Index
- What is OKR?
- Why is OKR important?
- Types of OKR: Team, Individual
- How to write OKR?
- Popular OKR Templates
- Do’s and Don’ts for OKRs
- OKRs FAQ
What is OKR?
“A person without an aim is like a ship without a compass”
Anonymous
OKR is short for “Objective and Key results”. OKR is a management technique focused on defining goals and expected results over a time period. It helps the organization to track the progress, evaluate the performance and better align the team for common goals.
Components of OKR
Objective: The objective is the well-defined goal, the organization wants to achieve over a period of time.
Key Result: Key results are like specific results which if achieved will help the organization to achieve the corresponding objective.
Owner: Owners of the OKR are people responsible for achieving the OKR.
Period: OKRs are time bound and therefore the time period must be defined. OKRs can be for a specific quarter, semester, or year.
Real-life examples of OKR
In this section, we will discuss some real-life OKR examples to better understand what OKRs look like.
Example 1
Let’s consider that we want to lose some weight. To achieve so we want to use the OKR framework. Following is how we will design the OKR for this goal.
Objective: To reduce body weight by 5kg from 80kg to 75kg in 1 month.
Key Result 1: Reduce daily calorie intake to a total of 2200 calories.
Key Result 2: Running at least 3 times a week.
Key Result 3: Drink at least 1.5l of water every day.
In the example above, our objective defines a very specific goal of losing 5kg of body weight in the given time period, which is 1 month. We should follow the SMART goal-setting criteria to define the objective. We will discuss this later section about how to draft OKRs. Once the objective is defined, we consider how we can break down this objective into certain key results which we have to obtain. Key results should be specific and achievable. In the above example, we did our research and found ways to reduce body weight. We then created these 3 key results criteria which if met will definitely help us lose 5kg of body weight.
Example 2
Let’s consider a product this time. Let’s consider the case of the Instagram app. Instagram is trying to compete with Tiktok in short video format content. They have the “Instagram Reels” feature to compete with Tiktok. So this is an example of OKR they can have for their quarter :
Objective: To increase the average “percentage time spent” on Instagram Reels from 10% to 30% of the total time spent on Instagram in the next 6 months.
Key Result 1: Introduce reel suggestions in feeds.
Key Result 2: Design interface for continuous binge-watching of reels only content.
Key Result 3: Incentivise Reels creator: Creator tools
In the example above, Instagram’s strategy is to promote its short video format content over other formats. Therefore, they want to increase the percentage of time spent on reels sacrificing the time spent on other types of content. The objective is very specific and has to be achieved in a time period of 6 months. Here the objective reflects the overall strategy of Instagram to pivot to video-based content in the future. Now for the key results, we have identified 3 key steps which will help the Instagram team to achieve its goals. KR1: Introducing reel suggestions in the Instagram feed will introduce it to the users who are not already aware of the “Instagram Reels”. KR2: sustaining users with a good interface, so that they can enjoy reel content continuously will help them to spend more time on reels. This KR is designed to avoid users digressing from reels to any other kind of content. And the final KR3 is designed to incentivize creators to produce quality content over Instagram, rather than going to competitors like Tiktok. It can include providing them with better tools and features to edit the videos, add music, etc.
Example 3
For the third and final example, we will consider the case of the HR Team. Consider that the HR Team has been planning some socializing events in the office. However, due to the pandemic and recent work behavior change, the attendance of these socializing events is around 30%. The HR team wants to build a better-connected team via these events and figured out that if more people attend these events, then it will lead to better team dynamics. Following is the OKR they came up with:
Objective: To increase the average number of people attending office events from 30% to 60% of the total employees in the office in the next 3 months.
Key Result 1: Introduce pre-event surveys.
Key Result 2: Increase the food budget by 30% and decrease the decoration budget by 10%.
Key Result 3: Introduce team events and games.
Key Result 4: Individual acknowledgments/ appreciations
In the example above, the HR team has the strategy of building a better-connected team. Aligned with this strategy they want to increase the attendance of the socializing events they organize. HR Team came up with the objective of increasing the percentage of the number of people attending the event from 30% to 60% in the specific period of the next 3 months. As again, we can see the objective is very specific and well-defined for a specific period. To achieve the objective, the HR team came up with very fun ideas as Key results. KR 1 focuses on considering all the people to decide the best-suited date, time, location, and theme of the event. This way everyone can be comfortable attending them. KR2 aims to increase the food budget. The HR team must have discovered that people were disappointed by the food in the past and no one noticed the extravagant spending on the decorations. Therefore this approach needs to be tested to measure the delight of customers, KR3 aims to bring a collaborative and social element to the event. This will ensure people encourage their teammates to come to the events for the event’s sake also. And finally, the last KR4 is about acknowledging people in the event and providing them a sense of belonging in the organization.
Why is OKR important or Why to use OKR?
OKR is one of the most important frameworks in businesses for the following reasons :
OKR is a systematic approach to following an overall strategy.
Usually, organizations have short and long-term strategies. It is difficult to break down these strategies into smaller parts and manage them within the team. OKRs help to break down these strategies into perceivable frameworks which are easy to understand and act upon. Let’s understand this with help of another example.
Example
Consider Apple’s long-term strategy to add more and more people to their ecosystem. Now, this is a very good strategy that will help them to push new products to their existing customers at lower marketing costs and even make recurring revenue by selling subscription services like Apple Music. However, this strategy itself is not very clear about how the company is going to do that. Therefore the company can break down this further into quarterly or half yearly (semesterly) OKRs. For example, the OKR can look like this:
Objective: To include sports athletes and pro players in the Apple Ecosystem capturing at least 10% market share of professional sports measurement and analysis equipment.
Key Result 1: To build features in the apple watch for popular sports like soccer, badminton, field hockey, and basketball.
Key Result 2: To enable sports athletes to compete with each other and track progress.
Key Result 3: To improve brand association with sports by doing strategic partnerships with sports brands like Nike, and Adidas.
In the example, we can clearly see how Apple breaks down its long-term strategy into more perceivable OKR targetting one demographic to add more and more users to their ecosystem.
With OKR it is easy to communicate the goal to the entire team
OKRs are fairly simple to communicate with each and every member of the team. While aligning everyone in the team with long-term strategy and vision is difficult, it is much easier to communicate these short-term goals with key results. Team leaders can finalize the OKR and communicate effectively why they are taking certain actions and how it will help them to achieve OKR.
It is easy to track progress with OKR
OKRs are a great way to track progress. It is fairly simple to see break down the progress of the entire goal, by considering the progress on individual key results.