OKRs: Objectives and Key Results Guide

What are OKRs?

OKRs are a goal-setting framework that helps organizations define priorities, track progress, and get everyone on the same page. OKRs aim to get all the members of an organization focused on its critical priorities.

History of OKRs

The OKR framework was developed by Andy Grove, former CEO of Intel, in the 1970s. Grove introduced the concept in his book, “High Output Management,” where he described OKRs as a simple yet powerful way to motivate teams around a common set of objectives.

In the 1990s, John Doerr, a former Intel employee and venture capitalist, introduced OKRs to Google’s co-founders, Larry Page and Sergey Brin. Since then, the framework has been adopted by many leading technology companies and startups, including LinkedIn, Twitter, and Uber.

Key components of OKRs

The OKR framework actually consists of two main components:

• Objectives (WHAT is to be achieved)

Objectives are the high-level strategic goals that an organization, team, or individual wants to achieve by a certain time. These goals should be clear and inspiring, and set a course for the organization. Objectives typically are qualitative and resonate with the organization’s mission and values.

• Key results (HOW we plan to achieve the objective)

Key results are the quantitative outcomes (typically expressed as numbers or percentages) that indicate progress toward the stated objectives. They should be specific and time-bound, much like SMART goals, to provide a clear metric for success. Key results make it easy to assess progress and determine whether the objective has been met.

OKR Timeframe

• Annual OKRs

Annual OKRs are the long-term strategic goals and priorities of an organization, a sort of high-level roadmap directed by the organization’s mission and vision.

• Quarterly OKRs

Quarterly OKRs are shorter-term goals that break down the annual goals and priorities into more manageable objectives. These quarterly OKRs allow the organization to adapt to changing circumstances throughout the year.

• Monthly OKRs

Monthly OKRs are even shorter-term goals that further break down the quarterly goals. These allow organizations to quickly respond to new opportunities or challenges and are particularly useful for fast-paced or rapidly changing industries.

So, What is the difference between OKRs and KPIs?

KPIs and OKRs are different ways to measure and frame your goals, and one does not exclude the other. While KPIs are the metrics that reflect performance, OKRs are the goal-setting framework to help organizations improve performance and focus on what matters in order to do so.

KPIs measure performance but don’t tell you what needs to improve to grow those numbers. They are high-level business performance indicators that you track regularly (quarterly, monthly, weekly, and so on).

OKRs help you decide what needs to be changed or improved. When you’ve decided on what areas are central and need improvement, you set an Objective for that area and add Key Results for measuring your progress towards this Objective.

Benefits of implementing OKRs:

• Better Alignment: OKRs unite teams and individuals around shared goals, ensuring everyone is working toward the same mission.
• Improved Prioritization: They help prioritize tasks by breaking down broad objectives into specific, measurable actions.
• Focus on Results: They emphasize achieving measurable results over just completing tasks.
• Clear Accountability: OKRs establish clear responsibility for achieving objectives, providing transparency on progress.
• Empowered Teams: OKRs empower teams by showing the impact of their efforts, motivating them to contribute creatively to achieving goals.

How To Use OKRs

• Create the objectives and key results

The first step in implementing the OKR approach is to set a specific set of objectives and the key results. Once these are defined, they are communicated to all stakeholders.

• Make it measurable

Key results should be assessed so that every team member can check their progress.

• Review OKRs regularly

OKRs are not fixed, they change depending on the circumstances. For example, if the company goals change, you must also adjust the OKRs.

To spark some ideas, here are simple examples of OKRs for product management at various stages of the product life cycle.

Discovery Stage

Objective: Validate the problem-solution fit for a new product idea.

• Key Result 1: Conduct 50 customer interviews.
• Key Result 2: Achieve a 40% problem validation rate.
• Key Result 3: Create 3 prototypes to test with 30 users.

Development Stage

Objective: Build and launch a minimum viable product (MVP) for a new feature.

• Key Result 1: Deliver the MVP by Q2.
• Key Result 2: Achieve an 80% feature completion rate.
• Key Result 3:Reach 1000 early adopters to gather their feedback.

Growth Stage

Objective: Increase user engagement and retention for an existing product.

• Key Result 1: Improve daily active users (DAU) by 20%.
• Key Result 2: Reduce churn rate by 15%.
• Key Result 3: Increase average session duration by 10%.

Optimization Stage

Objective: Enhance user experience and satisfaction with an existing product.

• Key Result 1: Improve net promoter score (NPS) by 10%.
• Key Result 2: Reduce bug reports by 30%.
• Key Result 3: Increase user ratings by 0.5 stars.

In summary, OKRs are a critical asset for product teams, providing a structured and goal-oriented approach to product development. By defining clear objectives and measurable key results, product teams can align their efforts, track progress, and continuously improve, ultimately driving product success and customer satisfaction.