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The OKR
Essentials Guide

Whether you're new to OKRs or looking to deepen your understanding, this guide has got you covered. Let's get started!

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Introduction

Introduction

Welcome to our OKR Getting Started Guide, your go-to source for learning about Objectives and Key Results (OKRs). Our expert guidance and resources will help your organization gain a deep understanding of how the OKR framework can drive outcome-focused thinking and improve clarity, alignment, and focus. By aligning everyone around common objectives and providing clear guidance on how each individual contributes to achieving them, you'll be well on your way to achieving unprecedented success. By aligning everyone around common objectives and providing clear guidance on how each individual contributes to achieving them, you'll be well on your way to achieving unprecedented success.

Join us as we delve into the world of OKRs and uncover the foundations of this powerful tool for organizational transformation.

The Origins of OKRs

The Origins of OKRs - Flashback to the 1970s

The origins of the OKR framework can be traced back to Peter Drucker's concept of Management by Objectives (MBO), which he introduced in his 1954 book "The Practice of Management". MBO was a way to align an organization's goals with individual performance, and it involved setting specific, measurable objectives for each employee.

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In the late 1970s, Andy Grove, then CEO of Intel, developed the OKR framework as a way to improve upon MBO. He believed that MBO lacked focus on outcomes and did not provide clear guidance on how individuals could contribute to achieving organizational goals. The OKR framework consists of setting objectives that are specific, measurable, and time-bound, along with key results that help measure progress towards those objectives.

John Doerr, a former Intel employee who worked closely with Grove, later introduced OKRs at Google in 1999. The company quickly adopted the methodology and continues to use it today as a core part of their culture.

Since then, OKRs have gained popularity across various industries as a way to drive strategic planning and execution. Many organizations have found success using the framework to increase alignment and accountability across their teams.

As businesses continue to face new challenges and opportunities in today's fast-paced environment, it's no surprise that more companies are turning to OKRs as a way to stay focused on what matters most. With its roots in proven management principles and a track record of success at leading companies like Google and Intel, the OKR framework is sure to remain popular for years to come.

The OKR Framework Defined

The OKR Framework Defined

If you get introduced to Objectives & Key Results through a resource such as Measure What Matters, you'll learn that OKRs are a collaborative goal-setting methodology used by teams and individuals to set challenging, ambitious goals with measurable results. OKRs are how you track progress, create alignment, and encourage engagement around goals or ambitious objectives.

At Scaled OKRs, we believe that definition is too narrow to represent the true power of the OKR framework. Yes, it is true that OKRs are a collaborative goal-setting methodology and yes, it is true that teams and individuals can use them and benefit from them. We believe OKRs can achieve so much more for an organization, so we introduce and describe the OKR framework this way:

 

OKRs are a strategy and alignment framework that seeks to ensure organizational clarity by creating an environment of common goals and shared commitments.

 

We believe that definition points organizations in the right direction with OKRs. Once you understand the framework definition for OKRs that we described above, then it's time to understand the mechanics of OKRs.

Creating Powerful Objectives

An Objective is a declaration of purpose and aspiration, indicating the destination that an organization or team aims to reach. Company objectives are intended to define the desired outcome rather than outlining the specific steps that will be taken to achieve it.

Make these attributes true for your
POWERFUL objectives!

  • Inspirational: Objectives should inspire and motivate individuals to work towards a common goal.

  • Attainable: Objectives should be challenging yet achievable within the given timeframe.

  • Concrete: Objectives should use language that everyone understands.

  • Timebound: Objectives should have a clear timebox completion.

  • Action-oriented: Objective statements should inspiration ideas and action!

  • Qualitative: Objectives describe an outcome in a descriptive rather than measurable way.

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By focusing on those qualities or attributes, you can create objective statements that are aligned with your company's strategy, motivate your team or organization to achieve their goals, and ultimately drive success through OKRs.

Let's look at some examples:

  • Become a recognized industry leader in sustainable business practices.

  • Create a company culture that prioritizes work-life balance, employee well-being, and personal growth.

  • Build a brand that is synonymous with exceptional customer service.

  • Foster a culture and environment where employees take risks, experiment with new ideas and challenge the status quo.

  • Develop a reputation as the leader in customer service by our clients.

  • Become the global leader in our market segment

Write objectives that invite lots of ideas, rather than including the solution in the objective statement.

 

For example, "Create a world-class customer service experience by reducing wait time on support calls."

 

Although that objective satisfies the requirement for being aspirational, it limits that aspiration to the scope of improving the wait time on support calls and nothing more. Don't limit your objective statements by including the how in the statement itself.

