in 1:1 meetings
- Check in on team’s key results in each team meeting
- Send a regular email with the team’s progress
- Share progress on the company-level key results as often as possible
Who decides objectives and key results?
It will likely be a mix. Sometimes an executive leader will assign OKRs to teams or individuals. Sometimes, individuals will set their own OKRs.
Typically, managers will collaborate with both their leaders and their direct reports to create OKRs that are aligned across the business. All individual OKRs should bubble up to the team’s. All team OKRs should bubble up to the company’s.
Here’s an example:
- OKR: Reach 20,000 net new customers by the end of the year
- Key Result: Churn rate, onboarding rate, new customers
- OKR: Deliver 100,000 new leads to sales team by the end of the year.
- Key Result: Reach, conversion rate, new leads
Paid Performance Manager:
- OKR: Launch 3 new paid campaigns targeting users searching for the company name
- Key Result: Reach, click through rate, new leads
Who needs to know my objectives and key results?
The more transparent the better. Some company leaders choose to make top-level OKRs available for the entire company to see. This is ideal. Employees are most engaged and motivated when they understand the impact their work has on the company at large.