It goes without saying that you can’t successfully run a team without formally documenting goals and objectives. That’s just like a shot in the dark. The talented employees that you have would be of no use if they don’t have a common objective to look forward to.
Ever wondered how the giants of the industry slay the market with ever growing revenues? The trick lies with OKRs.
What exactly are OKRs and how do they work, you might ask?
Read on to find out what do OKRs comprise of and some practical examples which you can easily implement in your business to achieve more in less time.
🧐 What does OKR stand for?
The acronym OKR stands for ‘Objectives and Key Results.’ It is a goal setting framework that has been around since 1970s. Popularized by John Doerr, one of the most successful venture capitalists, OKR sets the basis for defining your organizational objectives over a specified period of time.
OKRs are frequently set and evaluated continuously during the project lifecycle to make sure everything gets done on time. They also act as future references to monitor how well you executed your projects.
So, the basic formula behind an OKR is to set an objective, and 3 to 5 key results against it. These key results are concrete, measurable actions which lead towards achievement of objectives.
A major chunk of OKR is to make sure that everyone knows what they need to do, or what’s expected of them.
Now, this brings us to the question of how OKRs are different from KPIs (Key Performance Indicators)?
📈 KPIs vs. OKRs 🏁
Although both of these are used as performance measures, the purpose they serve is different. KPIs are key metrics used for evaluating how a team is performing against its goals.
These metrics are usually quantitative in nature and tend to accurately depict where the output stands at the moment.
If we dig a little deeper, we would find that OKRs are linked to broader organizational goals and objectives, whereas KPIs are mostly tied to individual performance. KPIs are put in place to keep day to day operations in check, and to evaluate the success of a particular process or activity.
Simply put, OKR framework focuses more on your priorities at a strategic level. Defining an objective and jotting down ways to get there. Whereas, KPIs primarily focus on quantifying goals and priorities to track performance at an operational level.
OKR in Project Management 👩💻
Setting an objective, along with possible outcomes, doesn’t sound like a big deal (it is, however), but the real game begins when you need proper action plans to achieve these objectives. This is where project management comes into play.
The action plan needs to determine the exact set of projects, tasks, and to-do list activities that you’ll need to map out for your objectives to become a success. There needs to be a defined way of making your way through your objectives to give them more meaning.
In other words, once you’ve clearly developed your OKRs, you need a step-by-step guide (projects and tasks) to help you achieve them. This step-to-step guide is what sets the basis for integrating your OKRs with project management.
Both OKR and project management go hand in hand. OKR gives a clear picture of what needs to be done, and project management shows how exactly to do it.
In order to effectively achieve your OKRs, you may need to invest in specialized project management software. When you’ve combined your OKRs with a powerful project management system, all your operations will be streamlined and will facilitate in easily measuring the project performance.
🌟 Success Stories – OKRs at Google
By now you’re probably wondering if there’s any practical example where OKR system actually worked. Good news for you! Tech giants like Google and Alphabet claim to have achieved 10 folds growth through OKRs.
Google was introduced to OKR by John Doerr in 1990, when it was less than a year old. Google readily adopted the process and has been implementing it since then. Through OKR Google has grown from 40 employees to more than 60,000 today.
The company has OKRs at every level, ranging from upper management level, down to individual level. All of these are inter-connected to achieve common organizational goals.
As your key results need to be measurable, Google uses a scale of 0-1.0 to grade them. But the aim is not 1, rather 0.6 to 0.7. If someone succeeds to get 1, their OKRs are not ambitious enough. Or are too easy, in other words.
However, if someone gets below 0.4, they need to look into what they’re doing wrong and push it harder to reach between 0.6 and 0.7.
Google OKRs are public, so that every employee can see what others are working on.
Besides Google, other leading teams using the OKR system include Uber, Airbnb, LinkedIn, and Spotify.
Let’s start with some of the OKR examples to help you quickly get started with the process. For your convenience, we’ve divided them up into categories.
👩💻 Project Management OKR Examples
If your projects are product-based, you can use the following OKRs:
Objective – successfully launch beta version of the product
- Key Result 1 – collect feedback from first 50% of the customers
- Key Result 2 – get published product reviews in at least 5 major publications
- Key Result 3 – get at least 50% new signups
Objective – design new product vision
- Key Result 1 – get internal feedback from your team (preferably on a scale)
- Key Result 2 – take feedback from at least 50% of prospective customers
- Key Result 3 – get maximum usability score on UX mockups from prospective customers
Objective – pinpoint problems with the current user interface by Q2
- Key Result 1 – run quality assurance of all features in real time
- Key Result 2 – present solutions for reducing lag time
- Key Result 3 – identify areas that cause product lags
Objective – improve product performance by 75% by Q4
- Key Result 1 – eliminate 90% bugs
- Key Result 2 – incorporate new tools to improve performance
- Key Result 3 – reduce processing time by 75%
📢 Marketing OKR Examples
Objective – Increase sign ups via email by 30% by the end of Q4.
- Key Result 1 – Increase click-through rate by 30%
- Key Result 2 – Increase email open rate by 30%
- Key Result 3 – Decrease email bounce by 30%
Objective – Increase market reach by 40% by Q4.
- Key Result 1 – 3rd largest distributor network growing by 10% per month
- Key Result 2 – published as the fastest growing network in 3 major publications
- Key Result 3 – increased brand visibility from 40% to 60%
😎 Sales OKR Examples
Objective – achieve 40% more revenues by the end of Q4
- Key Result 1 – increase gross profit margin by 25%
- Key Result 2 – start sales in new cities and achieve 40% more revenues
- Key Result 3 – increase monthly revenues by 25%
Objective – improve the efficiency of sales staff by 35%
- Key Result 1 – positive feedback from 80% of customers about the efficiency
- Key Result 2 – Training sessions conducted once every three months
- Key Result 3 – conversion rate increased by 30%
📐 Engineering OKR Examples
Objective – improved quality of features in the new release
- Key Result 1 – less than 5 major bugs in production
- Key Result 2 – increased unit test coverage from 40% to 70%
- Key Result 3 – implement the new QA process
Objective – improve data security procedures
- Key Result 1 – review security policies of top 5 companies
- Key Result 2 – 100% data recovery with daily backup
- Key Result 3 – conduct testing using at least 2 external software
In a nutshell, OKRs provide organizational focus to your team and help in drastically improving the productivity.
If you are already setting business and company goals using the OKR framework, share your views about it with us in the comments below.