OKRs for All: Making Objectives and Key Results Work for your Entire Organization

PART I

OKR Foundations

In this first part of the book, I will cover the basics of OKRs, including core concepts and structure so that you have a good understanding of the OKR framework.

My personal OKR for this book is:

Objective (Goal): Provide the best practical guide to OKRs relevant to every person in an organization.

I will measure the success of this objective using the following key results.

1: Enable OKR adoption for 1M teams.

2: Earn 4.9 rating for usefulness on Amazon.

3: Make 100% of OKR rollouts successful.

I will reach the above outcomes by doing the following key initiatives:

1: Sign with a reputable publisher.

2: Write a practical manuscript.

3: Earn endorsements from other OKR experts.

This framework may seem unfamiliar to you now, but it won't by the end of the next chapter on Core Concepts, where I will walk you through the OKR fundamentals in detail. Let's dive in.

CHAPTER 1

Core Concepts: What Are OKRs?

In this chapter, I will provide a breakdown of what OKRs are, and how successful businesses use them to address the challenges of visibility and alignment, the need to drive results faster, and improve employee engagement.

What Do OKRs Do?

OKR is a proven goal‐setting framework for creating alignment and focus and building a highly productive and engaged work culture to drive your business outcomes.

OKRs align your entire organization to strategy, shifting focus from output—the everyday work of your team—to outcomes, which are the impact of that work. This mindset shift keeps your team highly engaged with a clear sense of purpose and understanding of how everyone is contributing to forward momentum.

OKRs sit at the intersection between purpose and strategy and execution.

Your mission is the light at the top of your lighthouse, guiding everything you do, closely tied to your values and culture. These make up your organization's purpose.

For instance, if you are a gaming company, your mission (why your business exists) might be To educate every child using games. Your vision (picture of the future) might be To make every game an educational game. Your values and culture would reflect this by favoring values like Educate at every touchpoint and Learn every day.

Your strategic priorities, objectives, and key results make up the strategic direction for your organization—they are the outcomes that your organization is hoping to achieve. Your strategic priorities are your go‐forward strategy, and your objectives and key results are the connective tissue how you drive the organization to realize your strategic priorities.

Let's go back to our gaming company example, and let's say you are working on a new game. At the company level, your objective isn't to release a new game—it might be to make money for your shareholders. As a business, you may also (and should) have objectives around social impact and doing good in the world, but for the sake of simplicity, let's stick to the revenue objective for now. The projects and key initiatives your engineering team are working on to complete the new game are your output.

Your organization's output is obviously necessary and usually visible, because most employees spend their time in this execution‐level work. But the projects and key initiatives itself isn't the desired outcome. It's what you're doing to get to your revenue outcome. This seemingly simple shift in thinking from outputs to outcomes unlocks huge value for an organization.

By pointing your entire team toward outcomes, you enable everyone in the organization to focus on business outcomes instead of projects and activity, empower them to prioritize, and figure out the best ways to get those outcomes. This book gives you an operating manual for getting started with OKRs, the connective tissue between the strategic priorities and everyday work of your team.

OKR Basics: Objectives, Key Results, and Key Initiatives

You can think about objectives, key results, and key initiatives in the following way:

The formula for writing an OKR is:

An objective is directional. Whether at the company, department, or team level, an objective is where you are headed—your target.

Key results are measurable outcomes that signal that you are moving in the right direction toward your objectives.

Key initiatives are the actions your team takes to move key results in the right direction.

Objective: Goals You Want to Accomplish in a Set Period of Time

Choose three to five objectives at the most. This helps you bring focus to your team at every level, from the company‐wide OKRs that your leadership puts together to the individual OKRs that your team members put together. Having to pare down all the things you want to accomplish to a list of three to five objectives helps avoid goals from turning into task lists. If you prioritize everything, you prioritize nothing.

Keep in mind here that you want a mix of objectives that you know you can achieve and ones that you know will be a stretch for you and your organization. This helps create the environment of innovation and creative thinking that OKRs are known for facilitating.

Seek simplicity. Each objective should be clear and concise. This ensures that, as OKRs are made visible throughout your organization, everyone—not just leadership—is able to understand what you are trying to achieve.

Ask yourself: What do you want your organization to accomplish?

