OKRs & Initiatives
All companies use some kind of goal-setting strategy. The really hip companies use OKRs. Yet, I've never found a good resource for explaining how to effectively implement them. Let's fix that!
“[OKRs] are a great way to help everyone in the company understand what’s important and how you’re going to measure what’s important. It’s essentially a great way to communicate strategy and how you’re going to measure strategy. That’s how we try to use them. As you grow a company, the single hardest thing to scale is communication. It’s remarkably difficult... OKRs are a great way to make sure everyone understands how you’re going to measure how successful you are against your strategy.” - Dick Costolo, CEO of Twitter; when asked what was the single greatest thing he took from Google into Twitter.
When I first joined Qualtrics as a software engineer, I was introduced to the OKR (Objective and Key Results) system as a way to tackle company-wide goal setting. In 2016, Kim Scott joined the Qualtrics board and helped us double-down on our leadership and goal setting (after all, she kind of wrote the book on it). Qualtrics even ended up building an internal tool specifically for how they operated with their OKRs.
When I helped found PocketRN, I took my love of the OKR system with me and knew that if we could appropriately adopt it even as an early startup, we'd be able to scale, reach our business targets, and learn, adapt, and grow. Today, we still use OKRs to ensure everyone, in all teams and across all departments, is aligned on what we need to do to achieve our vision and mission.
But adopting the OKR system is not as easy as it appears. Sure, there are a lot of great resources out there (that I'll reference throughout this article) on the "what" and "why" of OKRs, but there is a clear void in the "how". Even more troubling, a lot of the guidance found online—dare I say it—is likely not coming from someone who has personally implemented an OKR system. The "OKR templates" [1] [2] [3] [4] [5] [6] [7] [8] [9] [10] and other cut-and-paste solutions are often overly simple in their approach and don't consider the nuances of practical needs. In contrast, I'm not afraid of tackling the technical or methodological difficulties. In fact, it's pretty much the theme of my articles. So, let's roll up our sleeves and dig into the dirty details of OKRs and Initiatives.
What are OKRs and Initiatives?
OKR stands for "Objectives and Key Results". It is a framework for individuals, teams, and whole companies to align on goals and actions on a quarterly basis. OKRs are visionary and meant to stretch your whole organization into making significant change rather than maintaining the status quo. They are also a great tool for ensuring each individual has allocated time for their own professional development and aspirations.
OKRs are done differently at every company, and they should be! This isn't some cult. Take the aspects of the OKR method and curate and redefine it as you need. I certainly have done just that, and you'll be swallowing my flavor of the OKR-medicine.
You don't have to take my word for it.
If you'd rather the OKR rundown from the folks who invented OKRs, go read their document: it's really good.
Alternatively, you can check out Google's own guide on it. Google is pretty much the north star for OKR implementation as the OKR system was refined there.
Or, Dan North does a great job of going over some of the finer details of OKRs that are good to review after you have a working idea of them.
Last but not least, John Doerr, the father of the OKR system, has a great TEDTalk focused on the "why" of OKRs. He also wrote a book on it.
Bear in mind that although all these resources have great wisdom, they are all trying to appease a wide audience, most of which are passive consumers of their content. So their solutions are quite shallow and easy to grasp. Real business is never that simple, so in favor of losing the interest of my more passive readers, I opt for a deeper dive.
In so doing, you may notice that my definitions or implementation are different from that of the "OKR masters". You'll need to decide for yourself whether my solutions or theirs (or something in between) work better for you.
Objectives
OKRs start with 1-3 top-level objectives. An objective is what you want to accomplish. It’s the mission or purpose we rally around. Objectives should be significant, concrete, action-oriented, and inspiring. They should move you from business-as-usual to achieving meaningful progress.
Key Results
Each objective has 1-3 key results (KRs). A key result is how you are going to accomplish the objective. It’s the goal(s) that fulfill the vision. Key results should be SMART. That is: Specific, Measurable, Achievable, Relevant, and Time-bound. Although most of these aspects are explanatory, I have a few comments on a couple of them.
Measurable
The "measurable" aspect of key results is really important. They need to be defined based on their percent completion.
For repetitive tasks, put a number to it. As an example, if your goal is to get more feedback about your product, you could have a key result of, "Conduct user feedback sessions with 4 users." If you have interviewed three users, that would be 75% completed.
For project tasks, define clear milestones with set completion percentages. As an example, if your goal is to develop a login page for your application, you could have a key result of, "Launch the login page on our production app." You could define the completion of the design phase to be 25%, implementation to 75%, validated prior to release to 90%, and released to production to 100%.
You may have heard of the rule to target 70% completion on your OKRs. I disagree with that guidance and instead encourage you to make your goals as SMART-ly (see what I did there?) achievable as possible.
The illusion of control (Achievable)
There are several goals that you may find outside of your control. Consider the key result of, “acquire 3 new customers.” That largely has to do with many external factors. Most goals have bottlenecks, blockers, dependencies, or other aspects you cannot directly manage. When possible, try to align your key results to those things that you can control that will lead to desired outcomes. For example, you may have the data to know that on average, it takes 100 new connections to acquire a new customer. So your key result could be phrased as, “Make 100 new connections.”
For more tips, read about input, output, and outcome key results.
Initiatives & Tasks
Each key result has 1+ initiative. An initiative is an action needed to accomplish the key result. They’re the tasks that, when complete, fulfill the goal. Initiatives should also be SMART, and they should have a single owner who is responsible for seeing them through.
Although key results can have as many initiatives as needed, initiatives should take a significant amount of effort to complete and any individual should ideally have 3-8 initiatives per quarter. Initiatives can be further broken down into tasks.
Key Performance Indicators (KPIs)
When talking about OKRs or goal setting, you’ll often hear the term KPI. A KPI is simply an operational metric used to gauge a particular targeted goal. For example, you may have a KPI to maintain 80%+ customer satisfaction, which you can easily check by looking at a dashboard. OKRs can include KPIs, but generally should be avoided due to KPIs’ nature of falling to business-as-usual; try to only have KPIs be a part of the objectives that you want to aggressively improve.
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