THE SYSTEM of Objectives and Key Results (OKRs) was first introduced in the mid-1980s. What started as two legendary leaders, Andy Grove at Intel and Gary Kennedy at Oracle playing around with traditional goal-setting models, has now developed into a framework used by many of the world’s leading companies.
Today, the OKR system has many famous proponents, including managers in leading companies such as Google and LinkedIn.
The Objectives and Key Results seems to have some magical aura of success – many teams swear by the method, and wouldn’t trade their OKR system for any other tactic.
So what is it that makes OKRs so powerful? And even more importantly, how can you apply this widely popular goal-setting approach to increase your company’s results?
There are plenty of OKRs best practices that, when applied consistently, will increase the likelihood of reaching motivating goals. As research by BetterWorks shows, “organizations that use formal goal setting exercises are 3.5X more likely to be in the top tier of financial performers every year.”
Up next, you’ll find 19 suggestions and tips for setting micro- and macro-level key objectives – so you can work smarter, not harder.
Best Practice #1: Set 3-6 Key Objectives at a Time
As you get started with the OKR goal-setting tactic, it’s easy to get derailed and set too many OKRs. In fact, the average employee can only work toward 3 to 5 goals at a time.
According to Google Ventures partner Rick Klau, Googlers set 3-6 key objectives per quarter.
As you’ll soon learn, every OKR needs to be a tad uncomfortable and difficult to reach. Having tens on these goals will soon get on your team’s way, leading to burnout and unaccomplished results.
Best Practice #2: Set Quarterly OKRs
Most companies working with OKRs set and measure their key objectives four times every year. This provides enough time for achieving ambitious and substantial goals without leaving the team rest on the laurels.
Best Practice #3: Set Yearly OKRs
In addition to the quarterly OKRs that are highly action-oriented and achievable after a few months of serious work, companies should also set yearly OKRs. These high-level key objectives should reflect on the company’s general mission and plan for the upcoming 12 months.
Look at it this way: Your quarterly OKRs should all contribute to the achievement of your yearly key objectives and results.
Best Practice #4: Add 3 Key Results Under Each Objective
The OKR-setting process works in two phases: First, you agree on the key objectives. Then, you’ll define what measurable results indicate whether an objective is reached. For example, your OKR could look like this:
Objective: Increase our monthly lead acquisition by 20%
Key results:
- Set up a new paid advertising campaign in 3 additional countries.
- Publish 3 blog articles that will bring 2K monthly organic website visitors.
- Get our blog’s visit-to-lead conversion rate up by 10% with new sign-up forms.
- Conduct a cold calling campaign and talk with 400 prospects.
Best Practice #5: All Your OKRs Must Be Measurable
Setting quantifiable objectives and key results ensures that you’ll have a way to measure your OKR’s progress. Having a clear target and seeing a measurable process will give your entire team a better overview of what’s working and what needs improvement.
Measurable objectives help to eliminate any possible confusion about your anticipated results, guiding every team member to focus on the tasks that yield most results.
Best Practice #6: All Your OKRs Should Be Time-bound
Once you’ve set quarterly or yearly OKRs, set a clear end date by which you need to reach the anticipated results. Having time-bound goals is beneficial in a couple of ways:
- You’re pressured (and motivated) to complete your work on time.
- You stop postponing important tasks to indefinite future.
- There will be a set date for measuring the results, showing whether you did or didn’t achieve your key objectives.
- Once one time period is over, you can set new OKRs and focus on the next high-priority tasks.
Best Practice #7: Set OKRs That Are Almost Achievable
The best OKRs challenge their owner by being demanding yet achievable. When setting your next quarter’s key objectives, find the sweet spot between impossible and easily achievable.
Jeff Weiner, CEO of LinkedIn, specifically encourages his team to set challenging OKRs, which aren’t readily achievable.
Best Practice #8: Aim to Achieve 70% of Your OKRs
Most teams working with OKRs say that they see best results with OKRs that are challenging to the point that they’re not 100% achievable by the end of a set time period.
When setting OKRs, assess your next months’ workload and evaluate how much you’re able to accomplish. Your key objectives should motivate you to contribute your best work and push your boundaries.
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Best Practice #9: Set OKRs That Inspire
As you set increasingly challenging goals, you also need them to inspire you to the extent you’re willing to push through all the hard work.
