A Tactical Guide to Building Your First OKR
Kevin Fischer
Accelerating productive teamwork with Tetheros. Productivity wonk & technical founder. Aspiring polymath.
Objective and Key Results are the latest and greatest goal-oriented framework for teams and businesses.
OKRs live in the layer between outcomes and output:
Building a high quality OKR is confusing if you've never made one before.?In this post I'll break down the step-by-step process I use with my businesses and teams to create outstanding OKRs so you can copy and modify it for your purposes.
Don't start this journey simply because you want to "do OKRs".?The point isn't to adopt a framework for it's own sake.?Use OKRs to accomplish a specific goal at scale while driving reasonably high levels of accountability.
If this is your first time dabbling in this space, focus on creating a single, high quality OKR.?Quality matters a lot more than quantity.?Understanding the process the first time is almost as important as the actual OKR that you create with it.
The process has 9 steps and usually requires at least half a day or more to do well:
Let's jump in.
1. Define your team's mission, vision, and values
OKRs help you align your work with outcomes that matter which makes it important to define "what matters" to you.
A lot of teams, especially those in a highly bureaucratic environment, suffer from allegiance to the status quo.?You're more likely to break free of these constraints by defining and focusing on a clear long-term goal.
A good way to do this is by creating or updating your team charter.
I've found it helpful to revisit my team's purpose a few times a year and continuously reference it during planning.?If you already have a clear idea of why your team exists (along with everyone on your team), jump to the next step.
Make sure you can answer the following questions before proceeding:
Nothing else matters if you can't define your purpose.
2. Identify your team's top obligations
Most obligations are processes, products, or customers you're accountable for.?They may also be complicated, archaic, bureaucratic systems for large-scale corporate teams.
For example, in a large corporation there might be a team responsible for making sure conference rooms have the right audio equipment... and that's their only job.?In a startup, it might be portions of sales, development work, or lead generation.
Ideally your obligations align with your team's purpose, but the real world isn't always so neat.?Most teams usually have items they're responsible for that don't make sense on paper but have to get done anyways - doubly true for startups where everyone's wearing multiple hats.
Create a list of the top items your team supports.?A good test for whether or not an item belongs on the list is by asking, "would the company suffer if we didn't work on this for a month?"?If the answer is yes, it's probably a good candidate.
Don't put anything on this list that isn't extremely important to your team's bottom line.?It shouldn't be longer than 4-8 items unless your team is truly massive.
3. Create a wish list of future truths
All OKRs come with a due date.
Most practices suggest creating OKRs on a quarterly basis, which means creating one or more OKRs before the quarter starts, working on them throughout the quarter, then repeating the process for the next quarter.
An OKR is scored by how complete the Key Results are at the end of the time period you choose.?If you haven't already, determine the timeline of the OKR you're creating:
Now it's time to create some future truths.
Based on your timeline, purpose and obligations, write out 5-10 statements you wish would be true at the end of your OKR period.
For example, given a 90 day OKR period we might say, "Have 1,000 customers on the platform", "Collaborated with an influencer" or "Replaced all chalkboards with whiteboards".
Remember, this is a wish list - don't include anything that will just happen automatically.?Your achievements cannot be larger than your dreams.?Good items for the wish list:
4. Score each item on the wish list
Evaluate how high each item on the wish list scores across the following categories:
Score each item in each category out of 100 then add them all up.?Higher values should correlate to positive outcomes.?You can aggregate everyone's score if you're doing this exercise as a group, or discuss until you agree on a score.
Each category is really just a filter - feel free to replace them with your own filters if there are other considerations you'd like to make.?Some groups may prefer to judge items like cost, novelty, risk, or potential competitive advantages instead.
The purpose of this step is to critically look at how well the items line up with your priorities and identity.?Nothing here is set in stone: fudging the numbers to have a more favorable outcome won't do any good in the next step so don't play politics.
Once your analysis is complete, it's time to refine the highest scoring (or most favored) items in the wish list.
5. Refine highest rated truths into Objective statements
Choose an item from your ranked and filtered wish list, even if it's not the highest scoring item (though if it isn't, you should have a pretty good reason not to start with the highest rated one!).
Your wish list item isn't the final Objective, but it'll guide you to one. It's a two-step process: perform a 5-why analysis and then rewrite the answer as an Objective statement.
Perform a 5-Why Analysis
Interrogate your chosen idea with the question, "why" repeatedly until you're clear about the ultimate purpose of the wish list item.
The final answer to your 5-Why analysis will provide the foundation of the Objective being crafted.?For the record, you don't necessarily have to ask "why" 5 times... sometimes the sentiment becomes clear after one or two.
You'll have to decide if the direction your answers is satisfying or not... sometimes it takes a few iterations to fully map out an idea.?If you don't land on something worthwhile, go back to the previous step and check for mixed opinions around what the wish list item really means - if you can't find a way to integrate the idea into your team's identity and purpose it's not a good candidate for an OKR.
Craft a powerful Objective statement
You'll want an Objective statement that speaks to the "what" of your team's intentions.
Objectives represent WHAT is to be achieved, no more and no less.
Well designed objectives are action oriented and inspirational, and usually start with words like:
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One way to start would be to fill in the blanks of the following statement.
We will [ objective statement ] as measured by [ Key Results here ].
(you'll determine the Key Results next)
Craft your statement and make sure it answers "what" without dabbling with "why" or "how".?A few good examples of Objectives are:
Your statement should stem directly from the 5-why analysis result - the core reason you desire to complete the wish list item it came from.
