OKR Writing 101: How to Write an Effective OKR

Posted by Saajan Panikar on Mar 31, 2020 1:48:19 PM
Saajan Panikar

March 3.1OKR. OKR. OKR. If you’re like me, you’ve seen this acronym everywhere. OKRs, or Objectives and Key Results, are the latest craze in Enterprise and Strategy management. They sound simple and straightforward enough, but writing an effective OKR can be much more challenging than it seems.

Before we get into how to write an effective OKR, it’s important to understand what they are and where they come from. I’ll provide some background on OKRs before explaining how to write a good one. I'll offer examples of various types of OKRs, including OKRs for specific business areas and quarterly OKRs.

 

What are OKRs?

I was first introduced to OKRs by Larry Page, one of the co-founders of Google, in the foreword of Measure What Matters by John Doerr. I thought, if OKRs are good enough for Google, then they’re probably good enough for me. But I found that they were not just good enough for Google—OKRs have found success at many innovative and customer-centric organizations, including:

  • LinkedIn
  • Twitter
  • Uber
  • Amazon
  • Anheuser-Busch
  • Microsoft
  • FiServ
  • Netflix
  • Samsung
  • Spotify

OKRs are not a new phenomenon. They were first proposed by Andy Grove in 1975 at Intel, where John Doerr worked at the time. Doerr brought the concept to a Venture Capital firm, Kleiner Perkins, which acquired Google in 1999. This is where OKRs took off and became the cornerstone of technology strategy that we know today.

So what exactly is an OKR? As I stated before, OKR stands for Objectives and Key Results. You work towards stated objectives or goals, and then you measure your progress towards those objectives with key results. Sounds simple, yet OKRs are so much more.

OKRs are really an alignment between strategy and execution. They are conveyed throughout an entire organization by flowing from top to bottom. Enterprise objectives feed and inform every level all the way down to the team level, and even further down to the individual level.

It's important to recognize the hierarchy. As an individual, your OKRs should align to your Teams' which should align to your Programs' which align to your Portfolios' and so on all the way to the CEO's vision for the future. However, It’s important that you as an individual maintain your own independence and autonomy as you align your OKRs to the overall strategy and goals of the organization. Balancing enterprise and personal goals can be tricky, because you want to do the most for your organization, but you also have to take care of yourself. Your goals should be realistic and achievable by you, with the resources you have available. Those constraints apply at every level of the flow. In that sense, OKRs are an invaluable tool for measuring alignment across an organization.

Are OKRs used only to define high level strategy? No! You can use them to guide and inform your decision making for targeted objectives as well...for example, here is my OKR for this article:

Objective: To write an engaging article on OKRs that provides value for people

Key Result 1: Article gets at least 300 views

Key Result 2: Article gets shared by readers at least 10 times

 

How to Write an Effective OKR

Everything has an Objective. From quick 5-minute touchpoints to executive strategy meetings, there is a purpose to everything we do. Objectives are qualitative goals that are aligned to strategy and calls to action. They are also concise. They are not meant to be all-encapsulating or so broad that they cannot be narrowed down.

Write your objective so you can easily tell if you have reached it or not at the end of your timebox. You can evaluate whether or not you have accomplished your objective through a small set of Key Results. Key results tend to be quantitative and are easily assigned a pass or fail. Either this target/metric was hit or it wasn’t. If all your key results are passed then you have accomplished your Objective. The more specific the Key Results, the better, but it's also important that they are realistic and grounded; therefore, KRs can be qualitative as long as they still meet the pass/fail criteria described above

Let’s practice:

You own a donut shop and want to grow your business.

  • O: Become the most popular donut shop within a 5-mile radius
    • KR1: Average 200 donuts sold before 9am every weekday
    • KR2: Average 300 units of coffee sold before 9am every weekday
    • KR3: Drive-through averages 150 unique sales every morning

 

How to Write an OKR for a Specific Business Area

Now, let’s say you want to be more specific and focus on a targeted area of your business. It’s possible, as long as you remember that more granular OKRs should still tie into those above them.

  • O: Increase specialty donut sales
    • KR1: Offer 5 kinds of specialty donuts by the end of quarter
    • KR2: Hire additional staff to create and test unique flavors
    • KR3: Create promotional offers for specialty donuts

As you can see, these are realistic, achievable targets that help define and align to strategy, vision, and purpose at every level. When you use an OKR to drill down into a specific aspect of your business, you have the ability to influence your roadmap as well. Not only can you target a line of business, such as specialty donut sales, but you can also group OKRs by function, such as Marketing, Sales, HR, Product Development, etc. for more targeted business results.

 

How to Write Quarterly OKRs

Another helpful tip is to consider changing the timescale of your OKRs to create nested value. This is an easy way to ensure that your OKRs align to those that came before them. By defining an annual OKR to help you determine where you want to be in a year, you can then write a new OKR every quarter to help you understand how to make progress on your annual OKR in the next 3 months. The effects of these quarterly OKRs snowball into tangible, actionable progress towards your goals.

For example, let’s revisit our donut shop and the OKRs described above.

Annual O: Become the most popular donut shop within a 5-mile radius

    • KR1: Average 200 donuts sold before 9am every weekday
    • KR2: Average 300 units of coffee sold before 9am every weekday
    • KR3: Drive-through averages 150 unique sales every morning

Quarter 1 O: Increase specialty donut sales

    • KR1: Offer 5 kinds of specialty donuts by the end of quarter
    • KR2: Hire additional staff to create and test unique flavors
    • KR3: Create promotional offers for specialty donuts

Quarter 2 O: Boost daytime sales by appealing to cafe campers

    • KR1: Increase available comfortable space by expanding seating area
    • KR2: Offer free high-speed Wifi for faster connectivity
    • KR3: Create customer loyalty program for increased repeat business

Notice how each quarterly objective builds upon the quarter that came before it and feeds into the annual objective.

 

Conclusion

OKRs are a great way to add transparency to your organization. When you and others understand the overall goals of your organization, everyone feels more empowered and motivated to help achieve those goals. That’s why it’s so critical to ensure you spend an adequate amount of time on your OKRs and think them through. Ineffective OKRs can lead you down the wrong path and cloud the real issues or goals that you or your organization are trying to achieve.

I hope these tips and tricks have been helpful for you, but if you find yourself scratching your head, feel free to reach out to us at ICON, or Atlas Revolutions for support. Our happiness is your success!

Written by Saajan Panikar and Saahil Panikar

 

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Topics: Transformation, Agile