What are OKRs? A practical guide to Objectives and Key Results

What does OKR stand for?

OKR stands for Objectives and Key Results. It's a goal-setting framework that helps teams set ambitious goals and measure success with clear, quantifiable outcomes. The Objective is what you want to achieve. The Key Results are how you'll measure progress. Most teams set OKRs every quarter and check in on them weekly.

The origin of this methodology can be traced back to when Andy Grove introduced the OKR approach at Intel in the 70s. But it took another ~30 years before the popularity of the framework took off when John Doerr brought it to Google in 1999. Fast forward another 20 years, and OKRs are no longer a process reserved for Enterprise teams. Today we're seeing numerous startups and scale-ups taking advantage of OKRs to set ambitious goals, align their teams, and accelerate their path to success. For the full backstory, see our complete OKR history.

Before we get started, it is important to clarify one thing: OKRs are not a performance management tool. It might feel weird to some not to be able to attach bonuses to the Key Results, but it's proven time and time again that OKRs don't work well with compensation goals. You'll still talk about stretch goals, metrics, and measurements. But if you're rolling out OKRs to get more control over your team, you'll get an unpleasant surprise.

What is the purpose of the OKR framework?

The main purpose of the OKR framework is to be a compass for your org.

Teams can be seen as vectors that are pointing their effort in certain directions. A Marketing team can choose to explore content marketing opportunities, or it can focus on conference sponsorships. Those are two different directions. Your Sales team can go after the SMB or the Enterprise market. Again, two different directions.

The challenge for most organisations isn't to get teams to work on things. The biggest challenge is to make sure that all team vectors are constantly pointing in a similar direction. Without OKRs, teams can drift in different directions.

This is where OKRs come in. The #1 job of the OKR framework isn't to put pressure on your teams. It is to act as a North Star for all teams. Beyond the stretch goals, OKR cycles, and check-ins, OKRs offer a single language for focus, as well as a clear structure to align team goals to company objectives.

Without OKRs, you might have 5 teams using 7 different approaches to talk about their strategy. With OKRs, it becomes effortless to go from one strategy to the next, as they're all using the same terms and rules. The result: you get a clearer picture of alignment. Or, more accurately, you get a clearer picture of all the misalignments. Only then can you start to work on re-aligning the teams.

Understanding (and explaining) the true purpose of OKRs will make it 10x easier to roll out the framework. It will help teams avoid wasting time on endless debates around the Key Results, and instead focus more of their attention on whether or not their quarterly goals align with their peers'.

The 3 components of the OKR process

While OKRs only have 2 letters in the name (Objectives and Key Results), I find it useful to keep projects (or initiatives) as part of the picture. It helps explain the difference between Key Results and traditional projects, which is the #1 source of confusion for new teams.

If you ask around your company what people think an objective is, or what the term key result represents, then there's a significant chance that they'll tie this back to the projects they're working on:

• “My objective is to build the new onboarding workflow”
• “My key result? Update all the marketing copy”

It should be expected to see people gravitating to an activity-centric meaning of OKRs – projects is what we do most of the day. But, those are deliverables and don't really match the definition of measurable goals. It's important to clarify what an OKR is in the specific context of the framework.

Here's a simple way to understand how the roles of Objectives, Key Results and initiatives (or projects) differ:

• Objectives: where do we want to be at the end of the quarter? (direction)
• Key Results: how will we measure progress? (outcomes)
• Projects / Initiatives: what are our best bets to get there? (work)

Again, a common mistake is to list projects as Key Results. But a project is a deliverable (output), not a goal (outcome). Your KRs measure the impact of your projects, not whether they shipped.

Writing good Objectives

A good Objective should be inspiring and easy to understand by anyone in your org. It's a short, qualitative statement that sets the direction for the quarter. If you read it out loud, someone in another team should be able to understand what you're going for, without needing to look at the numbers.

Writing good Key Results

Good Key Results will help you measure progress toward your company or team Objectives. A simple way to write good Key Results is to embrace the SMART framework for your goals. This methodology will help you make sure that you cover all required aspects of a good Key Result, including making it attainable and time-bound.

