What are OKRs?

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for MBRs often requires days or weeks of manual reporting that culminate in a series of static PowerPoint slides and outdated Excel spreadsheets.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.

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.

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:

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.

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.

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.

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.

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.