What are OKRs (Objectives and Key Results)?

Objectives & Key Results - OKRs for short - are a great and simple tool that we use at Mäd to create alignment and engagement around easy to understand and measurable goals.

Because they are simple and easy to understand, they are a great way to get everyone going in the same direction.

A typical OKR is set in the following manner:

I will Objective as measured by Key Results.

The Objective is the "what" and the Key Results are the "how"

An example of this might be:

  • Key Objective: Grow revenue  by $50,000 this quarter
  • Key Result 1: 5 new clients signed up.
  • Key Result 2: Increase MRR (Monthly Recurring Revenue) to$30,000/month
  • Key Result 3: Sign $100,000 of new contracted work.

The  point is that the key results must be clearly measurable in 90 day's time. This can be in the following manner:

  • Qualitative measurement - Something was either done, or it wasn't. Redesigning and fitting out meetings rooms is an example of a fairly binary result.
  • Quantitive measurement - Adding $100,000 in additional revenue. We may only get $50,000 and so our key result was 50%.

Andy Grove, one of the co-founder of Intel, and often regarded as the "Father of OKRs", goes on to say

"The key result has to be measurable. But at the end you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it."

This graphic better illustrates how OKRs connect the Mission and Vision to the individual todos that everyone does on a day to day basis.

The list of companies that use OKRs include many well know brands:

  • Intel - obviously!
  • Walmart
  • Google
  • The Guardian
  • AirBnB
  • Spotify
  • LinkedIN
  • Twitter

What's the Difference Between OKRs and Good Old Fashioned Goal Setting?

  • Set Quarterly - Instead of year-long goals, OKRs are set quarterly to ensure that teams stay agile in the face of change, and that measurable outputs can been quickly.
  • Very Measurable - OKRs should be black and white, and at the end of each quarter it should take no longer than 15-20 minutes to review each Objective and Key Result and see if it has been hit.
  • Transparent - OKRs work best when everyone can see all the OKRs across their company, or at least their division. This level of transparency works well for numerous reasons, including the fact that it makes people publicity accountable, and also that it places their objectives in context with everyone else's.
  • Ambitious - If you or your team is hitting all of their OKRs every quarter, then it means that perhaps you're not being ambitious enough.
  • Simple - OKRs should be understandable at a glance, and should only take a few days to brainstorm and discuss, and then an hour or so to finalize and write. We hold the opinion that it is often the most incompetent people that hide behind complexity.
  • Decoupled From Rewards - OKRs should only be one part of the evaluation process for pay and bonuses of team members, as otherwise there will be the tendency to make the OKRs less ambitious so there is 100% certainty of hitting them, instead of being ambitious and going for stretch targets.
  • Bidirectional - OKRs are not set top-down, but rather as a result of joint discussions, and the initial draft should be created by the individual or team that will be trying to fulfill the objectives.

OKRs Best Practices

  • OKRs can be used both for individuals and teams for goal setting.
  • They are a fantastic tool for any knowledge based businesses such as Professional Services Firms, Product Companies, as every single person in the company can use them. OKRs may not be as successful in retail or general service businesses (we haven't tested this in these areas yet).
  • Put the customer first.
  • Remember to be ambitious. If you believe you can hit your Key Results easily, then then increase them by 30%.
  • Don't over do it with the OKRs. A good starting point is 3 Objectives, each with 3 Key Results, although this can be slightly less or slightly more depending on the team or individual.
  • If you can't measure the outcome, the Key Result is not a good one.
  • Each Key Result should have an owner, which is a single person who is ultimately held accountable and responsible for that Key Result.  
  • Key Results are outcomes, not tasks in themselves.
  • In the last two weeks of the quarter, you should sit down with the team or individual and review the OKRs and see which are either complete or almost complete, and discuss any learning points based on the quarter, and then use this to set new OKRs for the following quarter.
  • Ensure that all OKRs are aligned with the high-level business objectives. A great way to do this is for the CEO to publish his OKRs internally so everyone can see them.
Emanuele Faja

Emanuele Faja

CEO at Mäd. Emanuele brings on board a passion for minimalist Italian design and a 21st-century management approach. He consistently helps clients create and maintain market leader positions.

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What are OKRs (Objectives and Key Results)?
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