OKR’s secret sauce

The history of the goal-setting framework called OKRs — which stands for Objectives and Key Results — has become legendary because Google chose to set goals when it was a few people, not the 130,000+ employees it is today.

In case you’re wondering, Google still uses OKRs to set goals. Now if you are a start-up, scale-up or a more traditional sector like a retailer or bank, you probably use OKR or will consider using the framework to set goals soon.

Why is the framework so popular? The first reason is simple. There are only two things you need to know about how to create. A goal and a key result. There are also some guiding principles to consider when creating them, and in those guides is where the secret lies.

OKR basics

But first, let’s start with Objectives and Key Results. To write a goal, all you have to do is positively describe what you want to achieve and why. For example, a company OKR could look like this:

Plannable and sustainable sales growth

You then suggest how you want to measure success, ideally using metrics rather than tasks. This OKR could then look like this:

Plannable and sustainable sales growth

  • Increase revenue by 100% year over year
  • Customer satisfaction is 90% or more

Other teams can then discuss these and other company OKRs and suggest how they could support this goal achievement with their own OKRs. For example, marketing might suggest:

Expand the base of repeat customers so sales are predictable

  • Increase the percentage of customers who shop weekly from 35% to 50%
  • The average order value increases from $35 to $45

How these goals are to be achieved is the aim of the initiatives. Imagine that marketing got together and went through their backlog of things they want to do in addition to brainstorming things they could do. The initiatives they agree on are:

  • Test predictive analytics on sent emails with products that customers might buy
  • Suggestions for building test baskets
  • Thresholds for test vouchers form basket sizes
  • Try free shipping on orders from X

When each of these tasks is completed, the team knows the impact of their hard work.

The secret OKR sauce

Having goals that have important metrics is obviously a smart idea. What was not clear from the examples above was that each of the goals used was deliberately set as “hard” and far-fetched. Hard goals create focus, prolong effort, and stimulate ideas and collaboration.

Goals that are easy to achieve are not. But don’t worry, 100% performance is not expected either. Depending on how hard the goal was, 70% might be a remarkable achievement and 100% would be amazing.

The next thing to note is that OKRs, when done well, don’t include business-as-usual goals. Marketing tracks many metrics and works on many activities including posting on social media and updating the website.

These are not OKRs, they are not priorities and goals for significant improvements in the next quarter. OKRs provide clarity about the few things that will make the biggest impact and create the commitment to achieve them.

How was clarity created? Through discussions within teams and with other teams in cross-functional planning sessions. During these conversations, debates, and argumentation teams if necessary, teams can share, explain, and agree on what matters most, where resources can come from, and who should work on what. Goal, role and plan clarity is achieved through discussions.

Like most other goals, are OKRs set and forgotten? No, they are checked in and discussed weekly. Progress is shared along with plans for the coming week and any issues. Teams are agile and empowered enough to adapt to change and opportunity. If management wants to know how OKRs are progressing and what is being done to achieve them, it is plain for all to see. In fact, transparency is another pillar of OKRs that employees love.

bring everything together

Then, when you bring the obvious and the secret together, you find yourself with a path:

  • Express your priorities and measure whether you have achieved them
  • Encourage ambition and make failure safe
  • Empower teams to discuss priorities, share ideas and collaborate
  • Processes to keep teams focused on target outcomes and initiative execution
  • A way that allows the entire organization to see what other teams are working toward, how their work is helping, and how they can help

You’ll have a hard time doing this if you’re using KPIs or SMART goals as a point of comparison.

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