What are OKRs?

Learn what OKRs are, how they work, and why they're important for aligning on and executing the strategy within your organization.

OKR stands for “Objectives and Key Results.” Simply put, OKRs provide a common language and framework for defining, aligning, and driving desired outcomes. They give teams clarity on what they are trying to achieve within a given quarter and how they will measure milestones on their path to achieving it.

Used correctly, the OKR framework can help employees prioritize, align, and measure the outcomes of their efforts toward achieving big, aspirational goals. Although they’re designed for reference and use by teams on a regular daily or weekly basis, OKRs can be especially impactful in times of organizational transformation and change — when efficient and profitable execution of the strategy is more important than ever.

Most commonly used by companies to execute their strategic priorities, OKRs may also be used by individuals or small teams to set and rally around intentional goals.

Free eBook
Practical Guide to Enterprise OKRs

Download the Guide to learn how leading enterprises use OKRs to cultivate an Outcome Mindset and execute the strategy at scale.

Download Guide

What are the components of an OKR?

A single OKR consists of one Objective and multiple Key Results.

Objectives

An Objective is a statement of direction and intent, i.e., where an organization or team wants to go. Objectives are not meant to describe how the team will get there.

Characteristics of Objectives:

  • Aspirational: An Objective describes an ideal future-state and should inspire and motivate people with a sense of purpose. Objectives are the lofty, aspirational goals that may seem almost impossible, but motivate teams to reach higher than ever before.
  • Not Measurable: Objectives are not meant to be numerical, measurable goals - that’s what Key Results are for.
  • Short or Long-Range: Depending on how lofty an Objective is, it may require months or years to achieve. Objectives may be short-term or long-term goals, lasting a single quarter, multiple quarters, or more than a year.
  • 5 or Less: In an effort to focus people’s time and resources, teams should ideally have no more than 3-5 Objectives per quarter.

Key Results

Setting a lofty Objective can inspire a team to reach high and work diligently. But how do you know if you’ve successfully achieved an Objective? Key Results are the measurable outcomes that, if realized, move the associated Objective materially forward.

Characteristics of Key Results:

  • Measurable: Key Results are numerical, with a target that clearly defines what it means to be complete.
  • Defined Quarterly: Unlike Objectives, which may require multiple quarters or years to achieve, KRs are outcomes specifically designed to be completed within a given quarter.
  • 4-6 per Objective: In an effort to focus people’s time and resources, teams should ideally have 4-6 KRs per Objective.
  • Outcome-Focused: Although it can feel natural to think of Key Results as specific activities, great KRs actually describe the intended outcome achieved by completing those activities. In other words, we care more about realizing an intended outcome than simply completing a series of activities. Outcomes, not activities.

An outcome mindset helps ensure every person understands how their work contributes to achieving the company strategy. Learn more about the benefits of an Outcome Mindset Methodology.

What are examples of OKRs?

Now that we have an understanding of the components of an OKR, let’s look at a couple of examples. First, see how this team sets various measurable key results to drive a successful project:

Next, let's analyze an example OKR:

Objective:
Create an employee experience that enables all teammates to achieve their fullest potential

Analysis:

  • Aspirational: The Objective describes an aspirational goal that can inspire and motivate the team. Striving for an “employee experience that enables teammates to achieve their fullest potential” may sound a bit too lofty or ambiguous. That’s okay, we’ll use our KRs to get tactical.
  • Not Measurable: This Objective does not attempt to define how success will be measured. Again, that’s what Key Results are for.
  • Short or Long-Range: Realistically, achieving this aspirational Objective may require months or even years. This may be a consistent Objective over the next several quarters. How efficiently we achieve this Objective will be determined by how well be achieve our associated KRs.

