Best Practices Of OKR Goals
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This document provides guidance on best practices for setting OKR goals. It defines Objectives and Key Results, and explains why OKRs are an effective goal-setting framework. Regular weekly check-ins and closed-loop feedback are identified as critical for connecting goals to results. Examples of objectives and key results at both the company and department level are also provided.
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EXAMPLE: Company Top-Level Q1-2016 Objectives
Owner: CEO
• Objective 1: Sell $15M in Bookings
-KR1 [for VP, Sales]: Win 1,500 Deals worth $15M in Bookings by 3/31/16
-KR2 [for VP, Marketing]: Generate 75,000 Marketing Qualified Leads
-KR3 ….
• Objective 2:
• Objective 3:
• Objective 4:
• Objective 5: Invest Effort in LT Growth [Mkg & Prod may be here]](https://image.slidesharecdn.com/updatedokrs-151124100601-lva1-app6891-151218174322/85/Best-Practices-Of-OKR-Goals-25-320.jpg)
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EXAMPLE: Department OKRs - Marketing
Owner: CMO, Name
• Objective 1: Generate 75,000 MQLs
[Aligned to CEO-Q1-2016-O1-KR2]
- KR1: Action Verb
- KR2:
- KR3:
• Objective 2:
- KR1: Action Verb
- KR2:
- KR3:
• Objective 3: Increase Q2 Pipeline by X # of Opportunities or by $Y Value (of Q4 $ARPA)
- KR1: Action Verb
- KR2:
- KR3:
• Objective 4: Long Term Marketing Investment (Brand, PR, experiments, etc.)
- KR1: Action Verb
- KR2:
- KR3:](https://image.slidesharecdn.com/updatedokrs-151124100601-lva1-app6891-151218174322/85/Best-Practices-Of-OKR-Goals-26-320.jpg)
Best Practices Of OKR Goals
- 1. ™ Best Practices Of OKR Goals (and OKR Goals 2.0)
- 2. ™ ™ Actionable & Correct Definitions 1 2 3 Tactical Insights Why OKRs?
- 3. ™ Why OKRs?
- 4. ™ Why OKR is the Most Effective Goals System • Improves on Management by Objectives (MBOs) and S.M.A.R.T. Goals -Allows to break up goals and objectives into smaller steps (KRs) -Cascade alignment - connect your organization to the key objectives -Set quarterly, not annually, and progress measured in 12 check-ins -Collective organizational wisdom - 70% Bottoms-Up Alignment -Transparency and accountability • The modern organizational goals framework used by top companies:
- 5. ™ •Amazon •Anheuser-Busch •Accenture •Adobe •Box •CareerBuilder •Dell •Deloitte •Department of the Navy •Dropbox •Edmunds.com •Twitter •Gap •GE •Google •GoPro •Intel •LinkedIn •Microsoft •Moz •Netflix •Oracle •Panasonic •Schneider Electric •Sears
- 6. ™ Popularity of OKRs VIDEOGoogle’s OKR management has 250,000+ views!
- 8. ™ OKR Definitions • Objectives (Os) - It is what you want to achieve - Quarterly (but for junior individual contributors can be monthly) - Must be measurable with one or a few KRs - Can be Operational or Aspirational - Must be able to pass/cascade down or across for alignment • Key Results (KRs) - It is how you will know whether you are achieving your objective - It is the metric which measures the Objective (Complete/Incomplete is measurable) - If it’s not a metric then the KR is a Milestone (date when the Objective is due) • Tactics - KRs inform the “What” while Tactics inform the “How” - Should be planned for each Key Result
- 9. ™ I will {Objective} as measured by {Key Results}
- 10. ™ Cadence: Annual Goals > Quarterly Objectives > KRs 2016 Annual Goal 1 Q1 Q1 Objective 1 KR1 Tactic 1 Tactic 2 Tasks 1,2,3,4,5 Tasks 1,2,3,4,5 Tasks 1,2,3,4,5 Tasks 1,2,3,4,5 KR2 KR3 Q1 Objective 2 Q1 Objective 3 Q2 Q3 Q4 2016 Annual Goal 22016 Annual Goal 32016 Annual Goal 4 Q1 Objectives (the “Where”) Q1 KRs (the “What”) KR1 Tactics (the “How”)
- 11. ™ But setting OKR goals is not enough to achieve success in execution, performance and results!
