These top 12 questions are hand-picked from the most common questions or OKR FAQs we have received from our experience with OKRs. The answers are based on practical examples and first hand experience of working with several hundreds of leaders and managers across industries.

What is OKR?

Objective & Key Results is a goal setting and execution framework that focuses on no more than 3 to 5 Objectives (per cycle) and no more than 3 to 5 Key Results per objective.

It’s a methodology that helps align the company strategy to its goals and people. OKRs ensure the whole organisation is focused on achieving the same goals.

OKRs were first introduced in Intel and then Google adopted the framework in 1999.

While it remained heavily used by technology companies for a long time, over the last 5 years many non-tech companies have started using OKR as their goal setting and execution framework. OKR provides you with a solid framework to focus on what matters most. This enables organisations to prioritise well and execute those priorities with agility.

Why use OKRs?

OKR is fast emerging as one of the top tools for strategy execution around the world.

Traditional goal setting and execution systems have relied heavily on mechanistic and outdated systems that no longer yield results. The sad part is most business leaders remain unaware of alternatives. In a landscape where businesses are experiencing change at an exponential rate, their responses to these changes remain sluggish. This renders businesses feeling vulnerable and impacts their bottom-lines not only in terms of profitability and sustainability but also leaves their employees feeling demotivated and disengaged.

Many organisations set goals as part of their Annual Operating Plans, and mesh that with an annual performance management cycle. Employee performance is rated using Bell Curves and the workforce is force-ranked to fit into a rating scale at the end of the year. OKRs on the other hand are ideally meant to be de-linked with performance reward strategies and are set on a quarterly basis.

This allows teams and individuals to assess changes in the marketplace, pivot in time and more importantly learn how to fail fast. OKR encourages to move away from completing tasks to creating value and results.

Whilst using OKRs it’s a good practice to make them transparent and accessible to all employees across the organisation. Of course, there are instances where certain elements may be confidential to protect the organisation from industrial espionage.

However, that being said, when employees get access to companywide objectives and how it links to the work they do, it contributes heavily to ‘job significance’ i.e. your ability to connect how your work contributes to the overall goals of the team / organisation. This is one of the most robust outcomes of OKRs that results in higher levels of employee engagement and motivation.

What are the benefits of using OKRs?

Laser Focus on Priorities: By virtue of the very structure of the OKR Framework, it allows organisations, teams and individuals to focus on what matters most. OKRs are the creamy layer over the ‘Business as Usual’ that allows you to prioritise on those few goals that create most impact to your team or business bottom-lines. Its a simple 80-20 rule. By focusing on the 20% priority goals, you achieve 80% of business impact.

Higher Aspirations: OKRs are not just top-down cascades like archaic goal setting frameworks. It allows individuals and teams to also add bottom-up goals to the strategic and tactical OKRs. In principle, when Organisational OKRs are created, teams and individual can also add their own ideas and aspirations to these organisational goals. This not only helps in tapping into the collective intelligence of the organisation, but it also creates higher levels of involvement and accountability.

Greater Alignment: OKRs by their very nature need to be aligned. Borderless OKRs help foster teamwork and ensure greater alignment to the overall strategic OKRs.

Job Significance: Due to increased alignment of individual and team OKRs to the organisational OKRs, employees can clearly see how their work contributes directly to the organisation’s success. This, by far, is the most robust finding in the space of employee motivation – a clear understanding of the result of their work.

Employee Engagement & Collaboration: When OKRs help in adding personal aspirations that are aligned to the strategic and tactical goals and provide job significance and alignment, teams are naturally geared to be motivated and they collaborate better.

Increased Innovation: Using the collective intelligence of the organisation and setting the right culture of multi-directional goals setting, employees contribute more. Moreover, OKRs enforce and agile culture where rapid experimentation, a ‘fail-fast’ mindset and organisational learning is a given. This heavily contributes to the level of innovation across the board.

Ownership: More involvement means more ownership. With OKRs, teams and members are constantly involved and support by agile leadership where the leader plays the role of a coach and a facilitator allowing team members to co-create the blueprint for organisational growth.

Value Creation: Last but surely not the least, OKRs help focus on the outcome (results) and not the activity. This leads to employees spending more time in finding solutions to create better results rather than simply completing activities in their to-do lists.

What are the various types of Objectives?

Objectives should help answer the questions – Where do I want to go? What are my goals?

Objectives give you a sense of direction, and when well crafted, should inspire your people to work toward them. When objectives are poorly written, they end up being poorly executed. At the end of a cycle (quarterly or annual) you should be able to confidently assert whether you have achieved the objective of not.

Guidelines for writing compelling objective:

1. Must be aspirational, exciting, and directional (aligned to purpose, mission, or strategy).
2. Must be qualitative and devoid of any measurable.
3. Stick to 3-5 objectives, to maintain laser focus.
4. Start with action verbs e.g. Create the most loved brand.
5. Could be committed (short term) or aspirational (longer term).