Key Results:

  • >80% of people understand our company strategy and feel confident in how their daily work contributes to achieving it.
  • Participation in Employee Resource Groups increases from 7% to 15% of all employees so we build networks and relationships beyond any individual team
  • <5% differential in under-represented groups for new hires and first line managers (visible to Leadership and HR only)
  • <3% differential in belonging index across under-represented groups, gender, and age

Analysis:

  • Measurable: Each of our Key Results is numerical, with a target that clearly defines when we have achieved success. Our team can immediately identify which results we’re working towards. High fives!
  • Defined Quarterly: Although our Objective may require multiple quarters to achieve, each of our KRs describe the outcome we will work towards within the present quarter. These KRs are focused on the next 90 days, no longer than that.
  • 4-6 per Objective: We have four KRs for this particular Objective. That makes it easy for us to focus our people’s time and resources on the few outcomes that matter most. Less is more!
  • Outcome-Focused: Take a look at each of the KRs again. Notice that each KR describes an outcome, not an activity. Remember, a great KR clearly defines an intended result. It does not describe all the activities required to achieve that result. These KRs are all outcome-focused — awesome!

Now that you have a strong understanding of what makes a great OKR, explore OKR examples by company function.

What are the business benefits of OKRs?

OKRs connect the needs of the company with the needs of the team and the individual employee. There are six primary business benefits of OKRs:

Strategic Clarity

OKRs provide transparency and clear visibility into each team’s strategic objectives, so everyone knows the strategy and how their work contributes to achieving it.

Vertical & Lateral Alignment

Teams localize OKRs into their nouns, verbs and numbers and enrich them with the team’s expertise and insight.

Aspirational Outcomes

Teams can set big, bold Objectives and use Key Results as clear measurements of success.

Accountability

OKRs are designed to be fully transparent across an entire organization, ensuring that every team member is contributing to achieving the goal.

Resource Allocation

Greater visibility eliminates redundancies and focuses human capital on executing the strategy.

Systematic Learnings

Organically capture ongoing learnings and document how team members navigate and overcome roadblocks. OKRs help create an environment of systematic learning that permeates an entire organization.

Who uses OKRs?

OKRs are a framework for strategy execution that can be utilized by every individual and team within an organization — from Marketing and Finance to Product and Engineering. Knowing the strategy and how people’s work contributes to achieving it, is vital for any leader or individual contributor.

For example, a CEO may use the OKR framework to efficiently communicate the company’s most important Objectives for the quarter to the entire organization. The CEO uses Objectives to define the big, aspirational goals that will inspire all teams, and KRs to measure towards achieving those Objectives.

A frontline manager can then review the company’s Objectives and set her own team’s Objectives that clearly align with those shared by the CEO. She has direct visibility into the company’s strategic priorities and is able to ensure her team is clearly contributing to achieving those strategic priorities. Her peers can do the same.

Clear vertical and lateral alignment empowers all people and teams to contribute to achieving the strategy and connect to the mission of the organization.

Why is it important to connect OKRs with Monthly Business Reviews?

Monthly Business Reviews (MBRs), scorecards, and weekly status reports provide teams with critical opportunities to align and measure progress to plan. However, many organizations experience ongoing disconnects between their priority objectives and the strategic conversations that take place each day. The priority OKRs that teams set at the start of each quarter are rarely front-and-center during strategic team meetings, resulting in hours of unproductive status updates and a chronic lack of clarity on what matters most.

In addition, preparing for MBRs often requires days or weeks of manual reporting that culminate in a series of static PowerPoint slides and outdated Excel spreadsheets. Multiple FTEs may be responsible for collating data from across the organization that is no longer accurate by the time the meeting begins. Leaders report spending up to 60% of their time in executive reviews debating the accuracy and authenticity of the data.

Without reliable data that accurately communicates KR progress, leaders and teams are unable to make efficient and informed business decisions during MBRs or weekly reviews. To drive efficient strategy execution, leaders must bring OKRs into their regular MBRs, scorecards, and weekly status reports.

