Luis Goncalves
Last updated on | Strategic Alignment

How OKR Works: A Beginner’s Guide

by Luís Gonçalves
how okr works

How OKR works?

OKR is a phenomenal goal setting framework that many companies swear by. It’s easy and simple. Very straightforward and is results-driven. Google, Intel, Amazon, Spotify and many other leading brands have been using it for many years. They deem it an effective tool that drives productivity, accountability, and engagement among employees from top to bottom. If you feel a massive disconnect between executives and teams in your company, OKR is a simple yet efficient mechanism  to fine tune this problem. As a leader, one of your roles is to keep everyone on the same page and this can be a really challenging responsibility if you don’t have a system to rely on.

Beginner’s Guide to How OKR Works

Would OKR work for your company? It’s a proven, sustainable concept that has worked for many companies worldwide. So it’s more likely to work for your company too if properly implemented!

However, as with any organisational tools, one of the biggest challenges when it comes to adopting this powerful framework is getting started. How do you start? Where do you start? How do you cascade it to your team? How do you know it’s working? Fortunately, there are vital steps that will allow you to successfully work OKRs.

In this article, you will see a checklist which you can use it as a quick, accessible reference to write your own Objectives and Key Results.

Does the way you write an OKR really matter? That’s what many company leaders ask. After all, isn’t OKR just any other goal setting methodology practised across companies in various industries today?

Well, the answer is yes. The way you craft your OKRs is essential. The reason is that OKRs are not just goals. They also provide a framework for strategy and execution. They also serve as a communication tool for conveying strategy to your entire team. It happens all the time – in some companies, good strategies often end up in the trash bin because they weren’t executed properly. Furthermore, putting more efforts on writing OKRs as a team can open the doors to innovative goals that can be achieved.

Before writing your OKRs, you must be familiarised with its two major components. The first component talks about your goals, and the other one is focused on key results.

How to Write an Objective

There are a few qualities of great objectives. First, they should be qualitative goals. They aren’t blurry or ambiguous, and should give a clear answer to the question “What”. Second, your objectives should be aligned with the company goals as well as your corporate strategy.

Creating objectives can be a tough task. Companies that have implemented OKRs sure know how tempting it can be to set up a multitude of objectives at every possible level. Below are the key questions that you should be able to answer to create effective objectives.

Is your objective high-level?

  1. Is it inspiring?
  2. Does it help you achieve the goals of your organisation?
  3. Is your objective indispensable?
  4. Is it time-boxed?

If your answer to all these questions are a big “YES”, you’re doing really well.

How to Write Key Results

The key results serve as the backbone of any OKR. Without specific, measurable key results, it will be difficult for anyone in your company to materialise their objectives. Basically, key results are quantitative indicators of whether the objectives have been achieved. They aren’t KPIs, as many people think. The key results are the specific steps that you should take in order to reach your objectives. They should be measurable. Otherwise, they are not considered KRs. Generally, KRs should adhere to the SMART guideline. They should be Specific, Measurable, Actionable, Relevant, and Time-bound.

  1. Is your KR a result, not just an activity or task?
  2. Does it help you achieve a specific objective?
  3. Is it time-bound?
  4. Does it belong to either a stretch or an operational type of goal?
  5. Is it important enough to appear in the top 5 KRs for the objective?

OKR Templates & Examples

Before proceeding with the following template and examples, bear in mind that there is no one-size fits all approach for all possible uses and cases. Use the sample below only as a guideline for wording your OKR. You can change this anytime.

Sample Template:

We plan to succeed in _________(OBJECTIVE)_____________ , as measured by _____KR____, _____KR______ and ____________. We plan to achieve this by ____DATE_____.

Check out the following examples of OKRs:

Example #1

Objective: Increase employee engagement

Key Results:

  1. Implement at least three engagement activities per department.
  2. Reduce attrition rate from 10 to 5%.
  3. Increase eNPS from 75% to 92%.

Example #2

Increase production by 40%.

Key Results:

  1. Hire 20 more staff.
  2. Provide incentives to most productive employees.
  3. Rearrange staffing schedule.

Example #3

Objective: Improve the new marketing process

Key results :

  1. Develop personal relationship with 8 potential customers
  2. Increase lead generation by 10%
  3. Launch 3 webinars in two months

More Tips on Writing Good OKRs

  1. Keep your OKR simple and specific. Many executives think that they need to contribute to every departmental objective, so they often end up spreading themselves too thin. Make sure to prioritise your objectives according to what your business needs.
  2. Cascade your objectives. It is important to let your team members and the rest of the company know about your objectives. This way, your employees will have a clear idea of what your goals are and how they can contribute to the realisation of these goals.
  3. Your KRs should be measurable. Whether you want to increase your revenues by $10,000 in one quarter, write 10 blogs for the month, measuring your key results should tell you when you have achieved your goals.
  4. Do not worry about stretch goals. The best objectives are difficult to achieve. But they are not possible. You want to encourage your team members to create stretch goals (ambitious) goals from time to time. It can be frustrating for them when they are unable to achieve those goals. However, by encouraging them, they could reach great milestones. By continuous feedback and coaching, you can help your team members reach their goals.

The success of your OKR process greatly depends on how you write them. The guidelines mentioned in this post, together with the examples and additional tips, should help you create powerful OKRs that will greatly aid in achieving your company goals.

THE ULTIMATE OKR GUIDE

Do you want to know more about OKRs? We wrote a white paper that summarises everything that you need to know in order to start using OKRs in your company! Do not wait any longer and download your white paper now.

Download The White-Paper

If you liked this article, feel free to visit our OKR TrainingOKR Consulting

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Luís Gonçalves

About Luís Gonçalves

https://www.linkedin.com/in/luismsg/

Luis Gonçalves is an Entrepreneur, Author & International Keynote Speaker that works exclusively with Senior Executives of 7 to 8 figure businesses on the deployment of his game changing ‘Organisational Mastery’ Methodology.

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