What are OKR Goals? The Basics of This Goal Setting Approach
It took 2,500 years to build the Great Wall of China. The Ming Wall alone, its most famous section, took 276 years to build.
So did every bricklayer — or even every Ming emperor — show up to work each day thinking about completing the Great Wall?
We certainly hope not, or they’d be overwhelmed with stress!
That’s the idea behind OKRs, or objectives and key results. OKRs are a way to make goals, even ambitious ones, more achievable by breaking them down into smaller parts.
If your goal is the Great Wall of China, OKRs are each battlement, fortification, and stone.
Companies from Google to Twitter use OKR goal setting to accomplish amazing things. They can likely help your organization, too — and hopefully, your work will be way less taxing than building a 13,000-mile wall.
Here’s what you need to know about creating a list of performance goals and objectives for employees.
What are OKRs?
OKRs were invented by Intel in the 1970s as a way to monitor progress and realize ambitious, exceptional goals. Outside of Big Tech, they were popularized by John Doerr, who told the world about the power of OKRs in his 2017 book Measure What Matters.
OKRs can be summed up in a simple phrase:
“I will accomplish [objective], as measured by [key results].”
OKR goals are made up of two complementary ingredients — objectives, and key results.
Put simply, objectives are where you’re going. Key results are how you’ll get there.
Objectives are bold, inspiring, visions of the future. Great objectives are descriptive and exciting — the kind of thing that makes people want to rally around realizing them.
Key results are components of an OKR that are quantitative, hyper-specific, and time-bound — think Steve Wozniak to the objective’s Leonardo Da Vinci. If key results are completed, it means you’re significantly closer to the objective, and you can measure how far you’ve come.
Think big
OKRs aren’t for ‘business as usual,’ day-to-day goals.
You wouldn’t create an OKR like “complete payroll every two weeks,” or “serve 35 customers a day” unless you were facing significant challenges in those areas.
Instead, OKRs are for big, lofty goals — your organization’s Great Wall of China.
The OKR framework breaks those big dreams down into smaller, but no less important tasks, that are relevant to each department, team, and even individual.
That means every single brick in your company’s Great Wall gets the care, focus, and attention to detail it deserves. The outcome? A stronger, higher-quality end product.
Setting OKRs
Good OKRs don’t exist in a vacuum. Of course, it’s a great thing for individuals to set goals and objectives — but it’s unlikely to transform an organization, or be helpful on larger teams.
That’s why OKR goal-setting has three parts: company-wide, team, and individual OKRs.
Company OKRs
Usually, executives or senior leadership will choose 1-3 company-wide OKRs on a set time frame, such as each year or quarter.
These overarching objectives (and the results that will measure them) are closely aligned to the company’s mission. OKRs translate broad strategic goals into specific, tactical priorities.
Less is more when it comes to company OKRs. Research shows that for best employee engagement, people need to feel connected to their organization’s greater goals. Companies who set too many OKRs risk confusing their people, and diluting the impact of each one.
Team OKRs
Next, managers will break those OKRs down into objectives and key results for each department or team.
Good team OKRs are collaborative, allowing teams to work together to realize them. No one wants to feel like a cog in a machine — it’s been proven that teams perform better when they’re working towards a clear, shared goal.
Individual OKRs
Finally, employees and managers work together to assign OKRs to each individual member of the team.
The best individual OKRs feel personally meaningful, allowing the employee to pursue things they’re actually interested in. While that could be business results like sales, it could also be areas they want to build skills in or learn more about.
That’s why the OKR-setting process should be participatory, with employees and managers working together to decide which goals are the best fit.
Aspirational vs. commitment-based OKRs
There are two kinds of OKRs: aspirational, and commitment-based. A good goal-setting strategy should make use of both.
Aspirational OKRs
Have you heard the phrase “shoot for the moon, and you’ll land among the stars?” That’s an example of an aspirational OKR, also known as a stretch goal.
Stretch goals have a 50-70% chance of being realized. They’re not impossible, but they’re definitely ambitious — in an exciting way!
Commitment-based OKRs
Commitment-based OKRs are ones you can expect to complete with 90-100% certainty. Maybe they’re only a slight reach from the performance you’re already seeing, and you have the resources to help boost people’s performance.
To make sure these OKRs are reasonable, involve employees in the goal-setting process. Do they feel they can realistically deliver these results?
Setting realistic expectations
OKRs are inspirational, visionary, and even fun — not intimidating or high-pressure!
That’s why it’s critical to make sure employees know which OKRs are commitment-based, and which goals are aspirational.
Aspirational goals are “if we can,” not “at any cost.” Commitment-based OKRs should be realistic enough that employees don’t feel any stress or anxiety about committing to them.
If these distinctions aren’t communicated clearly enough, teams may sacrifice quality, or even cut dangerous corners, to achieve their goals.
One strategy to avoid this is to back aspirational objectives up with quality-focused key results, such as “launch our software with less than 5 bugs.”
It’s especially important not to tie aspirational OKRs to employees’ compensation. Research shows that financially incentivizing very high goals leads to unethical behavior and competitive, unhealthy workplace culture.
The power of the weekly check-in: OKRs for performance management
Setting OKRs isn’t like casting a magic spell. On their own, they won’t transform your organization — or produce any change at all.
Instead, think of OKRs as a roadmap. They show your people where you’re going, and what it will take to get there.
Maybe your objective is an enchanted forest — and key results are the treacherous mountains and dark caves you’ll need to cross along the way.
You can’t reach your destination without a map. In fact, you won’t even know if you’re going in the right direction! That’s why getting to know the OKR framework can be a helpful way to build people management skills.
Monitoring progress towards your goal
Weekly check-ins are how you guide your team to that enchanted forest, and make sure no one gets eaten by a bear.
At your check-ins, use OKRs to assess performance in a way that’s flexible, human, and productive.
Discuss progress towards each employees’ key results. How are they doing? Is anything holding them back, at work or in their personal life, that you could offer support for?
This is also the time to watch out for unintended consequences (like burnout or lowered quality) that could sabotage the entire mission. If needed, check-ins are an ideal time to remind your team that quality, safety, and their health comes first.
An easy way to track OKRs
Visibility is everything when you’re leading teams toward great things.
15Five’s centralized platform makes it easy to see how your company is progressing towards its most important objectives. You’ll be able to set company OKRs, break them down for teams and individual employees, and easily track progress.
Our OKR tool gives you a birds-eye view of how people are progressing towards your most important objectives — and the key results that will get them there.
