OKR Explained – Guide to Objectives & Key Results: Structure, Types, Benefits, and Examples

4 min read

OKRs are the best framework for teams to set goals, which we’ve found helpful when working with companies of all sizes. In our previous blog post, we provided an overview of OKR methodology. This post will look into more details about the OKR framework and “how to write good Objectives and Key Results.”

Structure of OKR

Objectives

             Sub-objectives

                             Key Results

                             ….

             Key Results

             ….

Objectives define what is to be achieved. Objectives are qualitative, concrete, short, inspirational, memorable, and ambitious. Each objective should have 2 to 5 key results (KR).

Strategic objectives provide an ambitious goal for the entire enterprise.

A portfolio or a business unit’s objectives unite the entire business unit portfolio and programs.

Key Results is ‘how’ we achieve the objectives. KRs are a set of measures for each objective to track progress. Key Results must be quantitative, specific, measurable, time-bound, and realistic. 

When all key results for the objective are complete, the objective is achieved. If the aim is not realized after completing all the key results – most likely, it means that the key results were not defined correctly.

Types of OKR

There are many types of OKRs. Let’s review some of them.

  • Strategic OKR is a long-term objective for an entire organization. They are typically annual and are mapped to focus areas.
  • Tactical OKRs are short-term (usually quarterly) and are focused on a specific business unit, department, product, or team.
  • Aspirational OKRs are intended to motivate and energize teams to outperform on critical, high-risk objectives

Why OKRs

OKR gives us several key benefits. We start with a clear understanding of why we do it and focus on what is truly important to us and the business. This provides clarity and focuses that increases productivity for everyone. It allows us to track our success and take corrective action when we fall short. And it provides a means of motivating individuals and teams to achieve stretch goals while keeping them accountable for their results.

Implemented OKRs bring multiple benefits to an organization, portfolios/department, products, and teams:

Team Benefits

  • Better alignment of teams with stretch goals
  • Transparency of priorities
  • Aspirational OKR motivates teams
  • Teams excel by going above and beyond commitments

Product Benefits

What are the Weaknesses of the OKRs?

Organizations Have Too Many OKRs

If you have ambitious goals, it is tempting to set even more. However, problems begin to appear – OKRs do not align with one another. Employees don’t know which priorities to prioritize.

It’s simple to say that you should set fewer OKRs. However, different teams may place other priorities. OKRs are not always applicable across the company. Your sales team might be more focused on revenue than your product team. However, they may have similar ideas, such as the need to invest in product development.

John Doerr and Andy Grove are experts on Objectives and Key Results. They suggest that companies focus solely on one Objective and its Key Results. This would resolve some alignment issues. However, in complex organizations, this may look more like a vague goal than a clear vision.

Incompleteness. It Isn’t Easy to Achieve Accurate Alignment!

Essentially, OKRs are highly popular among start-ups. They’re not only for organizations that deal with lots of change. You may find some OKRs out-of-date as you look at OKRs every quarter or month.

They are not meant to be used in performance evaluations. OKRs may not be goals, but they can serve as a functional replacement for goals. But, OKRs also need a separate system to track progress towards goals and measure team and IC performance.

How to write good OKR

Start with Vision Statement

You need to have a vision statement for the organization. This is a critical first step.

When creating a vision statement, consider the following questions with your team:

  • Where would we like our company to be in five years? Or ten?
  • How can we do more of what we do well?
  • What is holding us back?  What would our future look like without those problems?

Strategic Objectives

The next step is creating strategic, well-formed objectives. By translating your vision into specific metrics and milestones, you can create a practical path to change. Goal setting is arguably the essential component of strategic planning, as it transforms vision into specific actions for your teams.

Objectives Rules:

  • Must align with the vision of the company
  • Must align with the enterprise strategy
  • Must be strategic
  • Must be inspiring
  • Must be time-bound
  • Must focus on value creation

Objectives can be cascading, going from top to the bottom, from the significant strategic objectives to the clear and specific objectives for teams, products and portfolios.

Key Results Rules

  • Must be measurable
  • Must be time-bound
  • Must be specific
  • Must be achievable
  • Must be value-driven

Examples of OKR

What are Typical OKRs for a Project Manager?

OBJECTIVE: Make a more significant impact on our trial to paid flow by the end of Q2, 2021.

Key results:

  • Complete a customer review module 
  • Build sign-up onboarding functional

What is a good OKR for a Customer Success Manager?

OBJECTIVE: Keep customers happy

Key results:

  • Collect and analyze feedback from 20 customers/month
  • Keep churn under 3%
  • Increase NPS to 9

What Can Be an Example of OKR for a Product Manager?

OBJECTIVE: Launch the new product in Q1 2022

Key Results:

  • Create 10 case studies with customers
  • Win 50 customers
  • Start working with a leading research organization

What are typical OKRs for a CEO?

OBJECTIVE: Grow Our Sales Team POD

Key Results:

  • Hire 5 new AEs by the end of Q1
  • Hire 2 new SDRs by the end of Q1
  • Hire 2 Customer Success Managers

What Can Be an Example of OKR for a Technical Team?

OBJECTIVE: Improve the Email Delivery Architecture

Key Results:

  • Implement Email validation
  • Implement Bounce Detection
  • Ship the new architecture documentation

PPM Express contributes to its clients with the best solution for setting, monitoring, and reporting Objectives & Key Results (OKR). Once the objectives have been set, you can track how projects contribute, track progress, encourage alignment, and encourage participation around measurable goals. PPM Express can display aggregated execution for multiple objectives.

In the next post, we will deep dive into setting OKR and discuss how to write good Objectives and Key Results.

OKR Explained – Guide to Objectives & Key Results: Structure, Types, Benefits, and Examples
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