OKR, which stands for “objectives and key results,” is a framework organizations use to set goals and plan how they will meet them. Objectives are detailed achievements or aspirations, and key results are the specific tasks employees must complete to reach their objectives.
OKR Definition
Objectives and key results (OKRs) serve as a framework for setting and achieving goals that are ambitious but still measurable. Through OKRs, teams understand what actions are needed to accomplish a goal and can keep track of their progress.
As a leader, your role isn’t just to pass OKRs on to your team, but to help your team understand their value, and see themselves as crucial players in your company’s overarching wins. Even if core OKRs come from the top down, it’s still worthwhile to talk them through with your employees, and leave space for their input — they may have ideas that can help you reach them even faster. Either way, OKRs are more than just a way to reach a company checkpoint. They also help your team become stronger.
What Is an OKR?
Invented by Intel CEO Andy Grove, OKRs (“objectives and key results”) are a tool for organizing workplace goals. An objective is a specific goal, and the key results are the tasks that must be completed to reach that objective.
Let’s say your company makes luxury soap. Your big dream is to become a household name, but so far, you’ve only been able to get your product sold at a few local boutiques. To get closer to your dream, you could create OKRs.
Objective: Build a successful e-commerce site and market your products to customers nationwide.
Key Results:
- Create a shopping cart tool.
- Use SEO keyword research to help your site traffic.
- Build a social media presence where you can launch a digital marketing campaign.
Defining OKRs
To properly apply OKRs, it’s important to understand how objectives and key results complement each other to complete this framework.
Objectives
Objectives are clear-cut goals that define what you want to accomplish. These are often achieved on a team or organizational level.
Examples of Objectives
- Having a website rank number one for an industry-related keyword.
- Achieving the most sales in a fiscal year in an organization’s history.
- Lowering a company’s emissions to become carbon neutral.
Key Results
Key results are concrete outcomes that measure whether you’re progressing toward completing an objective. While key results can be ambitious, they must remain realistic and specific.
Examples of Key Results
- Publish 20 articles within three months targeting specific keywords.
- Cold-call 50 prospective clients per month to generate leads.
- Convert four company facilities to solely electric power within one year.
OKR Examples
Here are a few additional examples to show what OKRs look like in action.
Marketing OKR Example
Objective: Gain 10,000 new subscribers to the marketing newsletter within six months.
Key Results:
- Reach out to 25,000 prospective customers advertising the newsletter.
- Offer one promotion or deal per month through the newsletter.
- Send the newsletter two times per month instead of just once.
Customer Service OKR Example
Objective: Earn a majority of five-star reviews from customers by the end of the year.
Key Results:
- Hire and onboard 50 new customer service reps to handle larger call volumes.
- Schedule two team-wide trainings per month to improve reps’ conversational skills.
- Email a feedback survey to every customer within 30 minutes of each call ending.
Human Resources OKR Example
Objective: Double the number of employees from marginalized backgrounds within two years.
Key Results:
- Interview at least three Black candidates for every open position.
- Hold one training per week educating HR members on unconscious biases.
- Partner with two organizations within three months that promote hiring women in tech.
Benefits of OKRs
John Doerr — a proponent of OKRs who was taught the framework by Andy Grove — sums up the benefits of OKRs with the acronym FACTS.
Focus
An objective only needs several key results to be effective. With a short list of clear goals, teams can understand what needs to be achieved and organize their time and energy accordingly.
“Don’t set too many key results. Two or three should be more than enough to fulfill your objective,” Helen Virt, head of business development at dating app Taimi, told Built In. “Multitasking wears your brain off and doesn’t let you focus, so having too many key results means some of them will probably get left behind.”
Alignment
OKRs enable companies to align the goals of each team with larger organizational goals and values. This way, all employees are headed in the same direction and realize how their work contributes to the company’s broader mission.
“Each team member’s OKRs should roll up to the company’s overall objectives and pursuits,” Allan Wintersieck, co-founder and CTO of software company Devetry, told Built In. “That way, everyone on your team is pulling in the same direction and as a result, your company can create larger, more impactful initiatives.”
Commitment
OKRs clarify to employees what needs to be completed and hold everyone accountable for meeting specific goals. Setting OKRs on a regular basis can help employees determine what tasks to prioritize.
“I find setting OKRs quarterly gives a reasonable time frame,” Wintersieck said. “Any shorter, and your team will spend more time figuring out what their goals should be rather than pursuing them. Any longer and your team will likely set their OKRs aside in pursuit of more pressing issues.”
Tracking
With OKRs, company leaders and managers can constantly gauge whether employees are getting closer to achieving a goal. Holding regular meetings for OKR progress updates is a good way to keep track of teams’ progress and decide if adjustments are needed.
“Once the correct objective and key results are identified, it becomes clear and easy to track progress,” Caitlin Collins, principal implementation consultant at enterprise software company Betterworks, told Built In. “Your key results should be measurable and specific to enable you or your team to regularly provide progress updates.”
Stretching
OKRs encourage teams to push beyond the status quo and pursue more challenging goals. It’s OK and even expected for teams to fall short of these goals, but they now have a new standard to strive for moving forward.
“Performance issues and not reaching goals are not the same thing. You have to expect that if your team didn’t achieve their OKRs there is a good reason for it,” Wintersieck said. “You’ve got to trust your team.”
OKRs vs. KPIs
OKRs and key performance indicators (KPIs) are related, but distinct frameworks. To understand which one is best for your business, there are a few differences to consider between OKRs and KPIs:
- Definition: OKRs are concrete goals that include metrics; KPIs are standalone metrics or numbers used to track company goals.
- Basis: OKRs are based on more aspirational goals and company missions; KPIs are rooted more in past results and current initiatives.
- Metrics: OKRs measure more ambitious, mission-related goals; KPIs measure specific benchmarks and steadiness.
- Purpose: OKRs are used to motivate employees to go beyond the status quo; KPIs are used to evaluate performance.
- Duration: OKRs are often established on a quarterly or yearly basis; KPIs are followed on a constant basis.
- Variation: OKRs can change between or even within quarterly or yearly cycles; KPIs are more consistent from quarter to quarter or year to year.
Frequently Asked Questions
What’s the difference between OKR and KPI?
OKRs are a framework for achieving more ambitious goals and include metrics for tracking progress. KPIs are standalone metrics or numbers used to evaluate performance. As a result, OKRs motivate employees to pursue more aspirational, mission-related goals while KPIs strictly evaluate performance using past and current results.
What are OKR examples?
Say your business has the objective of hosting the most-visited site in the fashion industry. The following could be key results for completing this objective:
- Publish one blog article per week targeting the keyword “top fashion products.”
- Reach out to 100 prospective customers per month via the company’s Instagram account with links to product pages.
- Expand the online product list to include 50 different shoes and 75 different dresses within six months.
What’s an example of a measurable key result?
Consider the objective, “Improve customer satisfaction.” A key result for this objective could be, “Respond within one hour each time a customer submits an email query or complaint.”