A few practical rules I use with teams:

• Key Results should have an owner. Their job is to track progress and share feedback with the org.
• Key Results should not be binary. It will be difficult to get a sense of progress if you can't measure it over time.
• Use leading indicators of success for long-term projects. Don't wait for a project to be released to start building your confidence in the results.

And here's the test I keep coming back to: if a Key Result goes off-track, would you change your plans? If the answer is no, it's not a Key Result, it's a vanity metric.

A simple OKR example

Objective: Make our onboarding experience something users actually enjoy
↪ Key Result 1: Increase activation rate from 32% to 50%
↪ Key Result 2: Reduce time-to-first-value from 8 days to under 3
↪ Key Result 3: Lift week-1 retention from 41% to 60%

Notice what's there and what isn't. The Objective doesn't mention metrics. The Key Results are all measurable. None of them are projects or tasks. Those come later as initiatives.

For more patterns by function, browse our top 10 OKR examples for beginners or the full OKR examples library.

Good vs. bad OKRs

The difference between OKRs that drive a team forward and OKRs that gather dust isn't subtle. It usually shows up in the first read.

You can spot a weak OKR before the quarter even starts. The signs are pretty consistent.

You'll find a couple of examples below to illustrate the difference.

Example 1: bad OKR focused on an initiative👇

A Product team has been running their beta for the past 6 months. Their users are happy, the product has reached maturity, and the product team has decided that they can start billing their customers. They identified Stripe as the best solution to handle the subscriptions.

They start the draft of their OKRs plan, but they're struggling a bit to finish it. The team has listed the Stripe integration as their Objective, but they can't find the corresponding key results and projects.

• Objective: Build a Stripe integration to start billing our customers
• Key Results:?
• Projects:?

The issue here is that building a Stripe integration is more of an output than an outcome. It's one of the tasks to complete if you want to get paid customers, but having a billing system doesn't guarantee conversions—it just makes it possible for people to subscribe to your service if they want to.

But, we can get to the  Objective by asking why  we’re working on an output:

• Q: Why do we want to integrate with Stripe?
• A: So that users can subscribe online.
• Q: Why do we want users to subscribe online?
• A: To have paying customers!

Having paying customers sounds much more like the outcome that we're after. Now, we can rewrite our OKR like in the example 2 below.

Example 2: good OKR focused on impact👇‍

• Objective: Have happy paying customers
• Key Results: revenue, trials, retention, number of customers
• Projects: build a Stripe integration, launch a marketing campaign, build a referral program, etc.

There are notable differences with our new OKRs plan:

• It's not engineering-centric anymore. Having happy paying customers is something that many teams can contribute to. Marketing, Sales, and Support can also start thinking about ways to help the business be successful.
• Stripe is just a bet now. Imagine if, for some reason, Stripe is not the right tool for the job. In our first example, our team would have been unable to think about alternatives because we set Stripe as the Objective. But in this example, what matters is to convert users to paid, and we could simply email them an invoice.

The simple formula to write great OKRs

John Doerr came up with a simple formula to write your OKRs.

I will ___________ as measured by _____________."

The first blank represents the Objective, and the second blank is about the corresponding Key Results. This is a great way to separate the qualitative aspect of an Objective from the quantitative function of the Key Results.

OKRs vs KPIs: what's the actual difference?

This question comes up constantly, so let's clear it up. Both frameworks use metrics, and you'll often find KPIs inside your OKRs. But they serve different purposes:

• KPIs are a set of metrics used for monitoring the performance of an entire system. They're like the dashboard of a car: speed, fuel, engine temperature. You watch them continuously, and they stay relevant for years.
• OKRs are used to improve the performance of a specific part of a system over a fixed period. They're the destination you're driving toward this quarter.

You can have a KPI like 'customer churn rate' that you track every month. You'd only turn it into an OKR when you decide to actively reduce it, say from 5% to 3% by the end of Q2.

KPIs answer 'how are we doing?'. OKRs answer 'what are we changing?'.

