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The ABCs
of OKRs
Everything You Need to
Start, Create, Use, and
Manage Objectives and
Key Results

By Paul Niven, Global OKR Coach

Table of Contents
Introduction...................................................3 Creating and Using.......................................13 • Should OKRs include business-as-usual
work?
• What are OKRs? • Who should create OKRs?
• How do we know we’ve chosen the right
• Why should we use OKRs? • How often should we update OKRs; what is OKRs?
the right cadence?
• What’s the difference between SMART goals • How do OKRs connect?
and OKRs? • How do we get off to a good start with
OKRs?
• What’s better: Balanced Scorecard or OKRs? Managing......................................................32
• How do you write effective OKRs?
• Are OKRs a management fad? • What is a “typical” OKRs cycle?
• What is an example of a good OKRs
objective? • How often should we review OKRs?

• Can objectives be quantitative? • How do we make OKRs a habit?

Preparing to Use/Getting Ready..................8
• How do you write a good key result? • How do we improve OKRs meetings?
• What is an OKRs “Champion”?
• What are examples of good key results? • How do you make OKRs stick?
• What is an OKRs “Ambassador”?
• When do you know you have enough key • Should we link OKRs to incentive
• Should we hire an OKRs coach? compensation?
results?
• Do you need a mission and vision to create • Should we link OKRs to performance
• How many key results should you have?
OKRs? reviews?
• Are there different types of key results?

• How do we create value-based key results?

• Do you include tasks when setting OKRs?

• How many OKRs should you have?

• How many key results should you have?

• What is the difference between committed

and aspirational OKRs?

The ABCs of OKRs 2

Introduction

The ABCs of OKRs 3

What are OKRs?
OKRs (Objectives and Key Results) is a simple
yet powerful goal-setting system relied upon by
organizations around the world to drive (among
other things) focus, alignment, and engagement.
The system consists of objectives (what you want
to achieve) and key results (quantitative statements
that measure the achievement of your objectives).

How does such a simple methodology drive such

outsized benefits?

Easy: OKRs operate differently from most goal-setting systems.

First of all, OKRs are established, monitored, and updated
frequently, typically on a 90-day cycle (although that can vary
depending on your circumstances). This frequent cadence allows
organizations to be agile in response to what’s happening in their
environment. Second, OKRs demand a relentless focus on what
matters most right now in driving your business forward; whether
it’s working more effectively to solve customer issues, improving a
manufacturing challenge, or hiring the right mix of people to take
your business to the next level. OKRs ensure you’re working on the
most strategic drivers of success.

We can trace the idea of OKRs to the pioneering work of

management guru Peter Drucker through Intel in the 1970s, all the
way to the founding of Google in 1999. Today, the system is relied
upon by innumerable organizations of all types and sizes.

The ABCs of OKRs 4

Why should we use OKRs?
Studies tell us the vast majority of organizations fail to
execute their strategies. Estimates vary, but on the low end
it’s suggested just 10% of companies achieve the goals in
their strategic plans. When implemented well, OKRs can
shift those odds dramatically back in your favor. Outlined
below are just a few reasons you should consider OKRs.
Strategic focus: OKRs demand that you identify just the vital few drivers of
strategic impact and success. When selected with rigor, OKRs help you avoid
time-consuming and costly distractions by highlighting the goals that will
actually get you to the next level. This requires disciplined strategic thought,
but the rewards — in the form of consensus on the true levers of your
company’s success — far outweigh the effort.
Alignment: A first test of every OKR is its ability to impact overall strategy.
Each OKR chosen should have the potential to move the needle on the
desired company direction. We call that strategic alignment. A second
type of alignment is horizontal; in other words, how well your company
works together cross-functionally. As teams create OKRs, they will identify
dependencies on other teams. These will lead to powerful and strategic
conversations highlighting opportunities and reducing redundancies.
Generating horizontal alignment is one of the greatest attributes of OKRs.
Engagement: OKRs are never created in a vacuum. Rather, they result from
spirited debate and discussion among teams with their bosses regarding
what priorities they should be pursuing, and why. These conversations are
strategic in nature, elevating everyone’s knowledge of the company’s “north
star” goals. Increasing knowledge of strategy, and providing a means to
meaningfully impact it, drives employee engagement.
What’s the difference between
SMART goals and OKRs?
The acronym SMART, and the associated method of goal
setting, can be attributed to a 1981 paper by George T. Doran.
In the nearly 40 years since that time, SMART goals have
maintained a consistent popularity in management circles.
Typically (and I’ll return to that word shortly), the letters stand for: Specific,
measurable, attainable, relevant, and time-bound. I said, “typically,”
because over the years various definitions have been applied to some of the
SMART letters. For example, the “R” can represent results-based, realistic,
or reasonable.
A well-written OKR has much in common with a SMART goal.
For example, objectives and key results both must be specific to drive the
actions necessary for achievement. Each of the other elements of SMART
goals are always present with OKRs as well. The difference between the
two is primarily one of scope. SMART is a stand-alone idea that has no
accompanying structure. It’s more a helpful rule of thumb than a rigorous
strategy execution system.
While OKRs are touted as an “open-source” methodology — gathering the
best ideas from global practitioners in order to constantly evolve, there is
a set of underlying management practices associated with the framework
that are absent from SMART goals. Robust OKRs systems are governed
by a carefully crafted management review cadence, use a cadence that
recognizes the operating reality of the organization, and constantly challenge
the status quo by focusing on stretch targets.
The ABCs of OKRs 5
What’s better: Balanced Scorecard or OKRs?
OKRs have achieved immense acclaim and popularity in a
relatively short span of time, and little wonder given the
benefits the system is able to generate: focus, alignment,
and engagement being just a few.
But before OKRs, the “hot” performance measurement framework was
the Balanced Scorecard. The methodology is still used by thousands of
organizations around the world to help execute their strategy.
So which is better? Let’s start by looking at the two key
differences between the systems.
A Balanced Scorecard is just that — balanced. Organizations define
objectives (the same as objectives in OKRs) and measures (same as key
results in OKRs) in four distinct yet related perspectives of performance:
financial, customer, internal processes, and learning and growth. The
premise behind this schema is that by using these four perspectives, you’re
telling a complete and coherent story of your organization’s success. OKRs,
by contrast, don’t adhere to any perspectives or lenses. Instead, the OKRs
mantra is: “What’s most important right now, and let’s measure that.”
Back to our original question — which is better?
Rather than choosing one over the other, it would serve us more
practically and effectively to look at how we can combine the strengths
of both systems to create exponential value. Here’s how: At the top of the
organization, to set context for all levels below, it’s vital to tell the coherent
story offered by the four-perspective model. This results in what is termed a
“Strategy Map.” These objectives and measures serve as high-level goals the
company is striving toward, and are necessarily more long term in nature —
typically annual. For the rest of the organization, agility is key, and thus OKRs
are a better fit. As noted above, OKRs are normally (but not always) set on
a quarterly cadence, providing business units and teams the opportunity to
consider what’s taking place in their organizational orbits and choose the
most important objectives and key results necessary to make strategic leaps
forward. When used in unison, the two frameworks offer unprecedented
potential for strategy execution.
For more information on the concept of linking the Balanced Scorecard with
OKRs, see our white paper “Two Speed Execution” here.

A second difference is cadence. Most Scorecard practitioners will set

objectives and measures for an entire year, whereas OKRs are typically set,
analyzed, graded, and reset on a quarterly basis. This is a key advantage
of the OKRs framework — the ability to introduce agility into the strategy
process by critically examining your operating environment each quarter and
making necessary adjustments.

The ABCs of OKRs 6

Are OKRs a management fad?
The short answer is no. If you’d like a slightly longer answer, read on.
If you Google the word fad, you’ll find
this less-than-flattering definition:
an intense and widely shared
enthusiasm for something, especially
one that is short-lived and without
basis in the object’s qualities; a
craze. We can all agree there is
certainly intense and widely shared
enthusiasm for OKRs at the moment,
but it is another component of the
definition that saves OKRs from the
fabled scrap heap of management
fads. Specifically, “without basis in
the object’s qualities.” The subtext
here is that whatever the fad is, there
is no underlying value in the notion,
concept, or thing represented. Not so
with OKRs.
Let’s take a short stroll back to the time of hula hoops and drive-in theaters —
the glorious 1950s.
In 1954, seminal management guru Peter Drucker unleashed onto the world a tome that is
nearly every bit as relevant today as it was 70-odd years ago. The book is titled The Practice of
Management and in it Drucker outlined what was then a revolutionary idea for the staid and
relatively predictable 1950s: Management by Objectives (MBOs). Here’s how he describes the
system: “Each manager, from the “big boss” down to the production foreman or the chief clerk,
needs clearly spelled-out objectives. These objectives should lay out what performance the man’s
own managerial unit is supposed to produce. They should lay out what contribution he and his
unit are expected to make to help other units obtain their objectives. Finally, they should spell
out what contribution the manager can expect from other units toward the attainment of his own
objectives ... These objectives should always derive from the goals of the business.” Hopefully we
can forgive Drucker for his exclusive use of male pronouns — it was the ’50s, after all.
Drucker’s expectation was that organizations would use MBOs to foster cross-functional
cooperation, spur individual innovation, and ensure that all employees had a line of sight to
overall goals. Does any of that sound familiar? The OKRs framework we hold a “widely shared
enthusiasm” for is a direct evolution of ideas put forth by Drucker more than half a century ago.
If I thought you might have the stomach for more history lessons, I’d bring up the French system
“Tableau de bord,” or regale you with tales of Abraham Maslow. What you’d find is the foundational
notions present in OKRs have been with us for well over a hundred years. We’ve simply codified
and, through enhanced global communication, shared and improved upon these thinkers’ ideas.
So, no, OKRs are not a fad. They are based on the soundest of management thinking and practice.
The ABCs of OKRs 7
Preparing to Use/
Getting Ready

