Business owners set new goals for their teams daily; however, many of these goals and the plans that surround them fail due to poorly defined outcomes. As such, an objective without desired outcomes will likely never be successful as it cannot be measured. Fortunately, the process of setting clear goals and desired outcomes can be simplified by using objectives and key results, or OKRs.
In this guide, we’ll explain the OKR framework and when OKRs should be used. We’ll also provide several examples of objectives and key results so that you can better understand how to implement this framework. By the end of this article, you’ll know how to start making OKRs with S.M.A.R.T. goals that stick.
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What Are Objectives and Key Results (OKRs)?
Objectives and key results (OKRs), which can help your team become more Agile, are a goal-setting framework that helps businesses set objectives and track outcomes. In the 1970s, Intel CEO Andrew Grove developed OKRs after building upon an idea conceived by Peter Drucker, the author of “The Practice of Management.” The original idea, known as management by objectives (MBO), was developed to help leaders focus on long-term strategies.
Thanks to software such as monday.com (pictured), distributed teams can collaborate on OKRs in real time using live documents.
After learning of the MBO strategy, Andrew Grove implemented the idea of key results, which led to the development of OKRs. Since then, the OKR framework has been used by many companies, such as Google, Samsung and Amazon, to focus their efforts and improve their fortunes.
The OKR Framework
As mentioned above, OKRs are composed of objectives and key results. Below, we’ll take a closer look at each and show you how to write a simple OKR using the OKR formula.
What Are Objectives?
An objective is nothing more than a goal that someone or something, such as an SMB, wants to achieve. For example, a marketing company can set an objective to onboard 10 social media influencers to increase its clients’ social media followers. An objective of an e-commerce platform could be to increase sales.
An objective should be concise yet uplifting. When implemented correctly, objectives, which can last a quarter, a year or any set amount of time, can help teams collaborate and practice open communication, which are key traits of being Agile, and help everyone focus on what needs to be done.
What Are Key Results?
Key results help you measure and track your journey to your desired objective. Good key results will be S.M.A.R.T. (Specific, Measurable, Achievable, Relevant and Time-Bound). The idea is to create a result that you can measure to determine whether you successfully met your objective.
S.M.A.R.T. goals will help you achieve your business objectives.
Key results goals are typically set quarter by quarter. Teams work in quarter-long sprints, and key results are adjusted as needed. Revisiting key results and adjusting as needed is another key component of being Agile.
How To Write OKRs
The formula for writing impactful OKRs is simple. An OKR should look like this:
We will _____(objective)_____ as measured by _____(key results)______.
For example, “We will improve the quality of our sales leads as measured by 85% of leads completing all answers on our screening survey.” This is a simple example, but you get the idea. Your OKR will likely have more key results to help you determine if the quality of leads has improved.
When To Use an OKR
Objectives and key results should be used by leaders of CRM teams and project managers when they are facing a specific challenge. You can use OKRs to help improve sales, increase team member productivity, implement requests from key stakeholders or clients, and the list goes on. Just remember to use S.M.A.R.T. goals when determining key results and you’ll be on your way.
Examples of OKRs
Now that you know what OKRs are, it’s time to share a couple of examples so that you can better understand what they look like in various places of business.
Example of a Marketing OKR
OKR: We will meet 2025’s sales revenue targets by the start of Q4.
Key Results:
- Increase company sales from $40,000 per month to $60,000 per month
- Discover 750 quality leads each quarter by ensuring 85% of leads answer all questions on our survey
- Decrease the store’s website homepage bounce rate from 75% to 50%
Example of a Human Resource OKR
OKR: We will create a friendlier new hire onboarding procedure by the end of Q2.
Key Results:
- Increase the initial onboarding satisfaction survey percentage from 75% to 90%
- Improve the new hire training satisfaction score from 50% to 75%
- Ensure that the 30-day new hire check-in percentage increases from 60% to 80%
Example of an Operational OKR
OKR: We will implement a new document management system by the end of Q3.
Key Results:
- Choose and implement a new document management sharing and storing system
- 100% of all company documents have been migrated from the old platform
- All traces of the old document management system and subscriptions will be removed and canceled
Types of OKRs
In general, OKRs are split into two types: committed and aspirational. These two types of OKRs are similarly designed but can significantly impact the strategy you use to achieve your objectives. We’ll take a closer look at them below.
Committed OKRs
Committed OKRs are realistic objectives and goals that are achievable in your chosen timeframe. These OKRs are the ones you’ll choose to use more often than not and are the ones that everyone on your team agrees on.
Aspirational OKRs
Aspirational goals, also known as moonshot goals, are often lofty and more likely to fail. Before beginning an aspirational OKR, you should ensure that your team understands that failure is expected and that they should celebrate the attempt to achieve the goal rather than the result itself.
Benefits of OKRs
Whether you want to improve sales processes, project management processes or anything in between, it’s hard to deny that having defined objectives and key results can bring many benefits to the table. In this section, we’ll look at the key benefits of OKRs.
Increased Alignment
Objectives and key results can help align every team member with your organization’s goals. Team members aligned with the company’s objectives are more likely to overachieve, as they know exactly what is expected of them at all times.
Better Collaboration
Companies that use OKRs will benefit from increased collaboration. When OKRs are in place, team members, whether in the same department or not, will generally do everything they can to ensure that goals are met. This means teams are likely to increase communication and double cross-department efforts to ensure goals are met.
Enhanced Focus
Leaders should never implement more than a few OKRs at once, and ideally, there should be no more than four key results per objective. Going over this will likely stretch teams too thin and cause confusion. However, if you only implement a few OKRs at a time and limit the number of key results, you can benefit from hyper-focused team members, all of whom will have their eyes on the prize.
Increased Productivity and Motivation
OKRs can help increase employee motivation and productivity. When teams collaborate to set goals, it can increase employee buy-in and motivate them to hit their targets. The increase in motivation will generally lead to increased productivity.
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Frequently Asked Questions (FAQs)
What are OKRs?
An OKR is an objective and a group of key results used to measure whether the objective has been met. OKRs are set with S.M.A.R.T. goals to ensure that the results are specific, measurable, achievable, relevant to the organization and time-bound to ensure objectives are met on a given date.
What’s the difference between OKRs and KPIs?
OKRs are used to complete long-term company objectives and business goals, while key performance indicators (KPIs) are measurements used to determine progress.
What is an example of an OKR objective?
An example of an OKR objective could be increasing brand awareness for clients, improving team members’ productivity or increasing the number of products produced in a given time frame.
Can software be used to help plan OKRs?
Yes, you can use software to help plan OKRs. Many of the best project management software platforms and even many free project management software solutions offer real-time documents that allow team members to collaborate, whether in the same office or different locations around the globe.