Objectives can be crafted at various levels within the organisational ecosystem. Give below are some common forms of objectives one can see:

• Annual Organisational Objectives
• Quarterly Organisational Objectives
• Departmental Objectives
• Functional Team Objectives
• Cross-functional Team Objectives
• Individual Objectives

Objectives also need to be derived from your organisational strategy. With the global marketplaces getting volatile, uncertain, complex, and ambiguous (VUCA), strategies are no longer valid beyond an annual term -unless you have clairvoyance. If your strategy is to create new products within an existing market, your objective must be associated with it and ultimately yield that strategy.

For example: Annual Organisational Objective

Quarter 1 – Objective 1: To create a winning product in Asia region.

• Key Result 1.1: Release version 1 of the product by Q1.
• Key Result 1.2: Achieve $2 million in product net sales.
• Key Result 1.3: Generate operating margin of 55%.

What are the various types of Key Results?

Key Results(KRs) should help answer the questions – How do I measure success? How will I know I have reached my goal?

KRs should give you a sense of how well (effectiveness) and how quick (efficiency) should you be in order to reach your goal.

Guidelines for writing compelling KRs:

1. Must have a stretch and should be reflective of the Objective at hand.
2. Must be quantitative and have a measurable.
3. Stick to 3-5 KRs to every Objective.
4. KRs are KPIs (metric) with a target.

In the below cited example for KR 1.2, Net Sales is the KPI (metric) and $2 million is the target.

Objective 1: To create a winning product in Asia region.

• Key Result 1.1: Release version 1 of the product by Q1.
• Key Result 1.2: Achieve $2 million in product net sales.
• Key Result 1.3: Generate operating margin of 55%.
• KEY RESULTS – EXAMPLES

Value Based Key Results

Key Results must be ‘value-based’ and not ‘activity-based’. This is one of the most important and often underestimated part of good OKRs. Key Results define success criteria and should determine whether a person or a team achieved success. But to do that, KRs cannot be based on activities for three main reasons:

1. Activities narrow the focus on completion rather than impact.
2. There are several instances when tasks got done, but there were no outcomes.
3. Focus must be on the destination and not on the means to get there.

Here are some examples of activity & value based Key Results.

What are Initiatives?

Initiatives answer the question – what do we do to get there?

Initiatives are activities, tasks or projects that you undertake which are necessary to achieve a Key Result. They are within your circle of influence. You need at least 1 initiative for each Key Result.

DNA of OKRs

How do I balance OKRs?

Balancing OKRs

One of the key components of generating value is through balancing Key Results that eventually measure success. Success is a combination of efficiency (speed of doing something) and effectiveness (quality). Thus, your KRs must reflect this balance in the grand scheme of things.

Example 1

This grand-prix OKR anticipates that reducing pit stop time can lead to cutting corners or at the very least, unintentional mistakes as the team speeds up their work. It is not enough just to do a faster job; the pit stop crew also needs to make as few errors as possible. By pairing the two key results, the team makes clear that their goal is to increase both the speed and quality of their work.

Objective: Win the grand-prix 2020.

(Note the inspiration, ambition, and the qualitative nature of the objective at hand.)

Key Result 1: Reduce average pit stop time by one second.

Key Result 2: Reduce pit stop errors by 50 percent.

Example 2

Objective: Create the most amazing customer experience.

(Note the inspiration, ambition, and the qualitative nature of the objective at hand.)

Key Result 1: Net Promoter Score increases from 60 to 65 in Q1.

Key Result 2: 20% Customers have repeat purchase in Q1.

Key Result 3: Cost of Customer Service is < 30% of revenue in Q1.

Note: KR1 & KR2 are measures that may give you great results. However, at what cost? Hence, adding ‘Cost of Customer Service’ as the third metric ensures sanity through balance.

How does one align OKRs?

Aligning OKRs

OKRs need to be aligned at every stage of the process. To start with, when you define the organisational OKRs, care must be taken to ensure that it speaks with your annual strategic intent. Vanilla OKRs created in isolation that are not reflective of your overall vision, mission, purpose, or strategy tend to not inspire employees.

By its very nature, alignment is the coming together of parts. Ergo, cross functional teams at every level need to be in constant dialogue for OKR alignment to be successful.

The key rule of alignment is – if the OKR does not contribute to the higher-level Objective or Key Result, it must be discarded. This prevents teams and individuals from working on initiatives or projects that do not contribute to the organisational priorities.

The other key rule that helps in the alignment of OKRs is the transparency of OKRs and Initiatives. When teams and its members can see what’s happening across the board, execution becomes faster and easier. The whole purpose of alignment is to ensure everyone is working towards the same goals and is investing time and other valuable resources for a singular purpose.

When you look at the below cited example,

This could be an organisational or cross-functional team level OKR. Be it as it may, if the ecosystem has the following teams:

• Business Development
• Marketing
• Product Development
• Finance
• HR

Each of these teams should end up creating their own OKRs to align to the above larger OKR set.

How to review and grade OKRs?

Reviewing & Grading OKRs

After the end of any cycle (1 quarter or annual), it is critical to review and grade your OKRs. Objectives don’t get graded, its usually the Key Results that do. The initiatives are assessed based on the progress they are making.

