OKRs are now the de facto framework for teams that want to put goals at the center. Its popularity is certainly tied to its simplicity (there are only 2 terms to know), yet it can be challenging for teams to understand how to use objectives and key results effectively.
This guide will give you a set of practical guidelines and formulas for writing OKRs that truly improve your processes as opposed to turning them into a chore that your team hates.
The difference between good OKRs and bad OKRs
Most teams have a set of things that they’re working on. It can be in a Jira backlog, in a Notion page, or in the head of the CEO – but there’s certainly a list of things to get done somewhere.
The challenge when writing OKRs is to avoid repeating that list of things. OKRs aren’t meant to be a replica of your roadmap, they should be a representation of the impact that you want to have over the next 3 months.
For instance, let’s take a team that wants to start charging customers for their product. Building a Stripe integration is a project that is likely to get on the backlog, but it doesn’t really capture the end goal. What the team really wants is to have paying customers at the end of the quarter. How they’re paying is secondary to that main objective.
This example is really important because it highlights one of the major risks with OKRs: writing the wrong objective can kill creative solutions.
If I say to the team “your objective is to build a Stripe integration”, then this is what people will focus on for the next 3 months. And I might end up with zero paid customers if it happens to be more complicated than we thought.
But, if I say to the team “get our first paying customers”, then we might give Stripe a try, and switch to manual invoicing later if Stripe looks challenging. Here we want to validate that people are keen to pay for our stuff, rather than making sure we know how to automate the entire subscription process.
So, here’s lesson one. Think carefully about what you really want. Good OKRs enable teams to think creatively and treat projects like bets. Bad OKRs entrench teams in dangerous positions, and push them to overcommit to bad initiatives.
Before writing OKRs: getting the right culture
We’ve addressed the risks of having bad OKRs, but there’s a second aspect that is important to consider: OKRs can have a disastrous effect on morale if they’re used in the wrong context.
As a concept, OKRs will almost always sound like a great idea to management: everybody has a clear set of goals, and your strategy is beautifully laid out in layers across your org. Who wouldn’t want that?
But, you cannot just dump the OKR process on a team that was mainly focused on delivering projects until then. What sounds like transparency and visibility to the C-suite can look like micromanagement and unnecessary reporting to others.
OKRs will only work if both leadership and teams get value. Implementing goals should not only help management communicate what’s important, but it should also be a powerful way for people to self-evaluate and take ownership of their execution.
OKRs are meant to be a beacon that allows individual contributors to adjust their focus and reevaluate existing bets without having to wait for feedback from the exec team.
Here’s what a bad OKR culture looks like:
- OKR are used as a reporting tool by management
- No one reads the progress updates
- There’s no discussion around outcomes
- People are spending a lot of time trying to cascade throughout the org
- Teams resent the process, question the value, and are looking for excuses to avoid engaging with their OKRs
By contrast, here’s what a good OKR culture looks like:
- Teams have a clear set of goals that they bought into
- Progress updates are shared and discussed every week
- Discussions around outcomes are used to adjust efforts rapidly
- Goals are aligned in an agile way that offers visibility without being a chore
- Teams are fully engaged with the OKR process and can clearly outline what their main priorities are
So, there will be a few questions for you to consider before you start rolling out OKRs. You won’t need to have all the answers right away, but you need to ensure that you'll invest in having the right environment for OKRs to succeed.
Check out our 50 tips for outcome-driven teams to start having these discussions.
John Doerr's formula for writing good OKRs
While OKRs were created by Andy Grove at Intel, it is John Doerr that made them popular among startups after introducing them at Google.
John’s simple formula for writing good OKRs is the following:
I will (objective) as measured by (key results)
This formula is a helpful way to understand the relationship between the objectives and the key results. And I find it practical to also add initiatives in that picture.
- Objectives: what you want to achieve at the end of the quarter
- Key results: how you’ll measure success
- Initiatives: what you’ll do to achieve success
Let’s take an example. A Marketing team launching a new campaign should not just write “grow leads” or “ship new websites” for their OKRs. Instead they should probably have the following OKR:
Objective: significantly increase the number of marketing qualified leads
Key results:
- weekly signups have increased from 120/week to 200/week
- Demo bookings have jumped from 17/week to 25/week
Initiatives:
- Ship new onboarding
- Improve the email drip feed
Best practices for writing good objectives
Good objectives have 2 main characteristics:
- They focus on future outcomes
- They can touch multiple teams
Project yourself at the end of the quarter
A good objective should describe the impact that you want to have at the end of the quarter. This is not about the business-as-usual activities, this is about something that you want to be true 90 days from now.
