For the uninitiated, OKR is a goal framework is a goal setting framework used by leading tech firms to align teams and unlock growth. It stands for Objectives and Key Results.
In this article, I'm going to break down how to set your first company OKR with your executive team. First, let's start with what OKR is and where it came from, and how you can use it to your advantage.
OKR became popular in the 2000's after helping a series of high profile tech companies focus on what really matters and scale. Companies like Google, LinkedIn and Amazon. This was off the back of the insane success OKR hat at Intel. Fun fact, it was originally created to help Intel win the chip wars against Motorola!
How is it so powerful? OKR aligns teams on the biggest strategic problem to solve right now. This forms the basis of the Objective. An inspiring statement of what we want to achieve. You should only have one for the company per quarter. The success measure is actually 2-3 key results which are metrics. We can then track progress on the goal weekly using a confidence score and real measures of progress.
If you want a deeper explanation, check out my beginners guide. Now, let's talk about you set your first company OKR in only seven steps...
Step 1: Understand the Company Vision and Strategy
Before diving into OKR, you need to have a clear understanding of your company’s vision and mission. Your OKR should align with these long-term goals, ensuring that every effort made is pushing the company in the right direction.
Aligning your OKRs with your vision ensures that all teams are working towards a common purpose, maximizing their impact and staying focused on what truly matters. This alignment not only clarifies priorities but also boosts team buy in and helps them understand how their work contributes to a larger goal.
So how do you actually choose what your OKR should be?
The key is looking at your strategy and choosing the biggest strategic problem you need to solve right now. If the problem is too big to solve in a quarter, break it down into smaller problems.
Step 2: Define Clear Objectives
Again, Objectives are what you want to achieve and take a valuable slice out of your strategy. They should be specific, inspiring, and achievable. Clear objectives provide direction and help keep the team focused.
If you're having trouble wording your objective, imagine you're writing a news paper headline. It's got to be punchy and engaging. Grab people's attention.
Here are some tips for creating effective objectives:
- Be Specific: Objectives should be clear and concise, avoiding any ambiguity.
- Make it Measurable: Include quantifiable targets to track progress.
- Ensure Achievability: Set challenging but realistic goals that push the team.
- Align with Vision and strategy: Make sure objectives support the company’s long-term goals, reinforcing the overall mission and crushing that strategic problem.
- Inspiring: Make it to the point so that it acts as a battle cry.
To do this well, it's super important to also capture WHY the OKR matters and WHY it's a problem worth solving. It's often inferred, but if you really want to get focus, people need to understand it.
Now, you need to capture your Key Results!
Step 3: Establish Key Results
Key results are specific, measurable outcomes that indicate progress towards your objectives. They should be quantifiable and achievable within a set timeframe. Here are examples of key results for common business objectives:
- Increase customer satisfaction score from 70% to 85%.
- Boost website traffic from 10,000 to 15,000 visitors per month.
- Reduce customer churn rate from 5% to 3%.
These key results give you clear targets to aim for, making it easier to track progress and adapt the plan as you go (more on that in a moment). By focusing on measurable outcomes, you'll have everyone behind the plan.
A really common mistake I see is people having Projects or Initiatives as Key Results. Eg "Launch the App". You Key Results are not for this. The Key Results measure the outcome, not the todo item.
So, definitely use this opportunity to capture Initiatives which you plan to do in order to move the needle. Just don't mix the two together. You can see my templates split them out pretty clearly.
Step 4: Ensure Alignment Across Departments
The unstoppable force of OKR comes from the laser focus of everyone in the business moving in the same direction. It's insane what this can acheive. This is what I mean by alingment. This alignment ensures that everyone is working towards the same goals and that efforts are coordinated.
Here's some of my go to ways to facilitate alignment across teams and departments:
- Regular cross-departmental meetings to discuss and align goals. I like to do this at the start of a quarter with an OKR Playback, where each team shares their OKRs. It's also a good idea to have a monthly all hands to shout out progress and celebrate wins (companies don't do enough of this!).
- Shared dashboards for tracking progress and maintaining transparency.
- Collaborative goal-setting workshops do get teams across multiple departments work on the same OKR or the same initiatives.
Now you've got alignment, we need to repeat repeat repeat. I once had a boss tell me that unless people are making fun of you for saying the same thing repetitively, then you haven't said it enough. That leads us to communication...
Step 5: Communicate Set Company OKRs Clearly
Clear communication is crucial for the success of OKRs. Everyone needs to understand the OKR, why it matters and how their roles contribute to it being nailed. Tools like Slack, Trello, or dedicated OKR tools like Quantive can facilitate effective communication and tracking.
Regular updates and discussion forums for discussion keep teams informed and focused on solving the problem.
Step 6: Monitor your Company OKR Regularly and Adapt
Here's the biggest thing most teams miss. Tracking their OKR weekly. I hear the argument all the time: "Weekly is too frequent". Really? This is the biggest and most critical priority the company has right now, and we don't have time to talk about it? Get a grip.
We talk about our OKR weekly in about 15 minutes during our Weekly Exco Meeting, called the Weekly Impact Meeting. We cover these topics for each Key Result:
- What’s our confidence level in achieving this Key Result? I like to do this as a percentage (what percentage of the target do we think we'll actually hit?).
- What progress did we make last week?
- What’s our focus for the upcoming week?
- What’s blocking us from moving forward?
Your OKR Check in meetings are short and incredibly powerful. They keep the team accountable and aligned. Such a regular cadence with confidence scores forces momentum and accountability. It also enables you to collaborate and course correct.
Step 7: Celebrate Achievements and Learn from Setbacks
Most companies don't celebrate their wins. It's such a shame as it's so easy.
Remember, hitting your OKRs is a big deal. Celebrate your wins – it boosts team morale and keeps the momentum going. Even if you don't hit it, celebrate the small wins you've had along the way. As long as the team has been focusing on the OKR, progress will have been made. It's that simple.
Remember, the outcome we're looking for is making progress and creating a culture of continuous improvement. By celebrating wins and learning from setbacks, you build a resilient team that’s always getting better.
It can be as elaborate as a pizza party and awards night, but even better is a small thank you, acknowledgement and surprise gift. We do this as a Kudos activity with feedback and and random small prizes. More on that another time.
So there you have it. How to set your first OKR and get the whole business behind it.
## Access Our OKR Goal Setting Templates and Enroll in OKR Programs
Your first time setting OKR can be pretty tricky. My aim with OKR Quickstart is to make this easier and more accessible for all.
Here's a few ways you can make your OKR journey easier and more successful:
- Explore our OKR Training Courses (includes FREE training),
- Grab into my resources and templates to kickstart your OKR journey
- Jump on a call with me (Tim Newbold) to discuss the best way to start or check out my OKR Services if you're just exploring.