By threading OKRs into MBRs, participants show up to meetings with a clear understanding of the team’s most important Objectives, current progress towards achieving quarterly KRs, and where risks and roadblocks must be eliminated. Therefore, the time in the meeting can be fully devoted to achieving the strategy.

Learn more about the value of bringing OKRs into MBRs and weekly meetings.

What is the history of OKRs?

Objectives and Key Results were developed by Intel CEO, Andy Grove, in the late 1960s. With roots in Peter Drucker’s Management by Objectives (MBOs), OKRs were introduced as a framework to define and execute Intel’s ambitious goals.

One of Grove’s early students, John Doerr, went on to author Measure What Matters, a foundational introduction to OKRs. Doerr later served on the board of Google, where he introduced OKRs to Google’s founders, Larry Page and Sergey Brin.

Credited with helping Google rapidly scale from a small team to over 150,000 employees, OKRs are now used by companies across industries to dynamically focus people and resources on their most important and ambitious goals.

As a pioneer in OKRs, Intel sought the right Enterprise OKR Management and Strategy Execution Platform for its internal teams, and ultimately invested in that platform.

What is the difference between OKRs and KPIs?

Although both are methods of managing performance, Objectives and Key Results (OKRs) and Key Performance Indicators (KPIs) provide value in very different ways.

OKRs are a strategy execution framework, while KPIs are operating metrics used to measure and track the status of activities.

OKRs help facilitate discussions around what matters most in a given quarter and inherently provide context and communicate priority - i.e. OKRs communicate the company’s or team’s highest priorities over the next 90 days, and how it will allocate human capital to executing those priorities.

KPIs, on the other hand, communicate the progress of a given activity. A company may track dozens or hundreds of KPIs across a company to gauge progress towards its goals.

OKRs and KPIs primarily differ in the following ways:

Objectives and Key Results (OKRs):

Key Peformance Indicators (KPIs):

Strategy Execution Framework

Operating Metrics

3-5 Objectives, 4-6 Key Results

100s of measures

Time-bound, Quarterly

On-going

Focus on “What” and “Why” of work

Focus on measurement of activities

Outcome-oriented

Activity-oriented

Drives focus on the highest priority outcomes

Communicates progress against company activities - does not provide context or learnings

Enables vertical andl lateral alignment

(Not meant as an alignment tool)

OKRs cascade from top and authored locally, by team

Typically authored and managed from top-down

Leading and lagging measures

Primarily lagging measures

How do OKRs work with Agile?

Although both are used to measure progress to plan, OKRs are a strategy execution framework, while Agile is a methodology used to execute iteratively on product development.

Whereas OKRs specifically measure progress towards achieving strategic objectives, Agile does not provide full-cycle visibility into how a given product drives desired business outcomes. In the Agile methodology, there is limited understanding of which Agile projects are critical to drive business value in the quarter.

OKRs, tied to business results, provide an opportunity for teams to step back, look at the bigger picture, and ask how their work contributes to achieving the company's strategy.

Compare the benefits of OKRs and Agile.

Will adopting OKRs require new tools?

Like any new business process or system, there is no one-size-fits-all approach. When implementing OKRs within an organization, leaders must consider their unique company posture, current technology stack, and anticipated needs.

An excerpt from Bain & Company’s Answering Five Critical Questions Executives Ask about OKRs provides an insightful third-party perspective:

“Excel is often used for a first OKR deployment when technical requirements are comparatively low. More specialized tools list the OKRs, track progress scores and verbatims, and calculate averages of these scores, offering a visual indication of progress. Any tool should be accessible and editable by many people and serve as a single, reliable source of truth for the entire organization. For large-scale adoption, more advanced software solutions are important.”

The best OKR tools integrate with your current ecosystem to ensure that Objectives and Key Results are front-and-center while teams are driving progress to plan.

What is OKR software?