The ABCs of OKRs 8

What is an OKRs “Champion”?
Chapter one, page one of any book on executing change
will tell you that executive sponsorship is a make-or-break
ingredient of success. That’s true for OKRs as well.
However, it’s unlikely your CEO, juggling as many plates as they typically are,
will serve as the on-the-ground leader of your OKRs rollout. As a result,
there is another resource that may be almost as critical to OKRs success,
and that is the OKRs Champion. This person (or it could be a small team,
depending on the size of your organization) is the driving force behind your
OKRs program, and absolutely vital to its success.
The champion will wear a lot of OKRs-related hats. Here are some of the
responsibilities he, she, or they will hold:
In our experience, a talented OKRs Champion can almost single-handedly
drive the success of an OKRs program. So, what makes a great Champion
and where do you find this gem? First, the where: It could be anyplace
in your organization. We’ve seen Champions hailing from operations,
HR, strategy, and finance, among other areas. As for what makes a great
Champion, experience with performance measurement is helpful, and great
communication skills are a must. You also want someone senior enough
to be able to get people’s attention when necessary. But, maybe above all,
passion and enthusiasm go a long way. Find someone who deeply cares
about this process and you’re well on your way to sourcing a change-
leading Champion.

• Work with the executive team to establish OKRs timelines (when OKRs
are to be set, reviewed, scored, etc.)

• Serve as in-house subject matter expert for OKRs (read books, articles,
attend webinars, liaise with consultants, etc.)

• Lead in-house OKRs training programs

• Act as lead administrator for OKRs software (if applicable)

• Be the lead resource for developing OKRs communications

• Track progress against overall plan

• Serve as initial escalation point for OKRs issues

• Research and provide input to executives on potential OKRs linkages,

e.g., performance reviews and incentive compensation

• Galvanize support for the OKRs implementation

The ABCs of OKRs 9

What is an OKRs “Ambassador”?
In a separate post, we discussed the necessity of an OKRs Champion
to drive your implementation. Even if that person possesses superhero
capabilities, it will be difficult for them to ensure that your OKRs success is
sustained for the long term. To do that, you need to cast the net a bit wider
and seed OKRs “Ambassadors” throughout the organization.

Ambassadors are responsible for evangelizing, and

becoming an internal OKRs expert, for their designated
group or department. If the group is struggling with any
part of the process — creating OKRs, reporting, scoring,
anything — the first line of defense is the Ambassador.
They can be thought of as an OKRs “super-user,” helping
their team take full advantage of all OKRs have to offer.
The word “evangelizing” was used in the previous paragraph, and that
function represents an important part of the Ambassador’s job. Let’s face
it: Most employees are change-weary already, and despite the lightweight
nature of OKRs, at the end of the day it’s still yet another ask. Therefore,
Ambassadors need to not only provide tactical guidance but also sell the
OKRs program. That makes the selection of Ambassadors critical. Why?
Research demonstrates that employees aren’t most influenced by senior
leadership, but instead it’s people in less formal roles who can often sway
their opinions one way or the other. When selecting Ambassadors, look for
people who have strong connections throughout your group and beyond.
Their communications savvy, wide networks, and outsized influence can go
a long way to bending the OKRs curve in your favor.

The ABCs of OKRs 10

Should we hire an OKRs coach?
When I was growing up in the late 1970s there was a TV commercial from FRAM oil filters
that left a lasting impression. In the ad, they warned, “You can pay me now, or you can
pay me later.” In other words, buy a good filter now, or buy a cheap one, find it doesn’t
work, and you’ll be back to pay me later, your pockets a little lighter in the meantime.
This axiom is probably the only thing OKRs have in common with oil filters.

One of the biggest benefits of the OKRs methodology is ease of

understanding; it’s a simple and lightweight framework. But, simple
doesn’t mean simplistic, as thousands of organizations struggling Ready to look for a coach?
with OKRs have discovered.
At this point, I’ve lost count of how many inquiries on our website begin with something Be sure to do your due
like: “We started using OKRs last year, and it’s been a rocky road from the start ... ” diligence. Make sure they
It’s hard to write this and not seem self-serving, since OKRsTraining.com is a coaching have lots of experience,
company. But you can pay me now, or you can pay me later.
varied skill sets, and will be
There are many benefits of hiring an OKRs coach, such as:
a good cultural fit for your
• Experience: For example, we have well over 300 implementations under our belts.
organization.
There’s not much we haven’t seen in the last 20 years of doing this, and clients
benefit from that historical storehouse of knowledge.

• Know-how: This is related to experience, but slightly different. A good coach has
proven training and facilitation methods that will speed your implementation and
improve your return on investment.

• Knowledge transfer: One of the paybacks of working with a good coach is the
lessons and knowledge they can pass on to your internal OKRs Champion and
Ambassadors. Remember the old adage: Give a man a fish and you feed him for a
day. Teach him how to fish and you feed him for a lifetime. That’s what a good coach
can do for your OKRs program.

The ABCs of OKRs 11

Do you need a mission and vision to create OKRs?
If you’re reading this, kudos to you! Many people see the
words mission and vision, their eyes glaze over as a Dilbert
cartoon comes to mind, and they’re off to the next topic.
But these things matter! Two quick stats (we could have
provided a lot more):
80% From Boston Consulting Group: In a 2018 survey of people
expect CEOs in 28 countries, about 80% of people said they expect CEOs
to be visible
to be personally visible in sharing the company’s purpose,
and around 75% want CEOs to discuss how their company
benefits society.
2x And from a Harvard Business Review article: In a survey of
as important 540 employees by PwC, employees considered purpose to
as traditional
be more than twice as important, on average, as traditional
motivators
motivators such as compensation and career development.
Convinced this is important? Great, read on.
As is often the case in these articles, let’s start by defining our terms. A
“mission” describes the core purpose of the organization, why it exists
(beyond simply making a profit if you’re a for-profit company). The mission
also reflects employees’ motivations for engaging in the company’s work.
Interestingly, corporate charters of the 19th century were regarded as a
privilege — and with that privilege came the corporate obligation to serve
the public interest. Even in today’s Wall Street numbers–driven markets, the
mission statement should describe how an organization is indeed serving
the public interest and why it matters. The mission should be written to
stand the test of time — maybe 100 years. It typically doesn’t change. Here’s
an example from Marriott: to make people away from home feel that they
are among friends and are really wanted.
A vision statement provides a word picture of what the organization intends
ultimately to become — which may be five, 10, or 15 years in the future. This
statement should not be abstract — it should contain as concrete a picture
of the desired state as possible. Whereas the mission should be qualitative,
a powerful vision often contains numbers that reflect the organization’s
future aspirations. For example, way back when Starbucks’ vision was 2,000
stores by 2000.
OK, now on to the question at hand: Do you need a mission and vision
to create OKRs? It’s a difficult question to answer easily and breezily,
because like so many other things — it depends. If you’re creating OKRs at
any level of the organization below the C-suite, what you need more than
anything else is context. It’s crucial you understand where the company
is going so that you can draft OKRs signaling your unique contribution to
that destination. At the very least, all companies should have some sort
of strategic plan or strategic themes that will provide the much-needed
context for lower-level departments, teams, and individuals to align with. In
the absence of a strategy, you’re flying blind, attempting to determine what
you should focus on without the aid of guidance from the top.
In an ideal world, every organization should have not only a strategic plan,
but a mission that outlines their core purpose, and a galvanizing vision
everyone can rally around. Getting back to our question: Technically, you can
develop OKRs without a mission or vision, but only if some other level of
necessary context (in the form of a strategy) exists.
The ABCs of OKRs 12
Creating and
Using

