You've probably heard of OKRs if you regularly set team or company goals. OKRs, or "objectives and key results," are a goal setting methodology that helps teams set measurable goals. Although most companies set goals, only 16% of knowledge workers say their company is effective at communicating its goals. Setting OKRs can increase employee engagement and help your teams set and achieve ambitious goals.
This framework was developed by John Doerr and links your company's objectives with how you'll measure your progress. In this article, we explain how the OKR process works and share examples to help you set OKRs for your company, team, or personal life.
How do OKRs work?
OKRs help organizations set and track ambitious goals. It consists of two main components: objectives and key results.
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Objectives define what you want to achieve - boosting brand awareness, reducing carbon footprint, etc.
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The key results indicate progress toward achieving the objective, such as driving one million web visitors, making sure 25% of the material in your products is compostable, etc.
Organizations use OKRs to focus on what matters most and align their teams around common goals. It is important for organizations to set challenging but achievable objectives and define clear, quantifiable key results in order to track progress, identify areas for improvement, and make data-driven decisions.
There is a simple template for OKRs that can be adapted to fit nearly every purpose, but it is highly flexible:
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I will [objective] as measured by [key result].
Quarterly OKRs are usually set and reviewed, with regular check-ins throughout the quarter to ensure teams stay on track and can adjust their quarterly OKRs as necessary.
The history of OKRs
Andy Grove developed the OKR methodology while working at Intel in the 1970s. Grove's former employee John Doerr introduced OKRs to Google's founders, Larry Page and Sergey Brin, in 1999. In his book Measure What Matters, Doerr explains: “Andy had created this system for goal setting that was deceptively simple, but also the polar opposite of the conventional management by objectives (MBO) systems, which tend to be top-down, hierarchical, annual, and linked to compensation.”
Rather than focusing on procedures, Grove's revolutionary idea was that teams perform better if they focus on outcomes. As opposed to giving employees specific instructions, he would set an objective, then let them figure out how to achieve it on their own. Originally, Grove called his approach "Intel Management by Objectives," but later simplified it to just "Objectives and Key Results" - more commonly known as OKRs.
Establishing effective OKRs
OKRs can be set and phrased in a variety of ways due to their flexibility. As with any goal, OKRs should be measurable and falsifiable. Think of OKRs as the foundation of your strategy for the next few years. OKRs must, however, be tied to your day-to-day work in order to be effective. Keep these best practices in mind:
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Keep the number of objectives to a minimum. If you are implementing OKRs across your entire organization, aim for no more than 3-5 objectives per level (company, team, individual).
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Make key results measurable. It is important to have clear metrics to track progress, so you can measure what matters and achieve measurable results. In order to ensure a balanced approach to performance management, make use of both quantitative and qualitative KRs.
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Assign key result owners. Each key result should have a single owner who is responsible for tracking and updating progress. By promoting accountability and ownership at all levels of the organization, this aspirational approach to OKRs promotes accountability and ownership.
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Keep an eye on your account regularly. Check in frequently (weekly or biweekly) to keep track of progress, address obstacles, and stay focused on milestones and objectives. In order for the rollout and adoption of an OKR management framework to be successful, regular check-ins are essential.
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Integrate OKRs into daily work. Integrate OKR software with your team's daily workflow so goals stay visible and actionable. Microsoft, LinkedIn, and Spotify have implemented OKRs successfully to track progress, align teams, and drive measurable results. You can make sure that your strategic planning efforts translate into tangible milestones and achievements by connecting OKRs to daily work.
In spite of the fact that most companies set goals, research shows that only 26% of employees understand how their individual work contributes to the company's goals. The reason for this is that most teams set goals at the beginning of a year or quarter, but never revisit them again. When employees understand the link between their work and company-level objectives, their motivation doubles. Your employees will have a clearer understanding of why their work matters when you link their OKRs to your organization's goals.
Writing OKRs
Having learned the key principles of setting effective OKRs, let's dive into the specifics of writing good OKRs. It doesn't matter if you are writing OKRs for your company, team, or individual, the process is the same.
To write clear, compelling OKRs, follow these steps:
Step 1: Establish your goals
The first step in writing OKRs is to define your objectives. Describe your goal in a clear, succinct manner starting with the word "objective." Choose language that inspires and motivates rather than focusing on the activities or tasks involved. Every level (company, team, individual) should have 3-5 objectives. For example: Objective: Develop the leading cloud-based project management software on the market.