Creating Effective and Measurable Key Results

Key Results are specific, measurable outcomes that are used to track progress toward achieving the Objective. They help to clarify what success looks like for each Objective and provide a way to measure progress. Key Results should be ambitious yet achievable and directly tied to the overall success of the company or team. By regularly tracking progress against Key Results, teams can quickly identify areas where they are falling short and adjust their strategy accordingly. Ultimately, Key Results serve as a roadmap for achieving Objectives and driving meaningful results for the organization.

Make these attributes true for your
AWESOME key results!

  • Aligned: Key Results should support the organization's mission and contribute to achieving the Objective.

  • Aggressive: Key Results should be challenging yet achievable to drive significant progress.

  • Behavior & Conduct: Key Results should encourage positive behavior and collaboration within the team.

  • Ownership: Key Results should be owned by a specific individual or team for accountability and focus.

  • Verifiable: Key Results should be objectively verifiable through data or other measures.

  • Quantitative: Key results should be measurable using quantitative metrics for clear tracking of progress.

By focusing on those attributes, you can define key results that inspire action, stretch your organization to reach new levels of success, and gain the ability to evaluate outcomes with unambiguous measures.

Let's look at some examples:

  • Key Result:

    • Good: Increase website sales by 30%

    • Bad: Achieve 10,000 monthly website visitors by the end of Q3.

  • Key Result:

    • Good: Achieve a Net Promoter Score (NPS) of 8 or higher

    • Bad: Increase our NPS score by providing better customer service

  • Key Result:

    • Good: Generate $2,500,000 in revenue from the new product line

    • Bad: Get 1,000 new customers to register on the website

  • Key Result:

    • ​Good: Reduce the footprint of our IT infrastructure by 50%

    • Bad: Move all servers to the cloud

Be sure to evaluate that your key results are not inspiring the wrong behaviors.

 

For example, a key result such as "Reduce costs by 25%" might seem like a reasonable key result to aim for. However, what if the organization responds by finding ways to reduce staff by 25%, thus reducing your organization's capacity to produce value? When the real spirit of the key result was to improve efficiency and reduce wasteful activity. Because the key result was too broad it didn't provide the clarity needed to support the key result correctly. In situations like that, define a balancing key result or add sufficient detail to the key result itself.

Improving Alignment

Improving Alignment with OKRs

Organizational alignment is a critical element of success in any business. When teams are not aligned, they can work on opposing priorities, duplicate efforts, and waste valuable resources. To address this challenge, the OKR framework includes the notion of "cascading", which can be leveraged to improve both vertical and horizontal alignment within the organization.

The idea of cascading vertically means that strategic objectives set by senior leadership can be translated into tactical objectives for individual teams or departments. By cascading OKRs in this way, everyone in the organization has a clear understanding of how their work contributes to the overall success of the company.

In addition to improving vertical alignment, OKRs also invite the opportunity to improve horizontal alignment by creating shared OKRs that cut across departments. For example, if one department sets an objective related to customer satisfaction while another department sets an objective related to product quality, there may be opportunities for these teams to collaborate on shared objectives that benefit both areas.

By aligning organizational goals through OKRs, companies can ensure everyone is working towards common objectives and efficiently allocate resources. With clear goals and measurable results established across multiple levels of an organization, employees are empowered with focus and direction leading ultimately to more productive outcomes for both employees and businesses alike.

Alignment is Achieved Through Collaboration, not Mandates

Vertical and horizontal alignment are essential for any organization to achieve its goals. Vertical alignment ensures that the strategic objectives set by senior leadership are translated into tactical objectives for every team or department, while horizontal alignment ensures that teams collaborate towards common goals. Achieving both vertical and horizontal alignment requires collaboration among team members at different levels of the organization, which ultimately leads to greater efficiency, productivity, and success.

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Cascading done wrong can lead to bigger problems

One way that organizations get cascading wrong is when they dictate to lower levels of the organization what their Objectives need to be. This is often done by saying the key result at the higher level becomes the objective for the next level down. This approach to cascading generally focuses primarily on department goals, rather than business goals, which leads to a substantial increase in all things negative that come from siloed thinking. This is what it looks like:

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Another incorrect approach that is taken is when there is no notion of cascading introduced as part of the OKR implementation. Meaning, the organization made the mistake of making no effort to establish alignment with their teams. This typically is the result of an implementation strategy that is no more comprehensive than simply saying "Let's do OKRs". When that is the extend of your implementation strategy, the resulting implementation might end up looking like this, where teams are all heading in opposing directions and don't even know it.

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The successful cascading of Objectives and Key Results (OKRs) is critical to the success of any organization. Cascading OKRs vertically and horizontally ensures that everyone in the organization is aligned towards common goals, making it easier to track progress and allocate resources effectively. Healthy cascading of OKRs also encourages collaboration and accountability at all levels, resulting in higher employee engagement, productivity, and ultimately, greater success for the organization.

