

10 Tips for Mastering OKRs

OKRs (or objectives and key results) are a powerful management tool that can help teams steer themselves toward more purposeful work, but getting started can be tricky. We seek advice from two experts that can help you avoid the most common OKR pitfalls.

In an ideal world, employees would all have a clear sense of how their work contributes to the organization's purpose. Every employee should know how what they do leads to the organization growing, improving, or succeeding in its mission statement. In large organizations especially, it's easy for people to feel far removed from the bottom line, no matter how productive they are. One way to close that gap is to create clear objectives and figure out ways to measure whether your team is achieving them. By putting words to your team's objectives, it forces you to think about how they advance the organization's goals. One of the most popular ways to do this is by using a practice known as OKRs.

What Are OKRs?

OKR stands for objectives and key results. It's a methodology used in business to grow an organization. At their core, OKRs are a specific way to break down a goal, such as the company's mission statement, into smaller objectives, the O. The key results (KRs) are markers that help you measure whether you met the objective. We'll get into more detail about both the O and the KRs in a moment.

OKRs have gained traction in the business world in the last decade or two after they gained popularity at Google, most notably. The concept has been around since the mid 1950s, but since they caught on at Google, people from the organization have championed the system. The result is more people want to bring OKRs into their organization, although sometimes the details of how to do it are colored by how they're done at Google.

To get some advice on writing and using OKRs that can apply to all companies, I spoke to two experts, Christina Wodtke and Seth Elliott. Wodtke is a lecturer at Stanford University, as well as a business consultant who teaches techniques to create high performing teams. She is the author of Radical Focus: Achieving Your Most Important Goals with Objectives and Key Results and The Team that Manages Itself, plus other books. Elliott is chief marketing officer of Gtmhub, software for creating, tracking, and managing OKRs. Both have experience working with organizations that are rolling out OKRs for the first time.

Here are 10 tips about OKRs I learned from them.

1. Make Sure You Have These Prerequisites

Before an organization can set objectives and key results, it needs to meet a few prerequisites:

First, you need top-level sponsorship and commitment. Someone or a group at a high level in the organization needs to believe in the value of OKRs, whether it's the C-suite or the HR team

Second, the organization as a whole needs to have a clear vision and well-defined goals. "If you don't have that locked in," Elliott said, "you shouldn't really jump onto the OKR train. Get your mission and vision locked into place because if you don't know where you're headed, it becomes quite difficult to develop OKRs."

Third, as Wodtke put it, "you have to instrument for metrics." Key results rely on data. Will you be basing your key results on revenue, page views, downloads, sign-ups, resolved bugs? "Try to think about the metrics that are critical to you. Instrument them at a base level so that when you set your OKRs in the next quarter, you'll actually have some data to work from," Wodtke said.

2. Write Qualitative 'O's and Quantitative 'KR's

Elliott says one of the most common mistakes people make in writing OKRs for the first time is misunderstanding the difference between the objectives and key results.

"Objectives are designed to be the roadmap," he says. "They should be inspirational and ideally aspirational in nature, and they should not be quantitative." Objectives say something about the direction of the team or organization.

"Key results are the metrics that let you know you've achieved that goal," Wodtke says. "Often the KRs help define 'what does the objective really mean?'"

An example of an objective is: Make a big splash in the French marketplace. If you ask yourself, "What does a 'big splash' mean?" the answer becomes your key result(s). The key result should be specific and quantifiable. An example of a good key result would be: 90 new customer sign-ups by the end of the first quarter.

3. Plan to Fail at First

When an organization first begins working with OKRs, it's normal to be bad at it for a while. Plan on failing the first few times, not in terms of meeting the objectives you set, but in terms of coming up with objectives that matter and the right key results to quantify them.

The objectives should be aspirational, but not unattainable. The key results need to be something you can measure, and it helps if you're already measuring it so that you have a baseline.

4. Run a Pilot With a Self-Sufficient Team

When asked if she had any general advice for groups setting OKRs for the first time, Wodtke said, "Go slow. Do a pilot. Definitely."

A pilot means having one team or department work on OKRs without rolling it to other parts of the organization. One reason is because you should anticipate failure at first. "A lot of people try OKRs. They do it wrong. The employees become so angry and bitter. They say, 'We're never going to do this again!' and then it takes even more work to convince them that 'now we know how to do it right,'" she said. If you run a pilot, you can learn some lessons with a smaller group to make the experience better for the next groups who adopt it. The pilot also helps you figure out how setting and measuring OKRs fits in with the company culture.