At the end of the cycle one should be able to objectively assess whether the Objective we set was achieved or not. Period! It is a yes or a no answer. However, when it comes to Key Results, one can grade them based on the level of achievement.

Why is Organisational Culture important for OKRs?

Agile Culture for OKRs

Nearly 70% of OKR initiatives fail. One of the primary reasons for this is the lack of supporting organisational culture. Many a times, we are asked by CEOs if they should wait for the organisation to develop the right culture before implementing OKRs.

The simple answer is – not really! It’s a bit of a chicken-egg situation. When you implement OKRs correctly, you support the evangelising of the right culture; and conversely, when your culture is constructive enough, OKRs tend to flourish. Hence, the intention is key here.

Implementing OKRs blindly without taking stock of organisational readiness is surely a colossal waste of time, not to mention the intangible impact across the system. Many a times, its a bunch of Unconscious Biases that have an impact on OKRs as well.

Starting with agile leadership practices is a good way to go. When leaders truly transform how they show up at the workplace and start empowering their teams, it provides for a good ground for OKRs to flourish.

Trying to force-fit OKRs into passive-aggressive cultures where corner offices dictate decisions and people down the line are rendered mere implementors to those decisions, is a faux-pas one must avoid. Its quite like taking the engine from a formula-one car and fitting it into a vintage model trying to make it run. The results are disastrous.

How do I implement OKRs?

OKR Framework – Overview

Designing OKRs are one thing; Implementing them is another. Making implementation simple and robust is where our framework comes in. Our team of highly experienced and certified OKR practitioners bring simple tools and technology at your fingertips. With decades of global experience in developing the right skill sets and shaping the requisite culture within your team, our unique framework acts as a implementation compass for you. Our time-tested framework is easy for your employees to understand and robust enough for you to see changes from the very first quarter.

OKR Framework

Focus on Priority

We believe in keeping the main thing, the main thing. We work with your leadership team to understand the strategic goals of the organization and align them to the OKR Implementation plan. Whatever your existing systems may be, we help you to integrate OKRs with minimum disruption.

Align for Momentum

Implementing OKRs is about making radical changes in your organisation’s culture. As experts in culture change, we bring the requisite repertoire to help you make OKRs a way of life. Creating a transparent and engaged system includes critical activities such as

• Creating a buy-in from people across the board
• Training your leaders and teams on OKRs and supporting skills
• Establishing visible cross-functional dependencies
• Validating OKRs
• Ensuring the top-down and bottom-up approach
• Choosing and Implementing the right technology

Track Check

Implementing OKRs is by far the most crucial aspect of this framework. This means working with leaders to establish ownership and role-model execution from the top. We take pride in making things simple. Using a phased-out incremental execution plan not only makes it easy for you but also provides an opportunity to learn quickly and improve.

The efficacy of execution within the OKR framework depends on choosing the right cadence. This includes key activities such as all-hands meetings, regular progress reviews, check-ins and a fair system of tracking and grading progress. We assist you in using the CFR (Coaching-Feedback-Reinforce) methodology by coaching and co-reviewing these critical activities.

Build Sustainability

Our unique Build-Operate-Transfer (BOT) model ensures we are with you every step of the way. Our ongoing support systems will provide you with the necessary Tsūrukitto (Toolkit) including the OKR Implementation Guide, Meeting Templates, Job Descriptions for OKR Champions (North Stars), OKR Assimilation Guides for new joiners, OKR Checklists and FAQs for teams. We also offer support during the quarter-end wrap-ups in the initial stages until you are confident to take over yourself.

What are some common OKR traps?

OKR Traps

There are several aspects of OKR Planning and Implementation that could lead you into a trap. When you are embroiled in the OKR cycle, often times one can lose focus on the larger picture – we call this forest for the trees.

It is critical that you have a checklist of ‘What to avoid’ whilst you are planning and implementing OKRs. Here are 20 mistakes you could be watchful of.

1. Making OKRs a part of your Reward Strategy.
2. Not connecting your OKR to the organisational purpose or strategy.
3. Not making Key Results measurable.
4. Making Key Results activity-based.
5. Going gung-ho and setting OKRs for the entire organisation at a go.
6. Having too many objectives and key results within a single cycle.
7. Blindly copy-pasting an OKR simply because it worked for someone else.
8. Using OKRs because Google did it.
9. Not making your OKRs transparent.
10. Not using the right software at the right time.
11. Accepting OKRs even though it does not contribute to a larger team or organisational OKR.
12. Implementing OKRs in a mechanistic (top -down) rather than agile (multi-directional) way.
13. Trying to force fit OKRs when your organisational culture does not support it.
14. Not investing in developing agile leadership to support OKR.
15. Not being disciplined in your cadence review process.
16. Not spending enough time between reviews to providing regular coaching and feedback to your people.
17. Sandbagging OKRs.
18. Not encouraging people to experiment, fail-fast and share learnings openly with the team and organisation.
19. Implementing OKRs without understanding the change management process.
20. OKRs are not an HR Initiative. Absence of CEO/CXO level buy-in is the starting point of failure.