The ABCs of OKRs 13

Who should create OKRs?
When creating OKRs, you have many choices on where to
build them, and who to involve. The advice appearing below
is summarized from the book Paul co-wrote on OKRs.
Company-level Only
For many organizations this will be the most logical choice. Starting
at the top has a number of benefits: It clearly communicates what
the organization is most focused on, demonstrates commitment and
accountability on behalf of the executive team, and provides the means
for later development of OKRs at lower levels of the firm. This approach
“eases” the company into OKRs, giving all employees the time to digest the
idea and witness how it can help transform results. Especially if you’ve had
difficulty launching change efforts in the past, this alternative has merit
because it will be less threatening to employees. You’re only rolling out at
the corporate level initially and employees will have time to adjust to the
idea as you show early benefits.
Company and Business Unit or Team
A more ambitious approach is to launch OKRs at the company and business
unit or team level. By business unit or team, we’re referring to any group
that reports to a senior executive — your terminology may differ. The
implementation won’t be simultaneous. Rather, we would expect overall
company-level OKRs to be created, and once they have been widely
communicated, business units or teams will create their own OKRs that
demonstrate their alignment to overall goals. Most important, this method
ensures the company-level objectives have been carefully selected and are
well understood, since they will provide the critical input for business unit
or team OKRs.
Do you have individual OKRs?
There are pros and cons to individual OKRs. On the positive side of the
ledger, we have the opportunity to create a line of sight from a person’s
job back to the company’s strategy through the creation of OKRs. That
connection not only enhances alignment, but for many employees, will
increase engagement as well. On the downside, however, there is the very
real possibility that individuals use OKRs as a glorified task or to-do list and
it becomes a bureaucratic exercise. Their individual contribution may be so
“micro” in nature that it’s difficult to show true business-impact key results
every 90 days. Determining whether individual OKRs are right or wrong for
you depends on a number of factors: your size, culture, and history with
performance measurement, to name just a few.
Pilot at a business unit or team
In an attempt to limit risk, some organizations choose to begin their OKRs
program at the business-unit or department level. They utilize a pilot
approach to demonstrate proof of the concept, show quick wins, and
generate enthusiasm for a broader rollout. The unit or team you choose will
require a leader who deeply understands the inner workings of OKRs and
believes in the ability of the framework to generate real business results
(yet another way of saying sponsorship, but at a lower level). We’ve seen this
approach pay dividends when the pilot group does indeed generate quick
wins, capturing the attention of other groups eager to mimic their success.
The danger in this choice is ensuring the pilot team selects OKRs that are
achievable. Should they set unreachable goals and fail miserably on their
OKRs, this may scare off others worried that OKRs “don’t work.”
The ABCs of OKRs 14
How often should we update OKRs;
what is the right cadence?
The “standard” advice for setting, monitoring, and evaluating OKRs is
90 days (quarterly). Early adopters to the framework gravitated to this
cadence, and there does appear to be some magic to the 90-day window.
With disciplined planning and execution, 90 days is long enough to achieve significant business
impacts, but it’s also short enough to allow for agility in your approach to goal setting. This
interval provides you with the opportunity to stop each quarter and carefully assess what is
happening in your environment. Has a key customer defected? Maybe a competitor launched
a breakthrough new product demanding a response. Or, perhaps your growth is forcing swift
hiring and onboarding processes not currently in existence. Any of these, and countless other
circumstances, would inform your next set of OKRs. Remaining agile in your approach to
strategy and goal setting is an undisputed plus in our hyper-competitive world.

The word standard shown above appears in quotation marks for a reason, however. As with
most aspects of the OKRs system, there is no absolute correct cadence for every organization.
At OKRsTraining.com, for example, we have clients that employ trimesters (four-month periods)
and others who update their OKRs semiannually. Additionally, many organizations will employ
dual cadences, adopting an annual cycle for company-level OKRs, and a shorter cadence for
execution throughout the year.

Selecting a cadence that’s right for your organization is a decision only you and your team
can make. Considering what cadences other organizations use, and why, is always a helpful
piece of due diligence, but choosing quarterly OKRs “because Google does it that way” is not
a valid reason. To make an informed decision, think about how fast things are changing in your
environment — the higher the velocity of change, the greater necessity for strategic agility.
Also consider the cultural dimensions of your decision — do you have a history of performance
measurement? If so, what cadence have you used, and has it been effective?

The ABCs of OKRs 15

How do we get off to a good start with OKRs?
Writing in “The Republic,” Plato recognized what most of us know, but often neglect at our own peril:
The beginning is the most important part of any work. Regardless of your domain, getting off to a good
start is critical to realizing ultimate success. That certainly applies to OKRs. Here are three ways to get
your OKRs program on the right track from the very beginning.

1 Know, and communicate widely,

why you’re using OKRs.
2 Appoint an OKRs Champion
(or Champions).
3 Invest in upfront training.

At the end of the day, OKRs are another change
program, and that attention ask is often a
difficult one for employees in today’s change-
weary companies. If you expect people to
utilize OKRs to full effect, the first priority is
clearly spelling out your business rationale
for implementing the framework. And a hint:
“Because Google did it” isn’t an appropriate
response. What problems are you trying to
solve, and how do you see OKRs providing the
solution? Don’t keep that a secret — shout it
from the rooftops!
As noted above, OKRs are about change, and
you need a trustworthy guide on this journey.
Someone who will serve as the go-to source
for all things OKRs at your organization. This
person or small team (depending on your size)
must fully immerse themselves in OKRs and
become your in-house subject matter expert.
The Champion will be the first point of contact
on important decisions like determining your
OKRs cadence, meeting and review schedules,
and thorny issues such as whether to link OKRs
to your performance appraisal process. It goes
without saying that you also require executive
sponsorship for a successful implementation.
However, it’s unlikely your CEO will play the role
of champion. Find someone with passion and
enthusiasm for the topic and watch the spell
they cast on their colleagues.
No, this is not a shameless plug for our services
— despite the fact that our company is called
OKRsTraining. Rather, it’s an acknowledgement
of what we see in the field day in and day out:
organizations that rush into OKRs because it
seems easy and expect everyone to create their
own with zero education on the fundamentals.
What often results are vague, poorly written
objectives that fail to articulate the business
value they hope to achieve, along with feeble
key results that say nothing of how the evidence
of success is to be demonstrated. The good
news here is that you don’t require months or
even weeks of training to master the model.
A few sessions with an experienced trainer
or coach will have you on your way to better
results in a jiffy.

The ABCs of OKRs 16

How do you write effective OKRs?
That’s easy! To begin, follow these formulas.

Some people will bristle at formulas like this — they’re

Objective: too pedantic, too paint-by-number. But following them
will help you in at least two critical ways:

Verb + what you’re going to do/aspire to do +

in order to/so that (business impact)
THEY’LL ENSURE CONSISTENCY ACROSS YOUR
Example: Increase attendance and engagement at our annual user
conference in order to drive customer renewal rates
1 ORGANIZATION.

Everyone talks about OKRs driving transparency.

But to do that, you’ve got to be operating from
the same playbook. Formulas ensure that.
Key Result:

THEY MAKE OKRS CREATION (ESPECIALLY KEY

Verb + what you’re going to track + from x to y
2 RESULTS) EASIER.
Examples:
If you take the time to carefully consider the
1. Increase paid conference attendance from 500 to 1,000 people business impact of your objective, you’ve
identified at least one key result you know you
2. Increase percentage of attendees who rate the conference at
must track. In the example on this page, key
4 or 5 out of 5 from 85% to 95%
result No. 3 is directly translated from the “in
3. Increase customer renewal rate of conference attendees from order to” of the objective and demonstrates
70% to 90% business impact.