For instance, you might have a lot of production issues that are making your users unhappy. And you can decide to change that situation completely in the next 3 months. In this case your objective could be: “Bugs and technical debt are no longer making our users unhappy”. We’re signaling here that we want to change the status quo.
On the other hand, you should not write down “Fix 10 bugs in the next 3 months” if this is something that you’ve managed to do every quarter. That’s not a challenging task, nor is it something new that needs to happen.
You should reserve your OKRs to focus on important changes. You can use KPIs to monitor the rest.
Try to relate to multiple teams
Good OKRs should also touch multiple teams. Let’s take back to our first Stripe integration example. Saying “integrate with Stripe” is something that mostly concerns the dev team and someone in Marketing won’t think much of it. On the other hand, saying that we need to “get our first paying customers” is something that many people can rally behind.
Examples of good objectives and bad objectives
Here are a few examples of good and bad objectives to help. We also have a more detailed post about writing good objectives.
Best practices for writing good key results
Good key results should help you not only measure success at the end of the quarter, but also get a sense of progress and confidence during the quarter.
For instance, using a binary outcome (a project is shipped or not shipped) can be validated at the end of 3 months, but it will be hard to assess progress during said 3 months. The answer will be invariably “it’s not shipped yet” until it is – which makes it hard to understand if you’re on track.
Here are some important characteristics of good key results:
- They follow the SMART model
- They focus on outcomes rather than outputs
Follow the SMART model
The SMART framework is a simple approach for writing goals. It’s an acronym that stands for Specific, Measurable, Attainable, Relevant, and Time-bound. You can use it for any kind of goals, but it is particularly useful for writing good key results.
- Specific: your key result should help your team understand what the focus is. Avoid vague statements like “improve user support” in favour of something like “increase customer satisfaction from X% to Y%”.
- Measurable: the easier it is to track and monitor progress on your key results, the better you’ll be able to adjust your strategy. Find the metrics that best correlate with success, or look for alternative ways to measure success if your OKR is a long-running project.
- Attainable: key results should be challenging, but not impossible. Aim for something ambitious, but make sure that you don’t sap morale in the process.
- Relevant: each key result that you have should clearly tie back to its parent objective. Don’t write unrelated projects or goals under your objectives. Or maybe, consider re-writing your objectives if you feel strongly about certain key results that don’t fit in the current picture.
- Time-bound: you won’t have to worry about this as your OKRs should already have a clear timeline (usually a quarter).
Focus on outcomes rather than outputs
Your key results are not a roadmap that you need to deliver. There will be times when some of your key results will be critical projects, but for the most part, a good key result should capture what you want to achieve – and not how you’re going to achieve it.
The goal of that approach is to leave it to the team to figure out the how during the quarter. They’ll make bets that will eventually form a light roadmap, and they’ll decide what to drop or double on based on the impact that their work has on the key results.
So, don’t write key results like “ship the new signup flow” or “update the copy of the drip campaign”. Instead focus on the reason why you’re tackling these projects. This could be “increase lead activation by 30%” and “boost email click-through rates from 2.5% to 8%”.
Examples of good key results and bad key results
Below are a couple of examples to help. We also have a more detailed post about writing good key results.
How to write OKRs in 5 steps
Before you start: familiarise yourself with the definition of the OKR framework
Check out our guide to understand the meaning of OKR if you’re not familiar with the framework.
This post assumes that you have a good understanding of what objectives and key results are, as well as their relationship to projects and initiatives.
I’m not counting this as a step because it’s not really about the process of writing the goals – just some homework before your workshop.
Step 1. Find your OKR champions
You don’t need to involve 20 people to write your OKRs. Start with a small group that is going to be happy to champion the framework for the team or for the organisation. There will most likely be some skeptics (like with every change management) and it’s best to minimise disruption to focus on having a productive goal-setting session.
It’s also best to start with a top-down approach if you’re setting top-level OKRs. There will be a time in the future when goals can be set with a bottom-up approach, but it’s best to keep things simple at the beginning. It will often be easier to have the leadership team writing the first draft and then collaborate with the teams to adjust the key results.
Recommendations:
- Duration: set goals for the quarter, not the year.
- Frequency: your plan should be tracked weekly.
- Size: Limit yourself to a 3x3 format (3 objectives and 3 key results per objective), or even 2x3 if you can.