Inspiring key objectives all have these things in common:
- They’re supporting a bigger goal or mission.
- They clearly benefit other people.
- They have clear, actionable steps.
Best Practice #10: Follow a Clear Mission
No key objective should leave their owner clueless about the “Why.” When setting your OKRs, think about the exact reason you want to achieve a particular objective – Is it helping your company grow? Will it improve your customers’ lives? Is it helping the rest of the team move forward with their work?
Best Practice #11: OKRs Need Owners
For a goal to be effective (i.e. for a person to be able to accomplish it) it needs to be drafted and owned by a single person, reviewed by a manager, and tracked by both. Having vague company-wide objectives that no one’s responsible for only demoralizes your team as you sure won’t get those results accomplished.
When creating an OKR system for the upcoming months, set up multi-level goals:
- Individual level – owned by an employee
- Team level – owned by a team of employees and the manager
- Company level – owned by the management team and CEO
Best Practice #12: Make Your OKRs Public
For your goal-setting system to be effective, you need the approval from all team members. Companies seeing the highest success rates leave all the OKRs public so that they can be reviewed by peers and managers.
BetterWorks CEO Kris Duggan says they always see better performance on goals with cross-functional contributors: “Goals that are public for the entire company to see get 10.4% more check-ins than private goals.”
Best Practice #13: Get Rid of the Hierarchy
When analyzing OKR usage in several companies, BetterWorks found that people view their supervisor’s goals 20% more often than their own. That’s a sign people value transparency and expect the management to show the way.
Make all your OKRs public company-wide, so that everyone’s aware of each other’s key objectives and can support them by contributing some advice or work.
Best Practice #14: Get the Entire Team’s Buy-In
One of the key benefits of the OKR system is an increasingly centralized and transparent work environment. This also requires that every team member is invested in the program, being able to develop their own goals and suggest ideas for the company at large.
Behavioral scientist Gary Latham found that stakeholders who participate in goal setting end up doing better against those goals. Make sure you get the buy-in from every single team member by actively engaging them in the goal-setting process.
Best Practice #15: Pilot Shared OKRs
By definition, the key objectives are set by individuals and managed by single owners. However, occasionally setting shared goals goes a long way towards growing your team spirit.
At BetterWorks, an engineer created a goal to do 20,000 push-ups during the quarter and sent out an email saying others could donate push-ups toward the goal. Over 10 people signed on to contribute to his goal, and altogether they did 24,000 push-ups. A similar approach could be used to achieve work-related goals that do not have a specific owner or a person responsible for achieving the results.
Collaborative OKRs work best when set by influential team members who then invite others to join in.
Best Practice #16: Make your OKRs visible
According to BetterWorks, goals that owners have checked 10 or more times over the course of a quarter are 21% more likely to be attained than those checked only once or twice. Can you see a pattern here?
The more visible your OKRs, the higher their success rate. Look for different ways of reminding people of everyone’s goals such as sending weekly overviews or creating a large whiteboard displaying all the current OKRs and their process.
Best Practice #17: Conduct Regular Reviews
Every team setting goals may run into the danger of setting up and forgetting. To keep the entire team engaged throughout the upcoming months, make your OKRs more visible and top-of-mind by conducting regular reviews.
If you’ve followed the rule of setting measurable goals, now’s the time to take out your measuring tape (data and reports) and see how much process everyone’s made.
Best Practice #18: Grade Your OKRs
At the end of each quarter, it’s time to review all your key objectives and grade them. Google, for instance, uses a scale of 0-1 with 1 meaning the 100% attainment of your key results.
Your goal shouldn’t be scoring 1.0 points at every OKR – it means you’ve set the bar way too low. The perfect ratio of goal attainment rests between 0.6-0.7 points. If you only accomplish 30% of your OKRs, you’ve either set too big goals or need to review your daily work process.
Best Practice #19: Be Consistent
Once you’ve completed a quarterly round of OKRs, it’s time to set new ones. Getting used to the new goal tracking system does not happen overnight. Give your team at least 6 months to adjust their work with this new type of objectives.
After the quarterly OKR review, based on what you’ve learned over the past few months, do your best to create new key objectives that are challenging, inspiring, and attainable.