The ABCs of OKRs 17

What is an example of a good
OKRs objective?
A well-written objective is composed of three parts:
1. Start with a verb. Objectives are action-oriented, and therefore must
start with a verb.
2. What you’re going to do. This is the aspirational component of the
objective.
3. “In order to” or “so that.” This last piece is critical because it describes
the business impact you hope to achieve with the objective.
Example: Reduce mobile app crashes in order to improve the
user experience
Beyond sticking to the formula above, good objectives
should be:
• Meaningful to you: The more you care about an objective the more likely
you are to achieve it.
• Aspirational but attainable: Stretch yourself, but not beyond the
impossible.
• Mostly controllable by the team: “Mostly,” but sometimes you need
help with an objective, and that can result in shared OKRs, which drive
cross-functional collaboration.
• Doable in the time period: However, some objectives will roll over to the
next period, and that’s OK as long as you update your key results.
Can objectives be quantitative?
Here’s our definition of an objective: a statement of a
qualitative goal designed to propel the organization forward
in a desired direction. The word “qualitative” should give
you a hint as to whether we think objectives can have
numbers. Answer: They shouldn’t.
Our definition of a key result is this:
A quantitative statement that measures achievement of the objective. The
key result always provides evidence of whether you’ve met the objective. So
if your objective is, for example, “increase sales by 20%,” you’ve included the
key result in the objective. What’s left for the key results at that point? You
could use them to document how you’ll achieve the 20% sales increase, but
again, documenting tasks or activities isn’t the purpose of a key result.
Another issue with objectives using numbers, is that they
lack context.
Consider the example above, why do we want to increase sales? I know it
seems obvious, every company on the planet wants to grow their sales, but
what’s your particular reason? Are you losing relevance in your markets? Are
feisty competitors nipping at your heels? Are you looking to grow market
share? By determining your rationale, you open yourself up to the possibility
of numerous key results, which, in the end, will prove more meaningful in
the execution of your unique strategy.
The ABCs of OKRs 18
How do you write a
good key result?
A well-written key result is composed
of three parts:
1. Start with a verb: Indicates the “direction”
of your key result, e.g., increase, decrease,
grow ...
2. What you’re going to track: Could be
dollars, a raw number of something, a
percentage, etc.
3. From x to y: This component shows the
level of stretch in your key result, and
provides much-needed context. Imagine
you have a key result like this: Increase net
promoter score to 60. Is 60 a stretch? What
if NPS was 59 in the last quarter? That’s not
much of a leap. But if it was 5 in the prior
period, now we’re talking! We need to see
the ambition in the key result to judge its
effectiveness.
What are examples of good key results?
Let’s start with creating key results for the objective that we created previously.
Objective:
Reduce mobile app crashes in order to improve the user experience
Key Results:
1. Create a list of the most frequent categories of app crashes by Feb. 1
2. Provide patches for top five identified crash categories by Feb. 28
3. Reduce number of mobile app crashes from 400 to 200
4. Increase user satisfaction with the app from 80% to 90%
Did you notice the first two key results don’t have an x to y? They’re “milestone” key results.
You’ll often require milestone key results as “drivers” or “leading indicators” of your metric key
results. Milestone key results are perfectly acceptable assuming you include a date (that’s how
you stretch yourself) and accompany them with metric key results showing business impact.
Key results should be:
• Quantitative: And yes, a date in a milestone key result counts.
• Aspirational but attainable: Stretch, but keep it in the bounds of possibility.
• SPECIFIC: This is in caps because it’s that important. Make sure everyone understands what
you mean by every word in the key result.
• Able to drive the right behavior: Think carefully about what behavior your key results could
lead to.
The ABCs of OKRs 19
When do you know you have
enough key results?
You should have as many key results as necessary to prove
success on the objective, but no more. Key results are
valuable real estate in the OKR world, and you don’t want
to clutter that space with tasks and to-dos.
Your goal in creating key results should be to “tell the story” of your success
on the objective. Let’s look at an example, then we’ll explore this further.
Objective:
Reduce mobile app crashes in order to improve the user experience
Key Results:
1. Create a list of the most frequent categories of app crashes by
Feb. 1
2. Provide patches for top five identified crash categories by Feb. 28
3. Reduce number of mobile app crashes from 400 to 200
4. Increase user satisfaction with the app from 80% to 90%
Notice how the four key results on this page combine to tell the story
of success on the objective. The objective focuses on reducing crashes
in order to improve user experience with our app. Ultimately we want
to demonstrate that we’ve done that — reduced crashes and increased
user satisfaction. But we don’t start there — those are the endpoints
in our story. How do we get there? We think about the early chapters
in our story — the drivers of those outcomes. In this case, we need
to learn more about the crashes occurring and categorize them by
frequency, that’s key result number one. Then we’ll find a remedy for
those troublemakers, that’s key result number two. Now we’re ready to
document success metrics — those are the final two key results.
Forget the “rules of thumb” you find on the web that advise three to five
key results for each objective. What stone tablet did that come down
on? Instead, use the story metaphor and it will always help you craft key
results. Sometimes you’ll need four as shown above, but it could be less,
or it could be more. Once you’ve written your objective (assuming you’ve
followed our advice of including business impact in it), you know the end
of the story. Now work backward to weave the entire compelling tale.
The ABCs of OKRs 20
How many key results should
you have?
How many key results should you have?
Six. The answer is always six.
No, we’re totally kidding! There’s no one right answer to the question of how
many key results you should have for a given objective. If you search the web
for information on the topic, you may find a consensus answer of three to
five. However, that number is not written on a stone tablet somewhere, and
to be honest, we have no idea how it became such a popular response.
Here’s the real answer to the question of how many key results you
should have: as many as necessary to tell the story of your success on
the objective. The key word in that last sentence is “story.” Let’s use an
example from a startup vegan ice cream company (yes, they do exist) to
walk through this idea.
Objective: Increase our presence in local grocery stores in order to
increase market share
Since the objective is written using our recommended formula of verb +
what we want to do + in order to/so that (business impact), we know right
away that increasing market share is the ultimate value-based or business
impact key result we’re striving for. So let’s start with that: Increase market
share from 1% to 10%.
You may say, “That measures the business impact, so isn’t that the only
key result they need?” Good question, and the answer is no, because if this
were the only key result, they would have to wait until the end of the period
to see whether it’s achieved. We need to supplement it with “leading” or
“driving” key results that will help us assess progress during the quarter
toward our ultimate key result of increasing market share.
In this case, they could be:
• Produce new marketing and branding collateral for distribution to target
stores by Jan. 15
• Meet with 200 store managers; desired meeting outcomes: Deliver
our brand story, share our positive taste test results, and receive a
commitment from them to test our product for at least one week
• Increase the number of grocery outlets we sell to from 25 to 100
The key results now tell the story of our success.
The first thing our young ice cream company needs to do in order to
ultimately increase their market share is to produce new marketing and
branding collateral to showcase their product. This is a classic “milestone”
key result and as all milestone key results should, it includes a date for
completion. Armed with the marketing collateral, their next key result
challenges them to meet with 200 store managers. But the key result
above doesn’t stop there, it provides specifics on desired meeting
outcomes. Specificity is probably the most important attribute of an
effective key result.
We won’t bore you with the science, but there is plenty that suggests the
more specific a goal, the more likely you are to achieve it. Now that they’ve
produced their new marketing material and met with store managers, the
final two key results track their results — increasing the number of outlets
they sell to, and increasing their market share. Notice how these four key
results weave together to tell the story of success. Hope that makes sense
— have to go now, suddenly have a craving for two scoops of rocky road
(vegan, of course).
The ABCs of OKRs 21
Are there different types of
key results?
Yes, there are at least two types of key results: metric
and milestone. Let’s use the example below to illustrate
the two.
Objective:
Reduce mobile app crashes in order to improve the user experience
Key Results:
1. Create a list of the most frequent categories of app crashes by
Feb. 1
2. Provide patches for top five identified crash categories by Feb. 28
3. Reduce number of mobile app crashes from 400 to 200
4. Increase user satisfaction with the app from 80% to 90%
The first two key results are what we call “milestones.” These are binary —
you either did it or you didn’t — key results. You’ll often require milestone
key results as “drivers” or “leading indicators” of your metric key results.
Milestone key results are perfectly acceptable assuming you include a date
(that’s how you stretch yourself) and accompany them with metric key
results showing business impact. Speaking of which, key results 3 and 4 are
metric key results. These are what we think of when we typically consider
key results. Here we’ve used actual numbers — whether percentages, dollar
amounts, or raw numbers — to demonstrate achievement of the objective.
Did you notice we said “at least two types” of key results above? There
are times when you won’t be able to measure the business impact of your
objective in the current period. Maybe it will take four months to see results,
maybe longer. In that case, you may want to “carry forward” the business
impact key results to a subsequent period. That’s OK because you always
want to go back and ensure you’ve measured the business impact of your
objective, regardless of when that happens.
The ABCs of OKRs 22
How do we create value-based
key results?
Before answering the question, let’s define what we mean
by a “value-based” key result.
There’s a reason you’re aiming high in the objective — because you want to
dramatically improve your current situation or make a 10x improvement in
something that matters to your business. It’s not enough to dream big when
concocting the objective. You have to match that aspiration with a key result Now we can answer this question:
showing whether you met your target. So, a “value-based” key result is one
that demonstrates the desired business impact or value you’re striving for in
How do we create value-based
the objective. key results?
In a previous article, we discussed different types of key results, one of That’s easy: Be sure and use our recommended
which is a “milestone.” These key results are binary — you either meet them formula for creating objectives: Verb + what
or you don’t. For example, “Introduce a new employee onboarding process you’re going to do + in order to/so that. If you
by June 30.” If you have nothing but milestone key results — those that adhere to the formula and dutifully include the
show activities — without accompanying value-based or business impact last component, you’re identifying the impact
key results, you’re robbing yourself of one of the primary benefits of the you hope to achieve with the objective. Now you
OKRs system — demonstrating progress on strategically important goals. At simply apply a key result to that impact.
the end of the day, OKRs are only valuable if you use them to advance your
strategic agenda, and to do that, you must include at least one value-based
key result.

In the example above that referenced a new employee onboarding process,

you have to challenge yourself by asking: What is the intended outcome
of the onboarding process? Perhaps it’s getting new employees up to peak
productivity as fast as possible. In that case, a business impact key result
might be: “Increase the percentage of employees passing their six-month
probation period from 70% to 95%.” We all know it costs more to recruit,
hire, and train new employees than it does to keep good ones, so this key
result signals real value to the organization.