Although some teams choose to simply capture their OKRs in static Excel spreadsheets or PowerPoint slides, many fast-moving companies are leveraging dedicated OKR software to capture their priority Objectives and measure progress to plan. Some OKR software integrates with third-party tools including Salesforce, Microsoft Teams, and Jira, enabling teams to dynamically update KRs from external applications.

Ultimately, choosing the right OKR software is completely dependent upon the size and needs of your team. There are many out-of-the-box OKR solutions for small to medium-sized businesses that provide cost-effective repositories for housing and tracking key Objectives and associated Key Results.

On the other hand, large enterprises of more than a thousand employees often find that a more robust and dynamic solution provides greater alignment across distributed teams. A Strategy Execution Platform empowers business units to align on OKRs, while reallocating significant human capital to executing the strategy.

Bain & Company reports -

“Enterprise software provider VMware considered building its own solution but ultimately chose WorkBoard over nine others based on three strengths: its ability to be a consultative, strategic partner in designing VMware’s future; its strong platform features, capabilities, integration, and automation; and its information security and accessibility, which would promote transparency across the broader organization.

Though it’s still early in the implementation, managers report that their team members have a high level of clarity, greater focus on what’s important this quarter, and a strong understanding of how their day-to-day work contributes to the company’s broader priorities, strategy, and vision. One team, for example, has reduced the number of tools it uses by 50%, instead tapping WorkBoard to help complete projects with a measurable impact on the business, while becoming more proactive and working better as a global, distributed team.”

Although VMware chose WorkBoard as its dedicated Strategy Execution Software, leaders must ultimately choose the tool that best empowers their teams to set, align on, and execute the strategy with efficiency and profitability.

Who should lead the implementation of OKRs in a company?

The implementation of OKRs can be most effective when led by leaders who are closest to the strategy and driving its execution - titles may include Chief of Staff, VP of Transformation, Chief Strategy Officer, Chief Information Officer, and of course, Chief Executive Officer.

Ultimately, the most important initial step in successfully driving the adoption of the OKR framework within any organization is getting the buy-in and support from top executives. Regardless of where you sit within the company, it’s critical that your Executive Leadership Team validates the value that OKRs can bring to executing their strategic priorities and fully supports the implementation of this framework.

Remember, setting great OKRs takes multiple quarters to perfect. OKRs are a healthy investment that will pay off exponentially with the right support from the executive team.

Ready to take the first steps to implement OKRs within your organization? Learn more about Planning and Launching an OKR Program.

What are the best practices for setting great OKRs?

OKRs are a strategy execution framework. To use them effectively, organizations and teams must first define their strategy to determine where (and where not) to allocate their teams’ energy and resources.

Secondly, OKRs should be set by the end of the first week of the quarter and no later than 3 weeks into the quarter. This timeline ensures teams have ample time to execute each KR - there’s no time to waste. Therefore, organizations need to dedicate the necessary time at the beginning of each quarter to review learnings from last quarter through OKR Reflect and Resets, and set new OKRs.

  1. OKRs should be focused on the most vital outcomes to achieve in that quarter for the business. Remember, having 15 KRs does not mean 15 activities to do; it means 15 outcomes, each of which requires the team to do many activities.
  2. OKRs sets should include both leading and lagging Key Results. That is, some Key Results will measure a lagging outcome, e.g., deals won in that quarter. Other Key Results should measure the leading drivers of those lagging indicators, e.g., are there sufficient sales opportunities by the end of month 1 of the quarter.
  3. The KRs should be such that, if realized, would move the associated Objective forward.
  4. In the Outcome Mindset, OKRs can be either Aspirational or Committed. Aspirational KRs aim for best possible rather than most probable outcomes and because of that are likely not to reach 100% achievement. However, there may be KRs that must be 100% achieved in the quarter, e.g., financial targets at a public company, and these are Committed KRs as their status is either achieved or not.

Take a holistic approach to OKRs with the Practical Guide to Enterprise OKRs.