Creating the right number of OKRs

Less is More

Creating the right number of OKRs is not only critical for maintaining focus but also for ensuring that everyone in the organization is aligned toward common goals. When too many OKRs are created, teams may struggle to prioritize their work, leading to confusion and a lack of progress. This can result in frustration and disengagement among employees, ultimately impacting the organization's success and derailing their efforts with OKRs.

To avoid this, it's important to start with shared OKRs at the leadership level. By setting only three to five OKRs for the organization as a whole, leaders can ensure that everyone is working towards common objectives. This approach helps to prevent siloed thinking and encourages collaboration across teams and departments. When leadership gets this step right, it avoids creating a "multiplier" effect that leads to too many OKRs being set throughout the organization.

However, when leaders create separate siloed objectives, they end up with multiple sets of OKRs across different departments or teams. This results in an excessive number of OKRs overall, which can make it difficult for individuals and teams to understand how their work contributes to broader organizational goals. Therefore, getting the number of OKRs right is crucial for ensuring that everyone is aligned toward common objectives and can achieve success effectively and efficiently.

Operationalizing OKRs in your organization

5-Step OKR Cycle

Operationalizing OKRs is a crucial step for any organization that wants to achieve its goals effectively. The alternative to operationalizing OKRs is to "set it and forget it", which has doomed goal-setting for ages. Operationalizing OKRs involves establishing a quarterly operating rhythm that enables teams to align their work with the broader organizational objectives. All modern organizations are establishing a quarterly operating cadence as it helps them to stay focused, prioritize their work, and measure progress towards their goals.

The 5-step OKR cycle created by Scaled OKRs can be the blueprint for how to operationalize OKRs in an organization.

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The first step is to establish and maintain strategic alignment. This involves ensuring that all teams are aligned with the organization's mission and vision. Leaders must communicate clearly about the company's purpose and ensure that everyone understands how their work contributes to achieving it.

The second step is to co-create and localize OKRs. Once everyone is aligned on the overall objectives, teams can create their own specific OKRs that align with the broader organizational goals. This step requires collaboration between team members and leaders to ensure that everyone has input into the process.

The third step is to develop action plans. Once the OKRs have been established, teams need to develop specific action plans outlining what they will do to achieve their objectives. These action plans should include clear timelines, milestones, and metrics for measuring progress.

The fourth step is frequent check-ins. Teams should meet regularly to review progress against their OKRs, discussing what's working well and where they may need additional support or resources. These check-ins provide an opportunity for teams to adjust courses if needed or make changes based on new information or feedback.

Finally, retrospectives and calibration are critical steps in operationalizing OKRs. At the end of each quarter or cycle, teams should take time to reflect on what worked well and what didn't. Based on this information, they can adjust their approach going forward or recalibrate their objectives as needed.

Overall, operationalizing OKRs requires a disciplined approach that involves clear communication from leadership, collaboration across teams and departments, specific action plans with measurable metrics for success, frequent check-ins for progress updates, and feedback on performance toward objectives achieved so far during the cycle period of time used by your organization (usually quarterly). By following these five steps outlined by Scaled OKRs as a blueprint for operationalizing your own Objectives & Key Results planning process you can ensure your organization stays focused on achieving its goals effectively while maintaining momentum throughout each cycle of execution.

OKRs vs KPIs

OKRs vs KPIs

Objectives and Key Results and Key Performance Indicators (KPIs) are both performance management tools used to measure progress toward business goals. However, there are some key differences between the two.

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OKRs are focused on setting objectives and measuring progress toward achieving those objectives. They are typically set at a higher level and provide a framework for teams to align their work with broader organizational goals. OKRs are often qualitative in nature, with specific metrics used to measure progress toward achieving the objective.

In contrast, KPIs are more quantitative in nature and focus on measuring specific aspects of performance that are critical to the success of the organization. KPIs typically measure things like revenue, customer satisfaction, or employee engagement and can be used to track progress over time. Unlike OKRs, KPIs are not necessarily tied directly to specific objectives but rather serve as indicators of overall performance.

Another key difference between OKRs and KPIs is their frequency. OKRs are typically set on a quarterly basis and reviewed frequently throughout the quarter, while KPIs may be tracked on a monthly or even daily basis.

Overall, while both OKRs and KPIs have their place in performance management, they serve different purposes. OKRs provide a framework for aligning work with organizational goals and tracking progress toward achieving those goals, while KPIs serve as indicators of overall performance across specific areas critical to the success of the organization.