The ABCs of OKRs 23

Do you include tasks when
setting OKRs?
Do you include tasks when creating OKRs?
As we often do, let’s start by clarifying our terms. When we say task, we’re
referring to something that can typically be accomplished in a relatively
short period of time, or an action that would reside comfortably on a to-
do list. “Email a prospect” or “Meet with the new VP of Sales,” are tasks,
not key results. Whereas, “Increase qualified opportunities in the pipeline
from 25 to 50” is a key result.
To distinguish between a task and key result, consider how long it will
take to achieve (as noted above), and also look at the verb you assign. If
you find yourself using “help,” “participate,” “assess,” or other relatively
passive verbs (passive in this context, at least), you’re most likely offering
up tasks rather than key results.[i] If that’s the case, move up the value
ladder by asking, “Why are we helping, participating, or assessing?”
What is the desired outcome? Once you do that, a more solid key result
featuring an action-oriented verb is likely to emerge.
So, there is a key distinction between key results
and tasks. However, tasks can be an important
component of an effective OKRs program.
Here’s why:
• Compiling a task list helps you think about how
you’re actually going to achieve your value-based
key results.
• By assigning tasks to various members of your
team you can involve everyone in the OKR process,
even if they don’t have their own individual OKRs.
• Tasks are an excellent reality check on your key
results. If your task list to complete a key result
is five pages long, it’s probably unlikely that you’ll
achieve the key result.
• Tasks are useful in planning your work. Each
week (or day), you should review your task list to
determine what must be done and when.
• Task completion allows you to demonstrate
progress on your goals and provides material to
discuss in your weekly meetings.
The ABCs of OKRs 24
How many OKRs should you have?
Are you tired of business writers who constantly trot out stale quotes from
the likes of Albert Einstein or Winston Churchill? Seems there’s no subject
under the sun for which you can’t apply a pithy saying from at least one
of them. But how often do you hear a quote from the French writer, poet,
aristocrat, journalist, and pioneering aviator Antoine Marie Jean-Baptiste
Roger, more commonly known as Saint Exupéry? We’ve got one from this
classic polymath that is perfectly suited to answering the question above.
“Perfection is achieved not when there is nothing
more to add, but when there is nothing left to
take away.”
If you’re using, or planning to implement, OKRs, then fast as you can, tear
down that poster of Einstein on your wall and plaster this quote there, and
on every other empty space you can find.
OKRs will only truly benefit your organization if you have the discipline to
isolate your selection to just the critical few that matter most. If everything
is a priority, then nothing is a priority, and more important, nothing will get
done because you’ll be overwhelmed and won’t know where to start.
When we work with clients to help them craft their OKRs, after an initial
set has been drafted, we’ll often get this question from the CEO (or ranking
person, based on the group): “OK, what have we missed here, folks? What’s
missing?” We let the question sink in, but just before the first hand goes
up to add something to the growing list of OKRs, we offer Saint Exupéry’s
advice by flipping the question.
Rather than adding to your inventory of OKRs, we say, the question you
should be asking yourself is, “What can we remove? Is everything we’ve
listed a true and vital priority for our success in the next three months?” It’s
relatively easy to come up with an “everything but the kitchen sink” list of
potential OKRs, and sure, on their own, each one may be important.
But how important? What are the vital few — could only be one — that
represent the core challenge you have to overcome, or the opportunity that
will catapult you well beyond your competition? Take the time, and have the
discipline to answer that question, and you’re much more likely to achieve
the benefits OKRs can provide.
The ABCs of OKRs 25
How many key results should
you have?
You should have as many key results as necessary to prove
success on the objective, but no more. Key results are
valuable real estate in the OKR world, and you don’t want
to clutter that space with tasks and to-dos.
Your goal in creating key results should be to “tell the story” of your success
on the objective. Let’s look at an example, then we’ll explore this further.
Objective:
Reduce mobile app crashes in order to improve the user experience
Key Results:
1. Create a list of the most frequent categories of app crashes by
Feb. 1
2. Provide patches for top five identified crash categories by Feb. 28
3. Reduce number of mobile app crashes from 400 to 200
4. Increase user satisfaction with the app from 80% to 90%
Notice how the four key results combine to tell the story of success
on the objective. The objective focuses on reducing crashes in order
to improve user experience with our app. Ultimately we want to
demonstrate that we’ve done that — reduced crashes and increased
user satisfaction. But we don’t start there; those are the endpoints
in our story. How do we get there? We think about the early chapters
in our story — the drivers of those outcomes. In this case, we need
to learn more about the crashes occurring and categorize them by
frequency, that’s key result number one. Then we’ll find a remedy for
those troublemakers, that’s key result number two. Now we’re ready to
document success metrics — those are the final two key results.
Forget the “rules of thumb” you find on the web that advise three to five
key results for each objective. What stone tablet did that come down
on? Instead, use the story metaphor and it will always help you craft key
results. Sometimes you’ll need four as shown above, but it could be less,
or it could be more. Once you’ve written your objective (assuming you’ve
followed our advice of including business impact in it), you know the end
of the story. Now work backward to weave the entire compelling tale.
The ABCs of OKRs 26
What is the difference between
committed and aspirational
OKRs?
First the short answer, then some pontificating ...
A “committed” OKR is one that, as the title implies, you are committing
to achieving. Anything less than a score of 1.0 (or 100% success) would be
considered a failure. In some circles, these are also considered “business
as usual” OKRs as they often reflect standard business processes that must
be successfully maintained in order to run a successful company. Hitting
revenue targets that appear in your budget could be a “committed” OKR.
One characteristic we notice with most committed OKRs is that they could
last forever, i.e., they could appear on your list of OKRs every single period.
More on that later.
An “aspirational” OKR is what Google has termed a “moonshot,” something
that will make a significant difference in your organization and prove very
difficult to achieve. Whereas anything less than 100% success is below par
for a committed OKR, with aspirational OKRs, scores in the 60% to 70%
range are typically thought of as successful.
Now for the pontificating portion of this article ...
Here’s our quarrel with the distinction, and why we feel it’s problematic. If
you read the popular literature on OKRs, including John Doerr’s bestselling
book Measure What Matters, you will be told repeatedly that OKRs are about
stretching yourself beyond what you believe you’re capable of; pushing the
frontier of the possible ever further. If that is the true purpose of OKRs, and
it certainly seems to be a slogan tossed around freely by “pundits,” then why
would you muddy the water with so-called “committed” OKRs that simply
measure business-as-usual, status-quo, keep-the-lights-on measures?
OKRs that could justifiably appear every single quarter of your organization’s
life?
Our suggestion is to split OKRs from business-as-usual measurement.
Before embarking on an OKRs program, and this applies to all levels of
the organization, first create a “dashboard” (your terminology may differ)
of the basic measures you must monitor in order to run a successful
enterprise, team, or department. Revenue, customer satisfaction, service-
level agreements, quality control, and employee engagement are all possible
examples. These will be monitored for as long as you’re fortunate enough
to remain in existence. Now you’ve got something to build upon, and that’s
where OKRs come in. The objectives and key results you choose should
help you vault to world-class performance on your standard metrics,
or solve problems that are holding you back in your pursuit of market
dominance. The two systems work together, but to be true to the spirit of
the methodology, OKRs should be isolated to ambitious targets necessary to
take your business to the next level.
The ABCs of OKRs 27
Should OKRs include business-
as your OKRs:
as-usual work?
If you’re new to OKRs, and especially if you haven’t received formal training
in the art of crafting OKRs — and yes, it is an art — it’s very easy when
tasked to create OKRs to simply write down what it is you do every day; in
other words, your BAU (business-as-usual) activities.
Take a human resources executive. When charged with creating OKRs for the
first time, he’s likely to create a set that includes hiring, providing benefits,
and measuring engagement (all OKRs we’ve seen, by the way). That’s his job,
after all — the summation of his roles and responsibilities, the function he’s
fulfilling — so shouldn’t these day-to-day responsibilities form the basis of
his OKRs? The answer is an unequivocal no.
OKRs are, by definition, designed to propel an organization
forward by measuring its true priorities — the actions that
will drive learning and change.
Pick your cliche here; the vital few in place of the trivial many, separating the
signal from the noise, etc. The point is, with OKRs, we’re moving above and
beyond the day-to-day, isolating the new, bigger, different courses of action
we feel will drive the execution of our strategy.
There are several problems with listing day-to-day activities
• They’ll never change. One of the primary benefits of the OKRs
methodology is the 90-day cadence. Updating every quarter allows
for agility and swift reaction to changes in your environment, which is
critical in an era of rapid disruption. Your job roles and expectations,
however, are for the most part fixed. Despite some variations from
time to time, the metrics you use to gauge success in your position
are unlikely to vary over time. Therefore, by selecting BAU activities to
serve as OKRs, you’re robbing yourself of one of the system’s greatest
attributes — flexibility and prioritization.
• They don’t promote innovation. Building on the point above, if you
choose to measure BAU chores as OKRs, there is little hope of
introducing profound or meaningful innovation in your work, as you
continue to monitor the same activities. The targets may change
(emphasis on may), but without the experimentation inherent in
stretch OKRs, you’re likely to remain in a static and fixed relationship
with your work.
• They rob you of autonomy and intrinsic motivation. One of the most
important characteristics of an effective OKR is that it must be
meaningful to you. Research consistently demonstrates that we’re
much more likely to achieve goals that are self-selected, enjoyable,
and imbued with personal meaning.[i] We’re not suggesting that BAU
activities aren’t meaningful to those engaging with them; we’re simply
noting that the metrics associated with such activities are rarely chosen
by the individual performing the duties. OKRs, conversely, should
result from a robust dialogue between an individual (or team) and their
superior. The team — those performing the work — know better than
anyone what is necessary for improvement, and therefore are best able
to provide meaningful OKRs.
The ABCs of OKRs 28
Here is an easy and practical approach for balancing day-to-day work with
OKRs. Before you draft OKRs for the first time, create a dashboard of metrics
that you can use to assess performance on your BAU activities.

This serves two purposes:

IT PROVIDES A MECHANISM FOR TRACKING YOUR SUCCESS
1 IN THOSE ACTIVITIES THAT MAKE UP THE “BLOCKING AND
TACKLING” OF YOUR DAY JOB.