Step 2: For each objective, define 3-5 key results
You should list your key results below each objective with the phrase "key results." Key results should be specific, measurable, and time-bound, and they should include both quantitative and qualitative measures. To ensure accountability, each key result should have a clear target for measuring success.
For instance:
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Achieve a market share of 30% by the end of the fiscal year.
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By the end of Q3, achieve a Net Promoter Score of 60+.
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Launch three new features per quarter based on user feedback.
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By the end of Q4, increase the free-to-paid conversion rate from 5% to 15%.
Step 3: Make sure your OKRs are reviewed and refined
Make sure your OKRs are ambitious but achievable once you've drafted them. Measure your key results and set clear targets to ensure they are truly measurable. Take feedback from key stakeholders and team members, and revise your OKRs accordingly.
Step 4: Track and communicate progress
Ensure everyone understands how their work contributes to your OKRs by communicating them to all relevant teams and individuals. Establish regular check-ins to review progress, address obstacles, and update targets as necessary. Use an OKR tool or spreadsheet to track progress and maintain visibility. Take time to celebrate your successes and learn from your failures.
Following these guidelines and best practices will help you create OKRs that drive measurable results for your organization and help you accomplish your most important business goals. Implementing the OKR methodology can help you reach ambitious goals, whether you're an established company or a startup.
Examples of OKRs
Let's explore some real-world examples of OKRs now that you know the key principles of setting them. From company-wide objectives to team-specific goals, the following OKR examples show how the framework can be applied across different levels of an organization.
Company OKRs
Allbirds
Our company's objective is to have the lowest carbon footprint in our industry.
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Zero-waste supply chain and shipping infrastructure.
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Calculated carbon dioxide emissions will be offset 100%.
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25% of the material is compostable.
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75% of the material is biodegradable.
Zume Pizza
Zume Pizza's objective is to delight customers. Make sure our customers are so satisfied with our service and product that they can't help but order more pizza and tell their friends about it.
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A Net Promoter Score (NPS) of 42 or higher is the key result.
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A minimum Order Rating of 4.6/5.0 is required.
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In a blind taste test, 75% of customers preferred Zume over the competitor.
Team OKRs
The effectiveness of OKRs is the same at all levels, from the C-suite to functional teams. In the same way that they can direct our strategic thinking, they can also guide our functional work. Here are a few examples of team OKRs.
Marketing
Objective: Increase brand awareness
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Key Result: Drive 1M web visitors
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Key Result: Increase social media following by 10x
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Key Result: Recruit and onboard 1,000 community members
Product
Objective: Launch major product initiatives by the end of the quarter
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Key Result: A recommendation score of 8 or higher
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Key Result: 40% of MAU users use the new feature
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Key Result: Increasing sign-up-to-conversion rate by 25%
HR
Objective: Increase employee engagement and impact
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Key Result: 20% increase in employee satisfaction
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Key Result: Ensure 90% employee participation in performance reviews
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Key Result: Positive feedback from both managers
Sales
Objective: Increasing recurring revenue
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Key Result: Obtain $2 million in MRR
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Key Result: 25% increase in annual renewals
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Key Result: 10% reduction in churn
Personal OKRs
OKRs aren't just for the workplace. In response to a question about how he improved his personal life, John Doerr said he used his trusty system.
Objective: Spend more quality time with family, as measured by:
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Key Result: Dinner at home by 6 pm 20 nights a month.
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Key Result: Eliminating distractions by turning off the internet router.
The benefits of OKRs
Although you can use a variety of goal-management frameworks, OKRs help you align on flexible, falsifiable, time-bound, and easily measurable goals. You can map multiple KRs to each objective with OKRs, which is one of their biggest benefits. That helps teams:
Set actionable goals quickly
The built-in format of OKRs makes it easy for teams to set and refine their goals. Start with Andy Grove's distilled methodology if you're new to OKRs:
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I will [objective] as measured by [key result].
Now, instead of wasting time thinking about how to phrase your goals, you can get right to work.