6. Map out 3-5 related KPIs for each Objective
Brainstorm every potential KPI that supports the ideas behind your Objective.
Many teams create OKRs to lead or react to a set of KPIs in their work.?Identifying anything you can measure helps the Key Result creation process.?Remember, Key Results are intended to be specific, clear, and measurable... which naturally means you need metrics and KPIs.
The trick with KPIs is to consider the types of measurables that support your Objective.?In the case of automation, consider items like hand-offs, speed and standardization.?Objectives that deal with customers and accounts might use items like net growth, recurring revenue, or retention.
Some KPIs:
Only choose mission critical KPIs - the items that truly make the largest impact to your Objective!?Sometimes there are items you know are important but they aren't currently being measured (or they're tricky to measure accurately) - it's okay to choose those.
In the next step you'll create Key Results based on the KPIs chosen.?It doesn't matter if you can measure the KPI or not, just that the metrics you chose are actually important.
7. Draft Key Result statements and evaluate their viability
Every Objective needs 3-5 key results.?This is a good guide, not a hard and fast rule.?Too many Key Results makes it harder to focus.
Key Results describe HOW we get to the objective.
A strong key result is "specific, time-bound and aggressive, yet realistic".?At the end of the day you want them to be meaningful and measurable (the "measurable" requirement is fairly loose when you're starting out).
Most importantly a key result describes an outcome, not an activity, which is a super important distinction because you aren't describing the things you're going to do, but the proof that you did them.
The grammar can be confusing sometimes.?For example,
It's easy to overlook this distinction, but its implications are important.
Outcomes are the results of work and activity.?A powerful aspect of OKRs is how much freedom they give the operator to execute on them.?By declaring the result, you leave it up to the team or individual to figure out the right strategy and tactics for achieving the desired outcome instead of forcing them to work a certain way.
Autonomy in problem solving is incredibly important for culture.
Building 3-5 key results should take time.?Start with ideas around how you'd want to change the KPIs you listed in the previous step since they're usually the most critical measurement of success, then assess the strength of your Key Results with the following filters:
A. Can it be clearly measured with a number?
The best key results leave nothing to interpretation.?It's either done or it isn't.?Works best with KPIs you can measure.?However, if you don't have the ability to accurately measure something, you can use a High-Medium-Low or Red-Yellow-Green scale as an alternative.?If you're creating one of your first OKRs, it's more important to identify the right outcomes even if you can't measure them (yet).
B.?Is the key result something you will naturally accomplish?
Key results are meant to stretch you beyond the norm.?If you're identifying items that are in motion, guaranteed to happen, or low hanging fruit that can be achieved within a few days, stop immediately.?Seek to build key results that grow your team and business into an outcome that drives your objective home.
C. Did you include your original wish list item?
The wish list item that inspired the Objective is usually something worth integrating as a Key Result of some form.?After all, it provided the inspiration for the OKR in the first place and probably needs some level of consideration (or it probably wasn't a strong wish list item in the first place).
D. Does the Key Result indicate why it's important?
A key result should be self-explanatory.?If your outcome is cryptic, specific, or uses team-specific language, try re-writing it to clarify what you're actually accomplishing and why it matters to the Objective.
One of the best tests is sending the draft to a colleague or leader who isn't on your team to see if they understand what you're trying to do.?If they're confused, update your KR until it makes more sense.
Repeat steps 5 through 7 for every OKR you're planning.
8. Assign accountable partners to each item in the OKR
At a minimum, assign a single person to each Objective.?If possible, also assign one person to each Key Result too.
OKRs drive accountability, which is super valuable to culture and an imperative for getting important things done.?Being accountable to an OKR doesn't necessarily mean doing 100% of the work required to accomplish it, but it does mean that person is in charge of making sure progress is being made and raising the flag when there are problems.
The accountable staff member is also the main person anyone should talk to for questions.
If everyone is responsible for something, no one is responsible.
Make sure the assigned member understands what is needed (a well-crafted OKR should handle that) and has the authority to carry out the requirements.
9. Publish and share OKRs
Depending on the OKR cadence of your team or business, make sure your OKRs are seen by the right people as soon as you've finalized and reviewed them.?The amount of red tape and bureaucracy in your environment could make this a whole thing, but keep the faith and share anyways.
Collaboration is a mega-benefit of OKRs because sharing your goals in this way opens you up for others to know what you're working on.?At scale, this allows teams who are working towards similar objectives to talk when they normally wouldn't interact.
This type of organic collaboration only works if everyone is aware of what's going on around them, making messaging and promotion of your OKRs very important.
How to use your shiny new OKRs
Once you have OKRs, what do you do next?
There are hundreds of ways to use them, but I suggest making OKR discussions a regular part of a weekly meeting.?Have each accountability owner (assigned in step 8) speak to the progress of each item, specifically addressing:
And use these check-ins as an opportunity to broadcast progress and learning.
One of my favorite aspects of OKRs is the flexibility in how you approach the work required to finish them.?For example, if an OKR relies heavily on software development, that team may create several sprints or epics to tackle work that leads to the desired key results.
Another team may work in a completely different way, perhaps driven entirely by a task manager and a shared calendar, to get their work done.
OKRs are framework agnostic as far as the work is concerned, which makes them a powerful way to distribute expectations to goal-oriented teams no matter how they're organized.