So which team should you choose for a pilot? Wodtke suggested picking a self-sufficient team. "If you have self-sufficient teams—and by that I mean they have dedicated resources and they're trying to make something happen, like produce a product—those are the best people to start with while you're trying to figure out how OKRs are going to work within your culture. Then after they have been successful, you can look at doing a company-wide one or rolling it out to other departments."

5. Not Everyone Needs OKRs

The point of a pilot is to try out OKRs with one team and then maybe roll out the program to others. With that in mind, not every team or person needs OKRs. Some might only do it once the concept is firmly established in the organization. Some might never do it.

Certain kinds of teams—Wodtke calls them service groups—have a harder time than others coming up with objectives and key results. Take for example a financial or legal department of a large product company. For them, success could be defined as doing business as usual. They might not necessarily have a role in growing or stretching the company's ambitions. If these departments have areas they want to improve, that's another story, and then OKRs might make sense.

Wodtke also noted that designers and engineers also struggle with OKRs because, in many organizations, they don't own their own time. They essentially work in service to other departments. "I recommend looking at the higher level OKRs and say 'Considering who I am and what my team's job is, how am I doing to move those numbers?' That can become your own OKR," she said. "If you don't own your time, try not to do OKRs until the company has gotten good at it because then you have an internal sense of the rhythm, what you can do, what you can't do, what it takes."

6. Don't Do OKRs for OKRs' Sake

If not every team needs OKRs, then it certainly doesn't make sense to force everyone to get on board with them. There is no need to roll them out to every team for uniformity.

"Mandating OKRs is probably counter-productive," Elliott said. "If we blanket across an organization and say 'every single person must have OKRs' or 'every single team must have OKRs,' you may defeat the purpose. You end up with people writing OKRs for the sake of writing OKRs."

7. Put Off Individual OKRs (Perhaps Indefinitely)

We've already established that it's best to run a small pilot for OKRs before spreading them across an organization. When you are ready to use them in more areas of a company, should you drill down to setting OKRs at the level of an individual?

Wodtke recommended "putting them off as long as possible, and perhaps forever." The problem, she said, is that they "often get confused as a way to control individuals."

"OKRs are designed to change from control-and-command to empowered teams," Wodtke said. "If you want to control what everybody is doing, then OKRs are not for you. Don't even bother. If you want to micromanage everybody, don't do OKRs." When used correctly, OKRs tap into a team's brilliance, point them in the right direction, and set them free.

8. Never Tie OKRs to Performance Reviews

Related to the point above, never tie OKRs to performance reviews. Doing so incentivizes sand-bagging the OKRs. In other words, people set objectives and results that they know they can reach, rather than thinking aspirationally. There is dedicated software that can help with employee performance management.

Elliott added that OKRs simply aren't designed to be tied to performance reviews. "You get into this vicious cycle where OKRs don't become the element that stretches the company and moves it toward acceleration," he said.

Wodtke noted that performance reviews should be based on what people did do, not what they didn't achieve. "If they didn't achieve their OKRs, but they got some amazing stuff done, then they should be properly compensated," she said.

9. Monitor Progress Regularly

In the 1990s, the inventor Ron Popeil earned fame as a marketing genius for coming up with the slogan for his at-home rotisserie oven, "Set it and forget it."

Don't "set and forget" your OKRs. "OKRs are dynamic," Elliott said. "They require regular review and monitoring to determine progress."

When people get good at writing OKRs, they may fall into the trap of only evaluating their success at the end of a quarter. "Key results should be evaluated, perhaps not at the company level but certainly at the manager level, on a fairly regular basis, ideally weekly," Elliott said.

10. You Are Not Google

Many people today know about OKRs because they were implemented at Google, and much has been written about it. People coming out of Google have shared in great detail how teams at Google set OKRs, how many they write, what constitutes success, how often they measure and review their progress, and so forth. When you read up on OKRs casually, you'll find all kinds of rules about reaching a 70 percent success rate or always writing between three and five KRs. Most of that comes from Google.

Your organization is not Google. The way you write and track your OKRs must be unique to your organization, company culture, and business. Wodtke mentioned that not all businesses run at the same speed, and therefore writing OKRs quarterly doesn't always make sense. Biotech companies, for example, tend to work on a much longer time scale. Their objectives might require a full year or more, so she asks companies to implement quarterly milestones to help them use OKRs more effectively. At the end of the quarter, where should the project be?

She warns not to move too fast either. When organizations want to change their OKRs every two weeks, she tells them "no because that means you don't have a big enough goal, or you have habits instead of key results." Getting the pace right for your group and your business takes time.

The Road to OKRs

OKRs can shape a business into being more effective. They empower teams to set objectives that are attainable yet ambitious. When OKRs are transparent, they can also help all the teams within a large organization align their efforts better. The process of using OKRs steers people to think more about how they are contributing to the organization's purpose.

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