OKRs reign supreme when it comes to helping team plan and measure success. They’re a tried and true method that’s been around since the 70s, and has revolutionized the way companies like Google, Microsoft, and Apple do business.
While there are plenty of other goal-setting methodologies out there, OKRs remain fan favorite for good reason.
“OKRs have helped lead us to 10x growth, many times over. They've helped make our crazily bold mission of "organizing the world's information" perhaps even achievable. They've kept me and the rest of the company on time and on track when it mattered the most." — Larry Page, former CEO of Alphabet and co-founder of Google
Done right, they can bring unprecedented levels of innovation and growth to your team too.
In this article, we’ll dig into everything you need to know about OKRs and share real-life OKR examples for all types of teams to get you started on your own journey.
OKRs are a goal-setting methodology created by Intel leader Andy Grove and championed by his mentee John Doerr.
The O stands for objective and the KR stands for key results. OKRs can be used by companies, teams, and individuals to drive ambitious outcomes with greater focus.
Grove created OKRs after observing that teams do their best work when they’re focused on driving specific results—not endless busywork. They’re meant to be for everyone within an org, from CEO to intern.
They’re especially powerful at companies focused on growth, who are looking for new ways to innovate, outshine competitors, and execute more efficiently.
“As a company, as a business, as entrepreneurs, we need to be focused on the outcomes we want, what we can learn, and what changes we can make to succeed.” — Mike Wu, former CTO, VSCO
OKRs represent your company or team’s focus, not the totality of work. They’re a guide used to direct effort.
At the most basic level, here’s how the framework looks in action.
To write effective OKRs, it’s important to understand how each of these components works on a slightly deeper level.
Objectives are the high-level goals you’re trying to achieve. They’re typically anchored to your organization’s values and mission, and help provide focus and guidance as to what top-level priorities are at any given time.
Strong objectives are:
Some examples of objectives:
“OKRs are really ambitious. They're things that are not easy to achieve. They're not sales targets. They're not quotas. They're big, hairy, audacious things that you want to force everyone to aim for, knowing that it's outside their comfort range.” — Ken Norton, Senior Operating Partner at GV (formerly Google Ventures)
Each objective should have 3-5 key results. These are your milestones and benchmarks—they explain how you’ll work towards your moonshot objective with clear, measurable outcomes. Each key result should have one designated owner responsible for its delivery.
Strong key results are:
Some examples of key results:
Here are a few more guidelines to get the most out of your OKRs.
“[OKRs] requires a kind of rigor and discipline about saying these are the most important things that are going on in the organization. It’s not the sum total of tasks. It’s not the work order for the enterprise. It’s whatever we as a team agree deserves special attention, and it really matters.” – John Doerr, Harvard Business Review
Short answer: both. But depending on different factors within your team or company, you might structure things a bit differently.
Here are two examples of how that might look.
With cascading OKRs, the company sets its OKRs first. The KRs from the company-level objectives then become team-level objectives, and the KRs from the team-level objectives become individual objectives. This approach is helpful because it puts someone on the hook at every level—and prevents duplicative work. It's a common approach at larger companies.
Objective: Become the leading travel booking company in the world
Objective: Increase booking conversions from 35% to 50%
Objective: Conduct user research in 3 target markets
With the top-down, bottoms-up approach—OKRs are set at the company level and shared so the whole team knows top-level priorities. Individuals and teams also create their own OKRs with this approach, but they don’t have to ladder up quite so strictly.
When team members can see the goals and key results they should be shooting for, they can be more creative about how they go about achieving results.
Objective: Become the leading travel booking company in the world
Objective: Generate 50,000 new social media followers
In this example, the individual believes that increasing their social media following will have a positive impact on the company-level initiative related to brand visibility. Their OKR is shaped by the company’s, but not directly cascaded from it.
“High-functioning teams thrive on a creative tension between top-down and bottom-up goal setting, a mix of aligned and unaligned OKRs.” – John Doerr, Measure What Matters
OKRs can help with alignment, focus, and execution at all kinds of companies and on any type of teams. They work well for personal goals too, and can even be used by teams and ICs to align when they’re not used at the company-level.
Objective: Grow annual recurring revenue (ARR)
Objective: Build a loyal customer base
Objective: Build a world-class product that users love
Objective: Launch new app update
Objective: Hit our 2022 business target
Objective: Generate pipeline
Objective: Build positive brand awareness
Objective: Launch a widely attended industry conference
Objective: Decrease customer churn
Objective: Expand support coverage to Hindi and Chinese
Objective: Get promoted to a management position
Objective: PR in the Chicago half marathon next year
“If you’re at an early-stage company where you haven’t yet found product-market fit, I recommend creating hypothesis OKRs. Write something you think might be true, set key results that will indicate if it’s true, and give it 6-12 weeks to prove or disprove.” — Christina Wodtke, author of Radical Focus and lecturer at Stanford University
Most teams set OKRs quarterly, but that’s not a hard and fast rule. Annual OKRs or half OKRs (every 6 months) are also fairly common.
No matter your cadence, it’s important to kick off the process with a solid planning session. Here, you’ll align on your top priorities (the objectives) and come up with key results at the team level.
“The idea that people will throw up their arms and say ‘I tried, and I just can’t write my OKRs’ is completely logical. It’s normal and often the reality. There’s no shortcut. You’re going to have to give OKRs the attention they deserve and invest in them.”— Andrew Beebe, Managing Director, Obvious Ventures
Establishing a way to track progress toward your OKRs is critical to the process. Too often OKRs are created, then left in a spreadsheet to be checked on only at the end of the quarter. At this point, there’s not much more to do than grade them and move on, which hinders the learning process.
When it comes to actually making progress, connecting your OKRs to daily actions is key. According to Stanford psychologist Kelly McGonigal, taking small daily steps that are in line with your goals is one of the best (research-backed) ways to drive results over time.
Reflecting on progress at the end of a quarter or cycle is also crucial. Taking time to go through a retrospective, which includes grading your OKRs, will help you and your team improve how you write your goals and objectives, and how you identify the best metrics with which to measure key results.
When you miss an OKR, hold yourself and your team accountable but don’t focus on blaming. Address when this happens, uncover what can be learned, consider whether or not you set the right objective, and then work to achieve the clarity you need to achieve success in the next cycle.
With Range Goals, OKRs are easier and more intuitive for teams to manage. They’re meant to help organizations avoid the “create and forget” trap, while also being simple to track so they become part of the regular cadence of communication.
Well, it depends who you ask. There are many different frameworks out there for tracking team progress and outcomes — OKRs are one of them. In the OKR framework, goals are broader and more long term than objectives. They give you the overarching direction for your business plan and define where you want to be in the future.
The right goal will align with your company vision, purpose, and long-term aspirations. You might use goals in your yearly and quarterly company strategy, in your positioning, mission statement, company culture guide, financial projections, and other crucial business documents and initiatives.
A goal establishes a desired outcome. An individual company goal is a broad statement; it is large in size and intangible, so it’s harder to measure than an OKR.
KPI stands for key performance indicator—they’re standalone metrics that measure the health of your business. OKRs help direct effort and work, while KPIs measure how you’re doing in one particular area. They can actually be complementary to OKRs, because KPIs typically make good key results.