Stretch goals can be easily set
At least one of your KRs should be a stretch goal in order to challenge yourself and your team. Stretch goals are intentionally challenging goals that you're not 100% confident you can achieve. Asana aims to achieve about 70% of its goals. We can calibrate better goals for the next quarter based on that information.
Enhance cross-functional collaboration
There is a good chance that your objectives will encompass initiatives from more than one department. Let's take the example of Allbirds from earlier. Their goal is to create the lowest carbon footprint in our industry. For this to happen, their product, shipping, operations, and design teams need to work together. It is likely that these teams would have individual KRs contributing to the central objective.
Increase employee engagement
Because there can be several OKRs for each objective, many companies prefer to set OKRs using a hybrid approach: company leadership and executives set the objectives, and individual teams or employees set the key results that contribute to those objectives.
Using this hybrid top-down/bottom-up approach, you can include and engage your employees in the goal-setting process. When employees know exactly how their KR contributes to the company's top-level objective, their KR is more likely to stay top of mind during the OKR cycle.
Integrate daily work with company and team goals
OKRs are most effective when you can connect your daily work to your team's strategic goals. The OKRs already begin to accomplish this by connecting the objective to the key results that contribute to it. Use an OKR tool that connects your daily work and regular projects to your company's business goals to maximize OKR's benefits.
Asana's Goals were developed to meet this need. With Goals in Asana, you can set goals and measure progress in the same place you track your daily work, instead of in a spreadsheet or PowerPoint.
Everything comes down to execution
A wise man once said, "vision without execution is hallucination." This idea inspired Doerr and OKR methodology: Good ideas without execution will remain just that: ideas.
In Doerr's view, setting goals - and, by extension, OKRs - is the most important lever in execution. As a result, we are able to focus our attention, establish accountability, and emphasize the activities that are really driving progress.
“When done right, goal setting is a very powerful tool,” Doerr told Betterworks. “Every team member in the company can link their goals to the corporate goals, knowing that their work is having a direct impact on the success of the company.”
FAQs
How are OKRs and KPIs different?
KPIs, or Key Performance Indicators, allow teams to track their performance within projects and initiatives. On the other hand, OKRs are a framework for setting and achieving goals. OKRs help you think holistically about your goals and how they relate to your work because objectives and key results are linked.
That doesn't mean your team can't use KPIs. There are some KPIs that make excellent KRs. Here's how they differ and how they can benefit your team:
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KRs are the metrics you will use to measure your OKR progress. The KR can be quantitative (e.g., increase web traffic by 2 million users per month) or qualitative (e.g., assess and document users' pain points). "Assess and document" can be measured in various ways, such as with polls, NPS surveys, or direct feedback.
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KPIs are quantifiable measures of how well your initiative is performing. As long as you link your KR to your company objectives, you could use the KPI framework to support an extremely quantitative KR (e.g. increase headcount by 15 people in Q3).
Stick with OKRs if both of these acronyms are new to you. Connect your team's individual efforts to the company's big-picture goals to drive employee motivation and achieve better results by empowering them with a holistic goal-setting framework.
How many OKRs should I define?
It is important to take into account the level of the organization and the complexity of the goals when setting OKRs. Every quarter, it's recommended to set between 3-5 quarterly objectives, with 3-5 key results per objective. Keeping the focus on the most critical priorities and making the goals manageable within the timeframe are two benefits of this approach. Having too many OKRs can spread efforts too thin, preventing significant progress, while setting too few may make progress difficult.
What are your best practices for implementing OKRs?
You can implement OKRs in your organization by setting clear, ambitious objectives at the company, team, and individual levels. Define 3–5 specific, measurable, and time-bound key results for each objective. Ensure everyone understands how their work contributes to OKRs by communicating them to all relevant stakeholders. Monitor progress, resolve obstacles, and update targets as needed through regular check-ins. Lastly, evaluate performance at the end of each OKR cycle, celebrate successes, and identify areas for improvement.
What is an OKR software?
An OKR software tool helps organizations implement and manage their OKR process more efficiently. Goal-setting templates, progress tracking dashboards, collaboration tools, and analytics and reporting capabilities are often included in OKR software. With OKR software, organizations can streamline their goal-setting process, improve visibility and accountability, and ensure everyone stays aligned and focused on achieving their goals. One of the most popular OKR software options is Asana.