OKRs are Objectives and Key Results. They connect organisation, team, and individual objectives to achieve measurable results by having everyone work together towards a unified direction
If an Objective is what we want to achieve, then Key Results are the measure of how we achieve it.
Example
Objective: Deliver sustainable revenue growth
Key Result 1: An increase in monthly sales from 6000 to 7000 units
Key Result 2: An increase in the number of service plans sold from 100 per month to 150 per month
The Objective tells you the goal you're trying to achieve - and should be inspirational by nature.
The Key Results are a way of making that goal tangible - they are the measurable outcomes that tell you if you're making progress towards your goal.
Objectives are written to be achieved within a specific timeframe or period specified by your organisation.
This is likely to be quarterly for individual and team objectives, and yearly for organisation objectives.
Objectives are:
- A qualitative way to describe what you want to achieve
- Designed to motivate and should be brief and inspirational
- Comprised of 1-5 Key Results
- Finite
- Timebound
Key Results are:
- Quantitative; metrics that measure your progress towards an Objective
- Measurable actions
- Value-based and not activity-based
- Not a set of daily or weekly tasks
The most effective Key Results are based on the outcome of an activity rather than an activity itself.
Value-based Key Results measure the outcome of successful activities.
The most effective key results are Value-based.
If OKRs are a measure of success then Key Results must be value-based and not activity-based because if you complete all your planned activity and nothing improves, that is not success.
Some OKR Terminology
Aspirational objectives are referred to as moonshots that are designed to stretch you further; yet written in the knowledge you will likely achieve 60 -70% of the objective within the period.
Committed objectives are necessary and required to be achieved in full (100%) within the period.
OKRs below the organisation OKRs can be either top-down or bottom-up. Organisations will usually have a mix of both.
Top down OKRs
These are typically derived from the Key Results of the level above. This means that the upper-level Key Result becomes the Objective of the next level down.
Bottom up OKRs
These are created by teams looking at other higher level OKRs (including the Organisation OKRs) and deciding how they as a team can best contribute to that higher level OKR. The team will write their OKR from that premise.
OKR Alignment
It is encouraged to seek alignment with OKRs to help reduce or break down silos. This means looking at how one team's OKRs align or contribute to other teams’ OKRs. This alignment can take place in any direction within the organisation.
If you wish to significantly increase collaboration between teams in different departments or functions, you can create a mutual Objective for separate teams and then each team creates their own Key Results that contribute to the same Objective.