OKR stands for ‘Objectives and Key Results’ and is a way of defining goals and measuring progress and success as you set out to achieve them. The way it works is you set an Objective and then define the key results that will mean that you have reached your objective.
A very simple example:
Objective – to learn more about OKRs
Key Results – read at least one article on OKRs
As you can see, the Objective is more of a high-level goal while the Key Results break it down into smaller, measurable goals.
A Better Example:
Objective – Increase customer satisfaction
Key Results – Achieve Net Promoter score of 4 or above; Resolve all complaints within 48 hours; Reduce customer churn rate by 30%
It is important to remember that the Key Results are not specific tasks that need to be completed, but rather the way you measure the success of your objective. Tasks should instead be designed to fulfil the key results.
Measuring success:
OKRs can also be used to provide a figure on how successfully you are completing them. As each OKR is reviewed, score the key results from 0.0-1.0 based on your success in achieving them.
Regularly scoring either 0.0 or 1.0 might mean that you have to rethink the way you set your OKRs. They might be too ambitious, or not ambitious enough.
To ensure that key results can be scored accurately, they need to have some way to measure success included when they are set. Clearly defined goals make it easier to track long-term improvements.
Using OKRs
OKRs can be used if you are the only person working in your business, or if you have a team of thousands. The important thing is to ensure that everyone shares the same language and overarching goals. You might want to have one or two OKRs that describe your company’s vision while setting (or letting your employees set) more specific ones that impact day-to-day tasks.
One company that successfully uses OKRs is Google. Each employee is encouraged to set their own “stretch goals” – goals that are just beyond being achievable. Google defines success in achieving these as consistently scoring 0.6-0.7. Every OKR is made public so that the whole organisation can see what each employee is working towards. You can find out more about Google’s approach to OKRs here.