And that is certainly important; you and your boss need to know
that “the trains are running on time” and you’re on top of the
responsibilities that have been assigned to you.

2
YOU CAN USE THE BAU ACTIVITIES AS A STARTING POINT FOR
CREATING OKRS.

Examine what it is you do and ask, “How could I make a 10x

improvement in that process?” or, “What is the roadblock holding
me back from world-class performance?” Your OKRs don’t
necessarily have to be derived from BAU activities, but starting
there can provide ample food for thought.

Business-as-usual activities are an important part of your world, but they’re

not OKRs. Use the advice offered here to ensure you’re getting the maximum
impact from your OKRs investment.

[i] See, for example, the work of Heidi Grant-Halvorson, Carol Dweck, Teresa Amabile, et al.

The ABCs of OKRs 29

How do we know we’ve chosen the right OKRs?
If you haven’t already seen it, check out the 2000 comedy High Fidelity,
starring John Cusack as Rob, a 30-something record store owner in
Chicago. Rob loves compiling lists and ranking things. In fact, the movie
centers around the list of his “Top 5 Breakups.” He and his coworkers have
spirited debates about myriad other topics as well, and it’s clear they’ve
put serious thought and consideration into their choices when stitching
together personal rankings. While watching, I drifted back to work mode
for a moment and wondered: “Do organizations put that much thought into
choosing their OKRs?”
Of course they do, right? Maybe not. Why might I suggest this? One primary
reason is the sheer number of OKRs many organizations put forward each
quarter. It’s not uncommon to see six, seven, eight, or more OKRs for a 90-
day period. If you’ve done even a cursory amount of research on OKRs, you
know the framework’s tagline is measuring what matters (to quote John
Doerr). It’s all about focus — homing in on the critical elements of success,
separating the signal from the noise to isolate your efforts on the vital
differentiators. It’s difficult for me to imagine that a list of seven or eight
OKRs is evidence of true focus. If I’m quoting Doerr, I should also quote
one of his heroes — Andy Grove, of Intel fame. He constantly reminded his
people: “If we try to focus on everything, we focus on nothing.”
When creating OKRs, it’s perfectly OK to start with an extensive list of
possibilities. But that’s where the hard work really begins.
[i] Michael J. Gelb. How to Think Like Leonardo da Vinci. New York: Bantam Dell. 2004.
Here are some questions to consider as you chisel away at
your catalog of potential OKRs:
• What is the strategic problem we’re trying to solve? Take a step back
to critically examine what’s taking place in your environment and use
that to frame a definition of a problem statement. Then, examine your
potential OKRs and choose only the critical few that will help you solve
the problem.
• Which of the OKRs make you feel uncomfortable? The research on goal
setting is very clear on the role of stretching ourselves beyond what we
think is easily accomplished. The sweet spot tends to be that magical
position just beyond our comfort zone. So, which of your OKRs will
make you exert that extra effort to achieve success?
• Which of the OKRs provoked the most discussion among the team?
Achieving OKRs should be difficult (see the previous bullet). Therefore,
you need everyone to feel a sense of passion and commitment when it
comes to their achievement. Vigorous debate and spirited inquiry are
terrific signs that you’re onto something everyone is truly interested in,
cares about, and is willing to put their shoulder behind.
Here’s a compelling book title: How to Think Like Leonardo da Vinci. Who
wouldn’t want to think like one of the greatest polymaths in history? The
book’s author, Michael Gelb, has this to say about the task of making
difficult choices: “The discipline of ordering ... the discipline of choosing one
over another, ranking one a level higher than another, and then articulating
why you chose the way you did requires a depth and clarity of consideration
and comparison that inspires richer appreciation and enjoyment.”[i] I can
think of no better way to describe the arduous, but ultimately rewarding,
process of selecting OKRs of genuine value. Although it’s a difficult
assignment, the hard work of making the demanding choices will leave you
with a richer appreciation of what you do select.
The ABCs of OKRs 30
How do OKRs connect?
Notice we used the word “connect” and not “cascade.”
There is a Grand Canyon-sized difference in applying those
two concepts to OKRs. But more on that just a bit later.
OKRs can connect vertically (strategically) and horizontally. The more
straightforward of the two is strategic or vertical connection. This takes
the form of a simple test: Does the OKR you’ve written align with the
organization’s strategic direction? For example, let’s say your company has
strongly committed to a strategy of outstanding customer service with a
higher price point than your competition.
If your OKRs relate to cost cutting in an effort to offer lower prices,
you’re clearly not aligned. We urge our clients to never create OKRs “in a
vacuum,” meaning teams create OKRs, put them in a system, and that’s it;
no discussion, no debate. Instead, we encourage thoughtful conversations
between leaders and their teams to ensure the OKRs chosen do, in fact,
line up with the organization’s strategy. Excuse the cliche, but these
conversations can often lead to “teachable moments” during which the
company’s strategy is drawn in much bolder relief, leading to greater
understanding and more effective OKRs.
Horizontal alignment represents the process of recognizing dependencies
necessary to achieve a given OKR and having a governance structure in place
to ensure those dependencies are managed. That sentence is a bit of a
mouthful, but it’s really not that complicated. It breaks down like this. When
you write an OKR, you should ask yourself, “Whose help in the organization
do I need to achieve this OKR?” Sadly, most people stop right there, but the
magic comes from being very specific in articulating your need.
Let’s say you need the marketing department’s help to hit an OKR. Calling
your pal in marketing and beseeching, “I need your help,” isn’t going to cut
it. Challenge yourself to get as precise as possible. Maybe you need 10 hours
of SEO support and 15 hours of graphic design work. Now you’re ready for
a real conversation and negotiation. If marketing can provide the needed
assistance, you’ll document that. If they can’t, and that assistance is vital
to you achieving the OKR, you’ll escalate up the ladder to your respective
bosses who will make a strategic decision on who gets what. Always
remember: Escalation isn’t a bad thing, as it reflects a discussion on what is
at stake with OKRs — strategy execution.
OK, now back to connecting vs. cascading. Some people out there — let’s
politely call them uninformed — will tell you that when you (the boss) create
a key result, that becomes my (the employee’s) objective. This is as pure a
definition of the old cascading model as possible, and the fact is, it’s not
correct and can be extremely damaging to your OKRs implementation.
There are at least two reasons this is the case. First, it’s simply not
practical. Unless you’re working in sales, perhaps the only function in
which this model may prove applicable, your key result may not be a direct
fit for my role, function, or responsibilities in a way that makes it possible
for me to effectively execute it at my level. It’s akin to the old “square peg
in a round hole” challenge. I may adopt your key result as my objective,
but in reality there is little I can do to influence or execute it, and thus the
OKR I create, while technically aligned, proves irrelevant and unlikely to
motivate performance.
The ABCs of OKRs 31
Managing