Step 2. Adopt a 3x3 structure for your first OKRs
Having too many OKRs is still the #1 mistake that teams make. The more goals you have, the harder it is to know what really matters.
The goal of having OKRs isn’t to capture everything that needs to be done. It is to signal the things that are critical for success. Having too many goals will muddle things and make it hard for people to make important judgement calls.
To keep things simple, I recommend having 3 objectives and 3 key results per objective to start. This will give you 9 key results to track and discuss on a weekly basis.
Step 3. Identify your objectives by looking at the future
"Alignment before metrics", is a statement that you need to keep in mind when you're using OKRs. It's easy to get sucked into debates around the key results, but these won't matter if your objectives are wrong.
You need to start by identifying the objectives that you want to achieve for the quarter. Simply put, you need to find a few statements that describe what needs to be different about your business or team, 90 days from now.
- Consider your customers, users, team, processes, etc
- Figure out the top 3 things that need to change in the next 3 months
- Write these down for your objectives
These statements should ideally focus on the impact that you have rather than just celebrate the internal completion of your tasks.
For instance, if better conversions of lead is critical. Write something like “our new self-serve onboarding is accelerating conversions” instead of “ship the new self-serve onboarding flow”.
If you’re struggling to identify areas of improvement you can combine the AARRR funnel and Product Lifecycle to figure it out.
At the end of this step you should simply have your 3 objectives, similar to the picture below.
Step 4. Turn the definition of success into key results
Once you know your objectives, you can start listing your key results underneath. As mentioned before, your KRs should follow the SMART rules and specifically be measurable, attainable, and relevant for their parent objective.
The right way to find your key results is to look back at your objectives and ask yourself the question:
What are the best measures of success for <objective>?
You should be able to find 3 metrics that best correlate to having completed your objective.
For instance, if your objective is to “have a product that customers love” then you can focus on:
- NPS
- User retention
- Number of daily/weekly/monthly active users
And for the objective of accelerating conversions, you can look at:
- Onboarding completion rates
- Number of weekly conversions
- Time-to-convert
Once you have your metrics, you can turn them into key results by applying the following formula.
Improve <metric> from <current value> to <desired value>
Note: It is important to think about pairing your Key Results to avoid bad side effects. For instance, you could hit a NPS goal if there is no growth and all the unhappy users are churning (only the few people loving your product remain). Pairing the NPS goal with an active user goal allows us to make sure that we have a growing community of happy users.
Now your plan is a bit more fleshed out, and you should be able to measure progress towards the objectives during the quarter.
Step 5. Start listing bets and initiatives under the key results
Before calling the OKRs plan done, I would highly recommend to list some of the big initiatives that can help you make progress on the Key Results. This is a simple way to double-check that you haven't listed projects as KRs, and it will help everyone to start connecting their North Star to their activities.
Don't overdo it! You're not trying to build the entire roadmap, but rather to have some general idea of what your plan can look like in terms of outcomes and outputs.
Dos and Don'ts when writing OKRs
Do: pick owners for your key results
Each Key Result should have a clear owner. It doesn't mean that they're doing all the work. It simply means that they're responsible for tracking progress and sharing feedback with the team and key stakeholders.
Do: implement a process to review OKR progress every week
Setting great goals is 25% of the job. Next, you will need to review progress periodically, adjust OKRs if needed, and make sure that your projects always align with the top priorities. Take a look at our OKR check-ins guide to see a simple process that you an adopt.
Don't track metrics that you cannot influence
Once you have a list of KRs you can do a simple test by asking the following question: "would we do things differently if this KR is off-track mid-quarter?" If the answer is no, then discard it—it's just noise in your OKRs plan.
Don't cascade your OKRs (align them instead)
It's very tempting to adopt a strict cascading approach to your OKRs where every goal is connected to a parent. In practice, doing is quite costly and rarely brings tangible benefits.
Instead, you can adopt a more flexible approach where teams align their OKRs to the top-level goals. This may sound similar but it is yields much better results.
How to set better OKRs with Tability's AI feedback
You can use Tability and its goal-setting AI to get direct feedback on your OKR plan. It is like a Grammarly for goals and it will provide you with an overall quality score and a set of recommendations to improve your OKRs.
- Create a new Tability account
- Follow the steps to add your OKRs to the plan editor
- Click on Generate analysis
Tability will analyse your plan and give you tips and suggestions to make sure that the OKRs are following the best practices outlined here.
What's next? How to track your OKRs
Now that you have your OKRs ready, check out our guide on OKR check-ins.