- 12. ™ The MOST CRITICAL success factor that connects goals to results: Weekly Progress Check-ins with Closed-Loop Feedback
- 13. ™ Regular Weekly Check-Ins & Feedback Loop • Review and check-ins must be done weekly to achieve OKR progress -Don’t just fall into the trap of “set and forget” which is a big mistake -There are 12 weeks in each quarter but there is an initial grace period 2 weeks -The rest is a 10% step - a lot happens during such cycle towards a quarterly goal -Must track and review OKR status - oversee progress or course-correction • High-performance organizations have a weekly status/progress report that is reviewed by each manager or DRI (Directly Responsible Individual) -In each weekly report, a worker updates the status of her/his progress made towards the goals -Be proactive and intentional about praise on progress or work collaboratively to course-correct (use a carrot, not a stick: 80% praise : reprimand)
- 14. ™ What is OKRs 2.0 ? Combines the power of OKRs with Regular, Continuous Feedback: OKR Goals Management combined + Weekly Progress Check-ins (Closed-Loop Feedback) + Employee Engagement Metrics
- 16. ™ Accountability & Responsibility • Without responsibility, there is no accountability • Always have only one DRI (Directly Responsible Individual) for any OKR and for each KR within an Objective if it will be cascaded down • An “owner” of an OKR is not necessarily the group manager – a DRI just serves as a traffic cop (like a Project Manager, aka Scrum Master), not necessarily department head with any direct reports • Also important for owning the “retrospectives” - the DRI / Owner is the one who is responsible for summarizing the learnings and suggesting improvements for the next quarter or year
- 17. ™ Timing • Must begin the process before a new Quarter starts • Must ideally start 5 Weeks prior to the new Quarter (or 3 weeks minimum) - T-5: CEO meets with executives to discuss Quarterly Objectives (or annual Goals) - T-4: CEO & executives document the planned high-level Quarterly Objectives – CEO hands down these next quarter Objectives to the executives who need to come up with some KRs - T-3: Share these with the OKR Owners (Directly Responsible Individuals); Executives hand down their Objectives to the Managers or the “DRIs/Owners” who begin to work with teams and individuals to create their OKRs - T-2: Teams complete their OKRs and share those with the Executives and Individuals - T-1: Individual finalize their OKRs • New Quarter: 2-3 Week grace period - OKRs can be still iterated slightly and there is a 2-3 weeks grace period after the Quarter starts (Executives must present their completed OKRs at the Quarterly Business Reviews) • Annual planning – very early stages should begin as early as August/September
- 18. ™ Planning • Requires discipline • Limit OKRs to 3-5 Objectives / 3-5 KRs • Bottoms-Up should be 70% of the process, ensures commitment & buy-in - Taps into collective wisdom and domain expertise of your team - Not the high level but the actual KRs and Tactics • Agile process and with iterative cycles • Resource Allocation –people, money, and time • The OKRs must be thoughtfully prioritized by each OKR Owner • Everyone needs to summarize the “Tactics” for each KR during the OKR planning process and before OKRs are set in place for next quarter • Baseline KRs – if you don’t know the actual metrics
- 19. ™ Implementing • Show Long-Term Goals and Quarterly Objectives (Q3 / Q4) • Ensure executives’ and departments’ Objectives link directly to the company goals and specify that clearly (i.e. to what Ox-Kx they link) • Have separate objective focused on LT Growth
- 20. ™ Operational vs. Aspirational • OKRs should not all be unachievable as some OKR experts suggest -many can be “Operational” and thus achievable, despite being “stretch goals” • If the implication is that achieving 70%-80% consistently should be considered a good outcome then it will become quickly demotivating to everyone that they are always ending up hitting 70%-80% of the aim