The ABCs of OKRs 32

What is a “typical” OKRs cycle?
The first thing you should notice is that the word “typical” shown above is
surrounded by quotation marks. That’s because it’s difficult to document
a typical OKRs cycle, since it will depend on the cadence you’ve decided
to follow.
While many of our clients adhere to the customary 90-day
window, others create and monitor OKRs on a semiannual
basis, and a few use “trimesters” (four-month periods).
We’ll focus on a quarterly cadence, and assume you’re
currently using OKRs. If you’re new to the framework, you’ll
quickly fall into this rhythm.
We’re going to assume all “teams” in your organization are creating OKRs.
Notice our old friends, the quotes, have made another appearance. This
time it’s because “team” could mean different things in your particular
circumstance.
Two weeks before the end of the current quarter, you should be thinking
about OKRs for the subsequent 90 days.
Here’s what that entails:
• The team leader solicits input from the team on possible OKRs for the
next period.
• Based on that input, a small sub-team convenes and drafts possible
OKRs. We like this small-team approach because it’s always easier for
the full team to react and revise than create from scratch.
• Document dependencies you have with other teams.
• Convene the entire team to discuss, debate, and ultimately come to
consensus on your next set of OKRs.
One week prior to the close of the current quarter, you’ll
be getting closer to finalizing OKRs. These are the steps in
that process:
• Receive approval on your OKRs from whoever it is that your team
reports to. You want to ensure vertical alignment and strategic relevance
of the OKRs, so meeting with the next level up is a crucial step.
• Meet with any teams you depend upon for assistance and negotiate
their aid. If they agree to providing the help you require, document that
with your OKR. If they’re unable to assist, escalate to the next level up
for a decision. That’s a short sentence, but it’s long on implications.
You’ll require a strong governance process in place to manage this
escalation process. By the way — from what we hear from former
Googlers — escalation is a key to OKRs success.
Realistically, it’s going to take at least a week to get approval on your OKRs,
and meet with other teams regarding dependencies. Therefore, you’ll almost
certainly be into the next quarter before getting the final seal of approval on
your OKRs.
By the end of the first week of that subsequent quarter, you should:
• Finalize your OKRs, including negotiated dependencies
• Hold a retrospective with your team that scores the prior-period OKRs
and analyzes overall strategic performance; see our article “What
Should We Talk About in OKRs Meetings?” for more on that subject
That’s it! Rinse and repeat for the next several quarters and you’ll be well on
your way to enhanced strategy execution.
The ABCs of OKRs 33
How often should we review OKRs?
Once upon a time, there was a man named Gus who got in over his head
with debt and was way behind on all his payments. Exhausting every source
of credit, and not knowing where else to turn, Gus goes to church one day,
kneels at the altar, and prays to the Lord that he might win the lottery to
right his financial ship. “Dear Lord,” he pleaded, “please let me win the
lottery. I’ll be a new man, I promise.”
A week went by with no lottery jackpot for Gus. Back to church he went.
“Lord, just let me win this week and you’ll see, I’ll turn over a new leaf.”
Another week passes and Gus is no richer. Frustrated and close to tears,
Gus returns to church, “Lord, I don’t understand, I’ve prayed, I’ve promised
to change, why won’t you let me win the lottery?” Suddenly there came a
loud clap thunder, and the Lord spoke, “Gus, meet me halfway: Buy a ticket!”
Unless you take the time and effort to regularly review
your OKRs, you’ll be no better off than Gus, hoping to win
the lottery of potential OKRs benefits like alignment, focus,
and engagement, without ever going to the trouble of
buying a ticket.
OK, we’ll assume you’re now on board with the idea, so how often should
you examine your OKRs? Here comes the fence-sitting consultant answer
everyone hates: It depends. But of course, it does depend on the cadence
you use for OKRs. Outlined in the next column are options for reviews.
We suggest you choose the operating review rhythm that matches your
cadence and aligns with the meeting culture in your organization.
Weekly: This is typically a short meeting during which you discuss
priorities for the coming week (relating to your OKRs), assess
progress, and perhaps most important, gauge the team’s ongoing
commitment to the OKRs and the process itself.
Monthly: Similar agenda to what was presented above for a weekly
meeting, but with greater emphasis and depth on current progress. If you
have OKRs that are at risk or falling behind, you can use this meeting to
determine what is necessary to get them back on track.
Mid-quarter: Research suggests that the midpoint of any activity is crucial.
It’s at this juncture we realize time is ticking away and the pressure to
achieve begins to mount. Use this review to, once again, assess progress and
determine where you’ll place your focus for the remainder of the quarter. If
you have an OKR (or OKRs) that appears destined to fail, you’ll need to make
the decision whether to garner the necessary resources to resuscitate them,
or aim your focus on OKRs that look poised for success.
End of quarter: At the end of the period you’ll score your OKRs, and more
important, conduct a deeper dive into what occurred during the past 90
days. What did you learn? Did the OKRs keep you focused on adding value
for your customers? Were the OKRs ambitious enough? These and many
other questions ensure you’re using OKRs to advance your strategic agenda.
The ABCs of OKRs 34
How do we make OKRs a habit?
When you embark on an OKRs
program, you’re launching a change
initiative whether you label it that
or not. You’re changing the way you
measure performance, the way you
conduct conversations, and if done
well, you’re changing your ability
to align, engage, and execute for
the better.
To make that change happen, you have to ingrain
OKRs into your culture; how you do things day
in and day out. In other words, OKRs have to
vie against the cultural habits your organization
has erected over the entire time it’s been in
operation, and those typically run deep. Very
deep. How do you begin to sew OKRs into the
fabric of your organizations?
Here are a few things you can do to start making OKRs a healthy habit.
• Build on habits you already have. Scientists call this “habit stacking,” adding a desired new
habit to one you currently practice. For example, we’re pretty certain you have management
meetings of some kind now. Take a portion of that time to discuss OKRs, or better yet, use
your OKRs to drive the meeting agenda.
• Make it easy for people to access their own, and others’, OKRs. Don’t bury OKRs five levels
down in some dusty, rarely used corporate intranet you last updated with meaningful
information in 1998. Bring them front and center for all to see and discuss. There are many
robust software platforms for OKRs that make transparency and accessibility a breeze.
Ensure your teams post their OKRs to a common repository to make review and analysis
simple for everyone. And don’t forget the old-school possibilities of poster-sized versions of
your OKRs on office walls.
• Start small! One key to successfully launching any new habit is establishing quick wins
through realistic action. If you’re out of shape, you wouldn’t charge into the gym, throw 225
pounds on the bar, and expect to press it a dozen times. Try that and you’d surrender after
one doomed repetition. Instead, start with a reasonable goal you’re likely to achieve. In
OKRs parlance this translates to a couple of things: Keep the number of OKRs small at the
outset. Don’t burden yourself with too many. And as noted above, make them aspirational but
ultimately achievable.
OKRs success derives from using and managing with OKRs. In other words, making it a habit that
soon becomes second nature. If you’d like more information on the topic of habits, there are
several excellent books on the topic. At the top of our list are: Tiny Habits by B.J. Fogg and Atomic
Habits by James Clear.
The ABCs of OKRs 35
How do we improve OKRs
meetings?
Many organizations will use a town hall approach to
share quarterly OKRs, drumming up enthusiasm for the
process and increasing transparency across scattered
teams. Sounds great, but in practice these meetings can
quickly devolve into the worst version of show and tell.

In fact, a common theme we’ve discovered is that the presentations get

shorter as the day advances. It’s not uncommon to hear something like
this, “Well the last group took three minutes for their OKRs. We think we
can beat that and do it in two.” Everyone chuckles, but we sense the
sentiment below the laughs is one of “Yes, please hurry up.”

This is the epitome of a wasted opportunity. Organizations invest

substantial human and financial resources in OKRs, pursuing the
promise of improved execution, then allow that to slip away in a
fog of dreary presentations that hold the possibility of bringing the
framework’s very potential into question. Here are three ideas we
believe will assist you in harnessing the power of transparency through
better engagement of your meeting participants.

The ABCs of OKRs 36

1 Remember the story.
Every story ever told — your favorite novel, movie, or play —
2 Draw on the wisdom of Stephen Covey.
One of our favorite (of many) principles put forth by the legendary
adheres to a roughly similar formula. Start with conflict, the management guru Stephen Covey is third-person teaching. Covey
problem faced by the protagonist compelling them to action. rightly believed that the best way to learn anything is to teach it.
We can draw on that wisdom to improve the engagement in our
Next comes transition, the phase of the story during which our
OKRs sharing meetings.
hero ventures forth into the world encountering increasingly
difficult obstacles on their chosen path. Every story reaches a Before the meeting, assign dissimilar groups to conduct the initial
climactic point of action or drama during which the protagonist presentation of another team’s OKRs. Perhaps HR will be assigned
either achieves, or is denied, their ultimate quest. to present engineering’s OKRs and vice versa. The team who owns
the OKRs will of course embellish the presentation with additional
Finally, the story closes with the “new normal” state for our hero.
details, and answer any questions, but this process forces teams
The problem in most OKRs sharing meetings is that virtually all
to learn more about other functions’ work, building empathy
groups will simply read aloud their OKRs. In our schema above,
and laying the path for potential collaboration. Each quarter, you
that’s the climax of the story. But without the conflict and
can reshuffle the deck, building bridges between what could
transition we, the audience, have no context for that climax. Little
previously be considered unrelated functions.
wonder we don’t engage — we don’t know what led the group to
that choice of OKRs.

Imagine how much more impactful a presentation would be

if a group began by outlining the specific challenges they face
at this moment, the conflict in their environment. Then they
pivot to discuss the options they considered to overcome those
challenges in the form of OKRs (their transition). Now we’re ready
to hear the selected OKRs; we have the context necessary to
either agree or challenge their choice.

The takeaway here is this: Don’t allow your groups to simply read
what is on the screen behind them. Challenge them to frame their
OKRs in a story. It’s better for them, and much better for engaging
the audience.

The ABCs of OKRs 37

3 Use theme teams.
One option is to make three teams (this is an arbitrary number)
the official observers for the first set of presentations. Make it
clear that it will be incumbent upon them to offer their feedback
at the conclusion of the first round of OKRs. Of course, others
may chime in as well, but at the very least you’ve guaranteed the
attention of a subset of your audience. A second option is to draw
randomly from the group — after a set of presentations, choose
a random set of teams to offer input. This forces everyone in the
room to stay present.

Remember, OKRs are not like a piece of software you plug in and
— presto! — your organization is transformed into an execution
machine. Rather, it’s a framework that requires disciplined and
rigorous execution along with a good bit of nurturing as you
go. Improving the way you share OKRs, in an effort to promote
transparency and cross-functional collaboration, is one of the
areas that requires significant thought and effort should you hope
to achieve the benefits by OKRs.