Are OKRs set quarterly or annually?

Objectives are designed to describe bold, aspirational goals. As we’ve learned, an Objective describes an ideal future state and should inspire and motivate people with a sense of purpose. This aspirational goal may take multiple months, quarters, or even years to achieve. Therefore, an Objective is not time-bound and may take one quarter or more to complete.

On the other hand, Key Results are specifically designed to described desired outcomes that will be achieved within a given quarter. In other words, teams should set new KRs every 90 days.

Learn more about Writing Great OKRs for the Next 90 Days.

Why do OKRs fail?

Successfully adopting OKRs within an organization takes time and practice. OKRs are a framework for achieving strategic alignmnent across an organization; therefore, where a team or company begins its OKR journey is dependent upon how aligned its people already are. Like any new framework or language, the path to successful OKRs requires iterative learning over multiple months or quarters.

Let’s take a look at six common reasons why OKRs fail:

  • New Name, Same Process - Many companies already have a process for goal-setting. It’s important to understand that OKRs aren’t simply a flashy acronym, they’re a framework for alining your teams and executing the strategy. Simply slapping the ‘OKR’ name on an existing process completely misses the opportunity for greater alignment, increased accountability, and ownership by cross-functional teams. Renaming an existing process as ‘OKRs’ is a recipe for failure.
  • Using the Acronym Without the Intent - No one needs another acronym. No one needs another process. Failing to communicate the value and purpose of OKRs at the outset inevitably leads to marginal buy-in from the greater organization. Start with the need and intent - “Our intent is to greatly increase alignment around our strategic priorities and OKRs provide the framework to define and execute those priorities efficiently, collaboratively, and transparently.” The acronym is secondary to the intention.
  • If OKRs don’t thread through conversations, they become busy work - OKRs capture and communicate the company’s and/or team’s highest strategic priorities. If those priorities aren’t front-and-center during your Monthly Business Reviews, weekly 1:1s, staff meetings, and all-hands, those meetings inevitably become inefficient status updates that are not focused on driving results. Setting OKRs should be a process of deep prioritization. What we align on as the strategic priorities should be front-and-center throughout your operating cadence, not an after-thought.
  • “We tried OKRs once and they didn’t work” - Setting great OKRs and aligning teams takes practice. It’s a process that will inevitably be messy throughout the first first several attempts. Naturally, teams and people initially speak different languages and Objectives and Key Results may not align. But these misalignments simply bring to light the very value and opportunity of OKRs once executed correctly. Remember, OKRs take time and practice to perfect. Great leaders are inherently committed to continuous improvement every quarter. The fastest path to failure is by giving up too early.
  • Set It and Forget It! - OKRs are a bit like getting into great shape. Setting your fitness goals is the first important step. But eating right, exercising everyday, and measuring progress is where the real magic happens. Too many teams set their OKRs at the beginning of the quarter and only measure progress to plan at the very end of the quarter. When it comes to ensuring successful OKRs, there’s no such thing as ‘set it and forget it.’
  • Fear of Cross-Functional Teaming - When people focus on outcomes, rather than activities or prescribed functional roles, new teams inevitably form. These are often cross-functional teams made up of people who are eager to rally around a given outcome. But autonomous teams that don’t require managerial oversight can make some leaders feel uncomfortable. So if you find yourself asking, “Where did all these new teams come from?”, take a deep breath and first ask which outcomes or Objectives are those teams working towards. Are those results meaningful and are these the right people to execute? The common OKR language of aligning on results allows these teams to establish accountability, embrace autonomy, and execute without the need for oversight from a manager. Embrace the new-found alignment of OKRs!

Learn more about how OKRs are part of the Strategy Execution Stack and why OKRs most commonly fail.