For a deeper comparison with side-by-side examples, see OKR vs KPI: key differences, examples, and how to use both.

What are the benefits of OKRs?

OKRs improve focus by limiting the set of competing priorities. The best teams I've worked with use a simple 3x3 matrix to start: a maximum of 3 Objectives per team per quarter, with no more than 3 Key Results per Objective.

This means you need to identify the most important things to change each quarter, but also what should be put on the sideline. Saying no to good ideas is often where the real value sits.

The other way the OKR process can improve focus is by acting as a periodic reminder of what's important. When you couple the goal-setting framework with weekly goal tracking, it becomes really easy for team members to keep their top priorities in mind. Every project discussion happens with the right context.

A few other benefits worth calling out:

• Accountability: Having different people in charge of updating progress on the Key Results fosters a greater sense of ownership. Achieving goals is a collective effort, but you increase your chances of success by putting individuals in charge of sharing progress updates.
• Adaptability: Weekly check-ins give teams an opportunity to adapt their tactics in response to changing circumstances. The purpose of the check-in is to answer one question clearly: do we need to do things differently?
• Risk reduction: Doing regular check-ins will surface problems early. Looking at progress trends during the OKR cycle helps you see when things are getting off-track and push people to take action before it's too late.
• Better meetings: When everyone is aligned on Objectives, conversations between leadership and the team shift from outputs to outcomes. Expectations become clearer, and the team has more freedom to decide the best way to get there.

For more on the upside, see why we say OKRs are effective and the benefits of setting OKRs for the individual contributor.

What OKRs are not

A lot of teams adopt OKRs and end up with something that looks nothing like the framework. Here's what to watch for.

OKRs are not a to-do list. If your Key Results read like 'launch X, ship Y, hire Z', you've written a project plan dressed up as a goal. Key Results measure outcomes, not deliverables.

OKRs are not a performance management tool. Tying OKRs to bonuses or performance reviews kills the framework. Teams stop setting ambitious goals because the cost of missing one is too high. If you want stretch goals, you have to make it safe to miss them.

OKRs are not a top-down directive. The whole point is that teams contribute to setting them. When OKRs are dictated by leadership and pushed down, you get compliance, not commitment.

OKRs are not your roadmap. Your roadmap is the list of bets you're making. Your OKRs are the outcomes you're trying to drive. They should inform each other, but they're not the same thing.

How to write your first OKRs

Here's the shortest version of the process I can give you.

1. ‍Pick a theme
   ‍What's the one thing your team needs to change this quarter? Growth, retention, quality, speed? Don't try to do all of them.‍
2. Write the Objective
   ‍One sentence. Inspiring. No metrics. If you read it out loud, someone in another team should understand what you're going for.‍
3. Add 2-4 Key Results
   ‍Each one is a number with a starting point and a target. Mix leading and lagging indicators where you can. Make sure each one has an owner.‍
4. Sanity-check with the off-track test
   ‍For each Key Result, ask: 'if this goes off-track, would we change our plans?'. If no, replace it.‍
5. Set up your check-in rhythm
   ‍Decide when you'll update progress (weekly works best) and who's responsible for each Key Result.

That's it. Don't spend three weeks workshopping your OKRs. Get a draft out, run a cycle, and iterate. Momentum beats accuracy.

Need a head start? The OKR Starter Kit gives you pre-built OKRs you can import and run today, or you can use Tability's AI to draft OKRs in seconds.

How to score OKRs – and why you shouldn't copy Google

Google came up with a grading system that recommends aiming for a 60-70% completion of your OKRs at the end of the quarter. The idea is to push your team to set ambitious goals, which means that it should be hard for them to achieve 100% of their target. This sounds great in theory, but it hardly works in practice because most organisations expect goals to fall in the 80-100% range.

Say that your Marketing team reports mid-quarter that they have reached 35% of their leads target. Google would consider that to be great, but many people would have a hard time casting the same judgement. We'd expect the team to be closer to 50%.

