Here's why OKRs are effective

The Objectives and Key Results (OKRs) framework is a goal-setting methodology that was introduced at Intel in the 70s. It then got popular once John Doerr took it to Google in 1999. Fast forward to today, and OKRs have become the go-to framework for setting goals in companies.

This post will look at what makes OKRs an effective approach to tracking goals, and we'll also look at some of the common pitfalls to avoid.

How do OKRs work?

Behind the scary acronym is a simple system to write your goals. You will use Objectives to set the direction and Key Results to have a measurable way to see progress. When I explain OKRs, I also like to keep projects as part of the picture as it's quite helpful to explain the difference between Key Results and traditional projects or initiatives.

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

Every quarter you will set some company OKRs at the top, and teams will create their own OKR plans underneath that align with the top-level goals.

This should give you an overview of the framework, and you can read our complete OKRs guide if you want to go further.

Who will benefit from OKRs?

A word of caution:  OKRs aren't for everyone.

It's not hard to find sceptical posts and tweets about the benefits of the framework. But if you dig a bit deeper, it's often due to situations where teams try to apply the OKRs model when it's not needed.

OKRs shine best when you have long-term goals that require significant focus, and a not-so-clear path to achieve said goals. In this scenario, the Objectives and Key Results will act as a beacon while your teams iterate to find the best way to progress toward your North Star.

OKRs will feel excessive if you apply them to project-based businesses or KPIs-driven teams. For instance, a design agency is unlikely to find great value in OKRs — they work on client projects, and the scope of the work is often fairly well-defined. Sales teams may also be reticent to adopt OKRs as they're already working with clear KPIs to achieve their targets.

But, if you're a team building and selling products or services that get improved every month, then it's quite likely that OKRs will help. That's especially true for remote teams and large groups that have many people spread across different functions.

What makes OKRs effective

Now that we've set up the scene, we can look at what makes the Objectives and Key Results framework particularly effective for goal-setting and alignment.

1. OKRs give a unified language for focus

Most teams have goals. But a common issue for organisations is that different teams will use different terms to describe their focus. The Product team could be using "themes and metrics", the Marketing team will present their "big rocks", and the Customer Success teams will outline their "priorities and measures".

The lack of standard language makes it hard to get alignment as there's no simple way to map goals across teams.

Standardisation is one of the first problems that OKRs solve. It gives organisations a common set of terms to write quarterly goals. Now you can easily go from one team to another and use the same questions:

• What are your Objectives?
• What are the corresponding Key Results?

You may notice some misalignment at that stage, but I'd argue that it's a good thing — you've just increased visibility in your org, and can now clearly see the existing dysfunctions.

2. Layered OKRs simplify alignment

Once everyone uses the same language for focus, it becomes much easier to rally teams around a North Star. You start by defining a small set of OKRs at the top, and then let your team derive their own OKRs from it by focusing on their strengths.

This model works because it shifts the conversations from outputs to outcomes. It is far easier to get alignment by discussing the expected impact at the end of the quarter, than debating the order of items in the backlog of 6 or 7 teams.

OKRs will make meetings more effective and facilitate communication between leadership and the team. Expectations become clearer, and the team has more freedom to decide the best way to get there.

3. Bottom-up goals create more engagement

A healthy implementation of OKRs should see the team participating in the definition of their Objectives and Key Results.

This is a key step to create an outcome-driven culture. You no longer have goals that are the sole property of the executives. Teams will now share the ownership of their future instead. They'll be working on goals they defined instead of just coming to the office to achieve targets set away from them.

This bottom-up approach to goal-setting will empower people and create more engagement. We feel more compelled to achieve an objective if we write it ourselves.

4. Weekly check-ins make your strategy more agile

Knowing how to set and align OKRs is important, but your OKRs won't be effective unless you have good tracking in place. And it's not just us saying that:

• Peter Kappus writes that "check-ins are the most important part of OKRs".
• Felipe Castro cautions people not to let their OKRs turn into New Year's resolutions.
• Christina Wodtke tells us that "cadence is probably the single most important thing".

Weekly check-ins are important because they allow you to observe how much progress has been made, and correct the course before it's too late.

Sometimes, you'll realise that you don't have the right Key Results. There will be over times when your roadmap will need adjustments. Then you will also see occasions when you see massive disruptions requiring a complete change of strategy (e.g. COVID-19).

OKRs coupled with fast feedback loops enable organisations to be truly agile.

5. Repetition maintains the right sense of urgency

Finally, one of the most significant benefits that OKRs give to teams is that it automates accountability. The weekly progress review meetings will serve multiple purposes:

• They will put the top priorities back at the top of their mind.
• They will allow everyone to see what's on-track or off-track.
• They will act as an anchor to make sure that all the work done that week stays relevant and in scope.

Of course, having OKRs doesn't guarantee that you'll achieve your goals. But it ensures that you'll get the best effort possible.

How to implement effective OKRs

There's a lot of literature about the benefits of OKRs, but not many practical guides around implementation. This is why we have created a set of resources to help you.

Start by reading our complete OKRs guide. Then you can check out our prescriptive approach that we call Flowing OKRs. It's a set of 4 principles and 15 OKR best practices designed to help you have a simple and effective rollout.

It's okay to start with a spreadsheet for your first round of OKRs, but you will soon need to use a proper OKRs-tracking platform to scale your process.Tability is a simple and intuitive goal-tracking platform that stays affordable as you grow — you can signup today and get started with one of the 40+ templates available.