5 Common OKR mistakes to avoid

Defining and aligning on great OKRs takes practice. It’s an iterative learning process that takes multiple quarters to perfect. OKRs take time, effort, and intentionality to improve every quarter. “The key to the process is clarity of intent,” as Brian Hull, VP Strategic Initiatives at DataRobot put it.

In the meantime, we’ve here are the most common - and completely avoidably - OKR mistakes:

  1. Set and forget:
    OKRs are designed to inform your day-to-day priorities. Therefore, they’re meant to be referenced multiple times per week, at minimum. Think of OKRs as a muscle that needs to be exercised to grow and strengthen. The most common mistake that leaders make is failing to make OKRs front-and-center of every conversation. Whether you’re running a staff meeting or weekly 1:1, OKRs should frame the conversation around the right outcomes.
  2. Check the box:
    Similar to set-and-forget, some teams simply focus on getting OKRs “done” and overlook that tremendous opportunity for OKRs to motivate and align teams.
  3. No validation:
    OKRs ensure every team member has clear visibility into the cross-functional priorities. A clean tie-off ensures everyone understands how their work contributes to achieved the desired outcome.
  4. Focusing on Ouputs, rather than Outcomes:
    Thinking in terms of desired outcomes, rather than activities, takes practice and often requires a bit of coaching. Without proper coaching and consistent support, OKRs can quickly become simple task lists. Explore our Outcome Mindset™ Course for strategic leaders.
  5. Buried OKRs:
    The best results come from weekly attention to KRs. Without a Strategy Execution Platform, large and distributed organizations can easily find their OKRs in static Excel spreadsheets or PPT slides, buried under to-do lists. A Strategy Execution Platform can provide enterprises a digital source of truth across the entire organization. Hear Microsoft’s journey from outdated PPT slides to cross-functional alignment.

To further explore common OKR mistakes, read What Goes Wrong with OKRs?

What are the best OKR Trainings and Certifications?

All OKRs aren't created equal. Setting great OKRs each quarter takes patience, iteration, and a bit of vulnerability. Before diving into it can be highly valuable to learn from those who have been testing and driving OKRs for years.

While there are many free and recorded OKR trainings available to the public that can provide an initial introduction to the OKR framework, the prior experience of the instructor and the quality of the community may ultimately determine the success of your OKR journey. It’s important to find an OKR Training or Certification Program that aligns with your intentions of successfully introducing OKRs to your team or company.

WorkBoard, in particular, incorporates a unique outcome-focused approach throughout its courses. The Outcome Mindset Method™ is a team-centric approach that unlocks ambition and fosters inherent ownership and accountability.

Some of the things you may learn in an OKR Training or Coaching Session include how to:

  • Mobilize and motivate the organization to its best possible results
  • Empower vertical, lateral, and cross-functional alignment
  • Build rapid iteration and learning cycles into your OKR processes
  • Linking OKRs and operating rhythm to raise the pace of focus and results

Explore OKR Trainings and Certifications from the Results Foundry, including WorkBoard’s OKR Coach and Results Leader Certification Programs.

Additional Learning

Vikas Butaney, Cisco

Bringing Strategy to Life with OKRs at Cisco

with Vikas Butaney, Chief Product Officer and VP/GM, Cisco and WorkBoard CEO Deidre Paknad

The Future of Alignment: OKRs for Strategy Execution

The Future of Alignment: OKRs for Strategy Execution

with Gee Rittenhouse, CEO, McAfee Enterprise and WorkBoard CEO Deidre Paknad

The OKR Podcast

The OKR Podcast

Featuring leaders from Google, Cisco, IBM and more

Master Class on OKRs

Master Class on OKRs

with Margo Georgiadis, Former President, Google

Transparency and Focus to Usher DataRobot to the Next Stage of Growth

Unlocking Faster Strategy Execution with OKRs

Brian Hull, VP Strategic Initiatives, Office of the CEO, DataRobot

OKRs and the Outcome Mindset Method

OKRs and the Outcome Mindset Method

Free 1-hour introductory course