Tips to grade your OKRs:

• Stick to the same grading scale that you use for other KPIs. If you celebrate achievements around 80-100%, then apply the same expectations to your OKRs.
• Keep track of progress every week. Grading your OKRs weekly will help you identify issues early on.
• Apply a confidence level to your OKRs. Scoring OKRs is about more than reporting your current metric. You should indicate your confidence level, and add any notes that can help others understand what's going on.

If you want to go further, you can read our complete OKR scoring guide.

Frequently asked questions about OKRs

What does OKR stand for?

OKR stands for Objectives and Key Results. The Objective is the goal you want to achieve, and the Key Results are the measurable outcomes that show you're making progress.

Who invented OKRs?

OKRs were created by Andy Grove at Intel in the 1970s and popularised by John Doerr, who introduced them to Google in 1999. They've since been adopted by organisations of every size around the world.

How are OKRs different from KPIs?

KPIs are metrics you monitor continuously to track business health. OKRs are time-bound goals you set to change something specific over a quarter or year. KPIs answer 'how are we doing?'. OKRs answer 'what are we changing?'.

How many OKRs should a team have?

Three Objectives per team per quarter is the sweet spot. Five is the absolute ceiling. Each Objective should have 2-4 Key Results. More than that and your team will lose focus.

Are OKRs and SMART goals the same thing?

No, but they overlap. SMART is a framework for writing a single goal (Specific, Measurable, Achievable, Relevant, Time-bound). OKR is a framework for structuring goals across an organisation. Good Key Results are usually SMART, but OKRs add the qualitative Objective on top.

Should OKRs be tied to performance reviews or bonuses?

No. Tying OKRs to compensation makes teams sandbag their goals to ensure they hit them. The framework only works when it's safe to set ambitious goals and miss some of them. Keep OKRs and performance management separate.

How often should you check in on OKRs?

Weekly. Anything less frequent and OKRs become annual goals that fade into the background. A 10-15 minute weekly check-in is enough to update progress, surface risks, and keep the team aligned.

What are good OKR software?

Good OKR software makes weekly check-ins effortless, surfaces progress trends, and keeps your goals visible without forcing the team into a heavy reporting process. The right tool depends on your size and how outcome-driven your culture is. See our guide to the best OKR software for a full comparison.

Can OKRs work for small teams?

Yes. OKRs aren't just for enterprises. Two-person startups can run OKRs effectively, often more easily than large organisations because there are fewer dependencies. Start with one or two Objectives and build from there.

Wrapping up: 10 common mistakes to avoid

Ok, here’s one more thing! OKRs are hard, but there’s a real payoff at the end. With that being said, you don’t have to repeat mistakes that other people have gone through.

Here's a list of common pitfalls to avoid as you go on your OKRs journey:

1. Having too many OKRs: start simple with 3 Objectives, and 3 Key Results per Objective.
2. Turning the roadmap into OKRs: don't try to capture everything that you do as a Key Result.
3. Cascading instead of aligning: Most teams want a tidy org chart of cascading goals. In practice, that creates rigidity and dependencies that slow everyone down. Here's how we align OKRs at Tability, because cascading sucks.
4. Having only one owner for all the Key Results: spread ownership of the key results across the teams. No one should have more than 7 items to update every week.
5. Skipping the weekly check-in: OKRs without weekly check-ins are just annual goals. The framework only works if you're updating progress every week and adjusting course when needed. See our simple weekly ritual to track OKRs.
6. Tracking business-as-usual with OKRs: business-as-usual still needs to happen! No need to create OKRs for it, you can simply divide your efforts between 70% OKRs, and 30% BAU.
7. Using a complex spreadsheet: the harder it is to find and update the OKRs, the more reticent the team will be. Use the right tool to make OKRs check-ins a breeze.
8. Being too reactive: don't panic if your OKRs are suddenly in the red. Wait a couple of weeks to see if it was a blip or a trend.
9. Being too ambitious: team morale will be low if all the goals are so hard that no one can achieve them. Help people get early victory to build momentum.
10. Not empowering your teams: OKRs can only work if people are empowered to take action. Make sure that you have the right culture to support the framework.

What's next

Read our OKR best practices and tips to make goals easier to manage.