OKR Implementation

Developing an Implementation Plan

Implementing Objectives and Key Results (OKRs) successfully requires a well-thought-out plan. One approach that organizations can take is to create a Minimum Viable Implementation Plan for OKRs. This plan involves a few key steps that help organizations to implement OKRs effectively while minimizing risk.

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The first step in creating a Minimum Viable Implementation Plan for OKRs is to establish an implementation team with executive sponsorship and an OKR champion. This team should include individuals from across the organization who are invested in the success of the initiative. The executive sponsor should be someone who can provide support and resources, while the OKR champion should be someone with experience in implementing OKRs who can guide the process.

The second step is to develop a clear communication plan. Communication is critical when implementing any new initiative, and OKRs are no exception. Leaders must communicate clearly about why they are implementing OKRs, what they hope to achieve, and how teams will be involved in the process.

The third step is to provide training and workshops on OKRs. Teams need to understand what OKRs are, how they work, and how they will be measured against them. Providing training and workshops helps ensure that everyone understands their role in achieving organizational objectives.

Finally, piloting the implementation plan helps identify the implementation patterns that work best in your organization. By starting with a pilot group or department, organizations can test their approach and learn from any mistakes before rolling out OKRs more broadly.

In conclusion, creating a Minimum Viable Implementation Plan for OKRs involves establishing an implementation team with executive sponsorship and an OKR champion, developing a clear communication plan, providing training and workshops on OKRs, and piloting the implementation to identify the implementation patterns that work best in your organization. By following these steps, organizations can implement Objectives & Key Results planning effectively while minimizing risk at every stage of execution.

OKR Pitfalls to Avoid

Pitfalls to Avoid

While Objectives and Key Results (OKRs) can be a powerful tool for driving organizational alignment and achieving business goals, there are several pitfalls that can impact an organization's ability to be successful with the framework.

One common pitfall is setting too many objectives. When an organization sets too many objectives, it can lead to confusion and dilution of effort. It's better to focus on a few key objectives that align with the organization's overarching goals.

Another pitfall is not aligning OKRs with the overall business strategy. OKRs should be aligned with the broader strategic priorities of the organization, so teams are working towards the same goals.

A lack of transparency can also impact the success of OKRs. Teams need to have visibility into each other's objectives and progress toward those objectives to ensure alignment and collaboration.

Finally, failing to measure progress effectively is another pitfall. Organizations need to establish clear metrics for measuring progress towards each objective, and they should regularly review progress against these metrics to course-correct as needed.

By avoiding these pitfalls and instead focusing on clear, aligned objectives that are transparently measured, organizations can set themselves up for success with the OKR framework.

Already using OKRs in your organization? Try our OKR Health Checker and know the health of your OKR program!

OKR WORKSHOPS

OKRs offer the opportunity for you to modernize the way your organization delivers value to your customers. Scaled OKRs offers a variety of private, in-house OKR workshops that are tailored to what your organization is needing most right now. Here are some examples of our OKR workshops typically range from 2-hours to 1-day in duration:

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Leadership Team Alignment: Breaking down silos and forming Team #1

Introduction to outcome-based planning

Team OKR Creation Workshop: Turn strategy into measurable goals with OKRs

OKRs for Managers: Leading and delivering in an outcomes-focused way

Establishing a Quarterly Operating Rhythm: The ultimate fix for clunky QBRs!

Contact us today to learn more about our custom OKR and strategic planning workshops!

CERTIFICATIONS

Professional certifications and advanced training are critical components of an individual's growth. Specialized certifications help demonstrate that you are a lifelong learner and committed to taking your career to the next level. As a company, we are recognized for our thought leadership in the implementation and application of the OKR framework, Agile practices, and strategic planning. Our mission is to empower individuals and organizations with the knowledge and skills needed to drive performance excellence through the effective use of OKRs.

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Certified

OKR Coach

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Certified

OKR Champion

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Certified Agile Portfolio

Management Professional

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Certified Strategy

Execution Professional

OKR Foundation

If you are interested in becoming an OKR practitioner or want to get started building up your OKR knowledge before taking a certification course, we recommend checking out our OKR foundation page. It provides a comprehensive playbook and case studies that even certified OKR practitioners find valuable as a resource to come back to!

LOOK AT WHAT PEOPLE ARE SAYING ABOUT OUR TRAINING!

Review our customer testimonials

Additional Resources

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How to Run
an OKRs Pilot

How to successfully introduce OKRs to your organization

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Reach Goals at Warp Speed

Finding the Right OKR Software for you Enterprise.

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The Ultimate
OKR Playbook

Best Practices for adopting Objectives and Key Results (OKRs)

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The Hybrid Future of Work

Attracting talent and achieving goals in a hybrid work environment

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