- 21. ™ Writing OKRs - The Importance of Language • Phrase OKRs in the language relevant to the targeted group • Use action verbs to start each O or KR -All KRs should be actionable verb as it makes it more clear and more actionable when cascaded down as an Objective • When in doubt use experimental phrases to improve baseline: -Complete X experimental lead generation projects in Q1 to grow lead flow -Complete X of PR Projects in Q1 to improve brand awareness -Invest 10% of time each week into non-measurable, experimental, “serendipitous” marketing
- 22. ™ Keep In Mind • You don’t know what you don’t know -Can’t anticipate everything - need to acknowledge that there are many unknowns -Planning is by definition done in the past with what you knew at the time • Running experiments is critical -It’s necessary to increase performance over time • You may achieve every KR, while not every Objective -That’s OK as long as you are learning and can apply the learnings in the next quarter • It’s OK to fail -But it’s important to plan thoughtfully in advance, then analyze the gap in a retrospective assessment (as aforementioned, the Owner / DRI is responsible for this) and plan for the next quarter using the insights
- 23. ™ Grading • Purpose: for learnings and improvements, not for performance evaluation • After the end of the quarter, each DRI grades Key Results from 0 to 1 • Key Result Grade is not the same as KR measurement - If your company discovered that a given KR had little business value and stopped it mid- quarter, you have still achieved a good business outcome and deserve a high grade • Objective’s grade is an average of KR grades • Grade of 1.0 for Objective is reasonable for operational objectives and grade of 0.7-0.8 is good for “aspirational” - Encourage setting ambitious objectives when possible for the following quarters • Always base employee evaluations on KR metrics and never on OKR grades
- 24. ™ EXAMPLE: Company Top-Level 2016 Annual Goals Owner: CEO • Goal 1: Sell $100 Million in Bookings in 2016 - Q1 Objective: Sell $15M in Total Bookings - Q2 Objective: Sell $25M in Total Bookings - Q3 Objective: Sell $25M in Total Bookings - Q4 Objective: Sell $35M in Total Bookings • Goal 2: • Goal 3: • Goal 4: • Goal 5:
- 25. ™ EXAMPLE: Company Top-Level Q1-2016 Objectives Owner: CEO • Objective 1: Sell $15M in Bookings -KR1 [for VP, Sales]: Win 1,500 Deals worth $15M in Bookings by 3/31/16 -KR2 [for VP, Marketing]: Generate 75,000 Marketing Qualified Leads -KR3 …. • Objective 2: • Objective 3: • Objective 4: • Objective 5: Invest Effort in LT Growth [Mkg & Prod may be here]
- 26. ™ EXAMPLE: Department OKRs - Marketing Owner: CMO, Name • Objective 1: Generate 75,000 MQLs [Aligned to CEO-Q1-2016-O1-KR2] - KR1: Action Verb - KR2: - KR3: • Objective 2: - KR1: Action Verb - KR2: - KR3: • Objective 3: Increase Q2 Pipeline by X # of Opportunities or by $Y Value (of Q4 $ARPA) - KR1: Action Verb - KR2: - KR3: • Objective 4: Long Term Marketing Investment (Brand, PR, experiments, etc.) - KR1: Action Verb - KR2: - KR3:
- 27. ™ EXAMPLE: “Acceptable” vs. “Bad” of Non- Quantifiable, Yet Still Measurable Objectives and KRs • Bad (i.e. not measurable): - Build a brand - Become a good sales rep - Improve sales alignment with marketing • Acceptable but not Great: (i.e. they are also actionable and not ambiguous): - Launch a PR campaign to improve brand awareness - Sales Team to meet with Marketing team for an aligned Go-To Market meeting every Monday - Achieve your quota
- 28. ™ Spotlight on Google OKR Process & Other Ideas • OKR – Objectives & Key Results - Google OKR Video: https://www.atiim.com/google-okr-objectives-key-results-video-transcript/ - 15 Insights from the Google OKR Video: https://www.atiim.com/blog/15-great-insights-from-the-google-okr-video/ - Ideas from Google OKR to Evolve the Process: https://www.atiim.com/blog/ideas-to-evolve-the-okr-process/
- 29. ™ Thank you!