The ABCs of OKRs 38

How do you make OKRs stick?
One of my OKRs for this quarter is to go through all of the many business
magazines and books I’ve read over the past several months and extract
the nuggets I think are particularly relevant; those I can share with clients
to help them on their OKR journey. Not the sexiest of OKRs, but it hits two
critical points: It’s meaningful to me (aka inspirational) and will definitely
add business value if I can find pertinent information to help our clients.
Sure enough, very early in my work on the OKR, I discovered a crinkled
Post-it note stuck on page 17 of the November-December 2018 Harvard
Business Review. Peeling back the Post-it, I found an article titled “Making
Process Improvements Stick,” and as the title implies, it offers advice on
how to ensure early enthusiasm on an endeavor doesn’t inevitably lead
to backsliding and a place on the junk heap of once-lauded but since-
abandoned ideas.
Researchers cited in the article offer three ways in which
sustained improvement can be facilitated, and I believe all
three apply perfectly to OKRs.
Communicate the program in a clear narrative that aligns with the
organization’s purpose. Let’s face it: Our teams are change-weary. There
is so much going on in modern organizations it’s difficult for even the
most well-informed employees to separate the signal from the noise
in their environment. The first test any new initiative, OKRs included,
must pass is: Why is this important to us? Answering that question is
critical, and to prove effective, the response should link back to your core
mission or purpose. How will OKRs better enable you to serve the needs
of your customers and fulfill your vision? Describe that outcome when
communicating the why of OKRs.
Direct efforts toward pain points whose easing would clearly benefit
employees. What’s getting in the way of your teams doing their best
and most important work? Is it a lack of alignment? Or perhaps, more
fundamentally, the fact that most employees don’t know your company’s
core priorities, and therefore can’t determine how they can best contribute.
OKRs can help with these and a host of other organizational challenges. Be
sure you communicate those solutions when sharing the why of OKRs.
Ensure senior leaders act as coaches. Chapter one, page one of any book
on successful change will declare that executive sponsorship is vital should
you hope to achieve meaningful results. In the OKR orbit, this translates to
executive involvement in the process. Train your senior leadership on how
to write (and recognize) good OKRs, and have them mentor and coach their
direct reports. An old adage reminds us that “everyone watches what the
boss watches.” So it is with OKRs.
Plato said, “The beginning is the most important part of the work.” That is
certainly the case with OKRs. By following the advice offered above you’ll
ensure your OKRs program is built on a solid foundation, and ready for
rapid growth.
The ABCs of OKRs 39
Should we link OKRs to incentive compensation?
Quick warning: This discussion is going to be just a bit Here’s the thing: With the Balanced Scorecard, not only did people forgo
debate on the idea of linking it to incentive compensation, that linkage was
longer than some of our other topics. But, in our opinion
taken as a given.
(hopefully yours soon), it’s time well spent.
Here are just a few statistics supporting that claim:
Should you link OKRs to incentive compensation? As with a number of OKRs
considerations, this is not as easy a decision as 10 minutes researching it on • A Hay Group study of 15 sophisticated users of the Balanced Scorecard
the internet might suggest. So, to begin, what would those 600 seconds of found that 13 of them linked pay to the Scorecard.
research reveal? Overwhelmingly, you’d be advised not to link OKRs to any • A Mercer survey of compensation practices in 214 companies found that
type of pay-for-performance plan or incentive compensation. 88% of responding companies consider the use of BSC measures linked
to reward systems to be effective.
The primary rationale offered for this stance is the possibility of
• Another survey of scorecard implementations found that 70% of the
“sandbagging,” i.e., people or teams setting easily achievable targets on their
respondents already use the balanced scorecard or some variant for
OKRs to ensure an incentive is received. At first glance, that makes sense.
compensation purposes.[i]
We humans are self-serving, and who among us wouldn’t want to receive
an easy reward with little effort invested. But, before we write the topic off
This wasn’t just a group of rogue practitioners making a bold decision.
completely, let’s turn back the clock a bit to see what history can teach us.
Robert Kaplan and David Norton, the founders of the Balanced Scorecard,
said: “Ultimately, for the scorecard to create cultural change, incentive
Twenty years ago, the Balanced Scorecard (BSC) was the OKRs of its day; the compensation must be connected to the achievement of corporate
“hot” performance measurement and management system. It’s still popular objectives. This issue is not whether, but when and how, the connection
today. We’re not going to go deep on contrasting the Balanced Scorecard should be made.” Note the language there — the issue is not “whether,” but
with OKRs, but suffice to say that they share about 90% of the same DNA. “when.” A powerful recommendation.
An objective in the BSC is an objective in OKRs. A key result in OKRs is a
measure in the BSC world. The primary difference relates to categorization
of objectives. As the name implies, the BSC dictates objectives and
measures in four “balanced” perspectives of performance, whereas OKRs
simply warrant a focus on what matters most right now. But, again, the
models are quite similar in that both focus on the execution of strategy.

The ABCs of OKRs 40

Maybe we should step even further back to determine
whether linking performance to incentive compensation
using any framework is a good idea.
Entire books have been written on that subject, but here are a couple of
anecdotes suggesting that link is entirely warranted:
• In a study of “What Really Works” within successful organizations,
authors Nitin Nohria, William Joyce, and Bruce Robertson bluntly
asserted, “It should be obvious that the best way to hold people to
high standards is to directly reward achievement. Ninety percent of the
winning companies in our study tightly linked pay to performance, while
only 15% of the losers did.”[i]
• Similarly, it has been suggested that effective implementation of a
strategic plan is greatly enhanced when reward and recognition systems
steer employee attention and focus toward the key dimensions of the
new direction.[ii]
For example, if Paul reports to Kim, Paul should develop his draft OKRs and
then have a conversation with Kim about them, determining whether the
level of stretch inherent in the OKRs is appropriate. This conversation fosters
understanding of the strategy (which will improve the quality of the OKRs)
and drives engagement as Paul is getting direct feedback on what matters
most — how he can contribute to the company’s strategy execution efforts.
Thus, the final OKRs should represent appropriate stretch and be relevant
for a potential incentive compensation link.
All this may lead you to think we’re strongly advocating a linkage between
incentive compensation and OKRs. That’s not the case. What we do want
you to do is make an informed decision in light of actual history, and not rely
on blogs written by people who have little actual experience in the strategy
execution trenches.

But what about that pesky sandbagging problem? Well, if you adhere
to the true spirit of OKRs and institute a governance process in which
managers are having regular coaching conversations with their employees,
the sandbagging argument is specious at best. OKRs should never be set
without negotiation.

[i] Christopher D. Ittner, David F. Larcker, and Marshall W. Meyer. Performance, Compensation, and the Balanced Scorecard. 1997.
[i] Nitin Nohria, William Joyce, and Bruce Robertson. What Really Works. Harvard Business Review. July 2003. p.46.
[ii] See for example: Elspeth J. Murray and Peter Richardson. Fast Forward: Organizational Change in 100 Days. New York, NY, Oxford University Press. 2002. p. 112.

The ABCs of OKRs 41

Should we link OKRs to performance reviews?
First, we should acknowledge that the performance review
as we know it, one of the true dinosaurs of organizational
life, is — fortunately for all of us who have either
conducted or been the recipient of one — facing extinction.
Deloitte reported in 2015 that only 12% of companies it
surveyed were not planning to rethink their performance
management systems.[i]
Just to acquaint you, in case you’re one of the lucky ones who hasn’t been
subjected to a performance review, in that antiquated process, a manager
and employee would sit down once a year to discuss the employee’s
performance during the past 12 months. Most people would agree the
ensuing conversation was neither productive nor inspiring.
There are a number of issues with the old performance review system:
• Focusing on the past, instead of the present and future
• “Stack ranking” employees, so that even some of those who work hard
and produce results will be given relatively poor reviews
• Generating a “fight or flight” response in employees who feel under
threat
According to the Conference Executive Board and the aforementioned
Deloitte, 95% of managers express dissatisfaction with their performance
management systems, and 85% of companies feel the same way. A
plethora of statistics all point to the same undeniable conclusion: The
process is broken.
[i] Peter Cappelli and Anna Tavis. The Performance Management Revolution. Harvard Business Review. October 2016.
Fortunately, a new model is emerging.
There is an emerging focus in the review process on more frequent feedback
between managers and employees; quarterly or — in some cases — even
monthly conversations. No numerical rankings, just open and honest
discussions that focus mostly on the future; capitalizing on the employee’s
strengths to guide enhanced performance. And this recurrent feedback
appears to provide benefits. For example, authors Margaret H. Greenberg
and Senia Maymin, writing in their book Profit From the Positive, report that
managers who scored in the top quartile for giving frequent recognition and
encouragement saw a 42% increase in productivity compared with managers
who scored in the bottom quartile.
OKRs can play a part in this new and improved approach to performance
reviews. Each quarter (for example) a manager can sit with an employee
and ask them about their OKRs for the past quarter — what they learned,
how they contributed to a shared OKR, etc. — and hold a discussion of
the next quarter’s OKRs to ensure there is alignment around priorities and
expectations. To ensure a meaningful and productive conversation, however,
most organizations will have to provide training to their managers on how
to structure such a conversation, the questions to ask, how to assess the
employee’s psychological safety, etc.
As noted above, there is a growing body of evidence to suggest that this new
way of conducting “reviews” by having frequent conversations has a number
of positive attributes. One that has been empirically demonstrated is an
increase in employee engagement. This, of course, is crucial to maintaining
talented employees in a competitive job market.
The ABCs of OKRs 42
Ready to start using OKRs?
fitbots
Paul Niven’s company, OKRsTraining.com, has an exclusive partnership with Inspire
Software, an integrated continuous performance management platform that creates leaders
at all levels. This partnership gives you access to “best of breed” strategy, consulting, and
software solutions — a winning combination for any organization looking to optimize OKR
initiatives to deliver strategic results.

Schedule a free feedback session on your OKRs and learn more about moving forward
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The ABCs of OKRs 43

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