Key Results: Expected Outcomes of the Objective

Be specific. Results should be clear, measurable, and not open to subjective interpretation. Use specific numbers and metrics. Binary outcomes, like something got done or not, are not the best—but can be used.

Choose three to five key results for each objective. Too many key results can lead to a lack of focus. OKRs are about providing a spotlight on the most important outcomes, not a floodlight on every outcome. To focus your key results, ask yourself, "Which metrics will really show me that I have achieved what I set out to achieve?"

Ask yourself: Does each key result have a clear owner who is accountable for its success? Who do other stakeholders go to when this key result is behind?

Key Initiatives and Projects: These are activities that will be done to achieve the key results.

Stay realistically optimistic. Make sure you have the ability (the resources and timeline) to execute the projects and key initiatives under your OKRs. That's what makes an objective realistically optimistic, and not a pipe dream.

Ask yourself: What could get in the way of our projects and key initiatives?

Key initiatives are often delegated, and when they are delegated, they can become the objectives or projects of someone else. This ensures alignment between company‐wide OKRs and the work prioritized by every department in your organization. More on this in Part II.

How Objectives, Key Results, and Key Initiatives Fit Together

To explain how objectives, key results, and key initiatives interact with one another, I'm going to use an example.

Let's return to our video game company, and let's say your aspirations are to take over the North American video gaming market. Your objective look like this:

Objective: Become the best gaming platform in North America.

But what does best mean? It is first important to clarify what it means to become the best gaming platform in North America, as that could mean different things for different people in the organization. Is becoming the best gaming platform in North America defined by revenue, popularity, users, or something entirely different? You need to be able to objectively measure your outcomes so there is a common, clear understanding across the organization of what you are aiming for, not just what you are doing to get there.

So we add in key results, which explain what best actually looks like in terms of results.

Objective: Become the best gaming platform in North America.

Key Result: Achieve 150 million monthly active users.

Key Result: Exceed 90% user retention.

But how will this gaming platform get to the key results that represent success?

This is where we layer in key initiatives, which are the how we get to our key results.

Here is the same OKR written with key initiatives in the picture:

Objective: Become the best gaming platform in North America.

Key Result: Achieve 150 million monthly active users.

Key Result: Exceed 90% user retention.

Key Initiative: Ship new version of gaming platform by 6/1 to improve engagement.

Key Initiative: Increase reach of our gaming platform by 10 million new users.

These key initiatives are the work the company needs to do in order to maximize the chance of achieving these key results, and, ultimately, objective. In many cases, these key initiatives need to be tracked and monitored just as closely as the key results.

Your key initiatives and projects are the executional outputs delivered by your team to reach an objective, whereas key results are outcomes that help you measure your progress toward that objective.

Key initiatives and projects are how you get there, but in differentiated ways.

Key initiatives begin at the company level, beneath objectives and key results. Key initiatives can become objectives for the next level down, the department level. Then the department level's key initiatives become the objectives at the team level. More on this structure, including a visualization, in the next section.

Projects operate at the team and individual level. They are the execution‐level, tactical work that needs to get done to achieve all the objectives that come before them.

By bringing key results, key initiatives, and projects together with objectives at the company, department, and team levels, everyone in your organization should have clarity on where they are headed and how they are going to get there.

How OKRs Flow Through an Organization

The ideal state is to have OKRs flow from the business level to departments, teams, and all the way to individuals to enable and align each level to the business priorities.

This might not happen right away—I'll walk you through my phased approach later—but it's where you're headed.

Let's return to the example of our video game company.

Our executive team has come up with a company‐wide objective, to become the best gaming platform in North America, which they accomplish via two key results: achieving 150 million monthly active users and exceeding 90% user retention.

They also included two key initiatives, which are how they intend to get to their key results and, ultimately, objective.

Objective: Become the best gaming platform in North America.

Key Result: Achieve 150 million monthly active users.

Key Initiative: Increase reach of our gaming platform by 10 million new users.

Key Result: Exceed 90% user retention.

Key Initiative: Ship next version of gaming platform to improve engagement.

But the executive team isn't performing key initiatives on their own. These get delegated out to departments so that the company‐wide key initiative of Ship next version of gaming platform to improve engagement becomes the product department's objective, with the company‐wide key result of exceeding 90% user retention attached to it, and the company‐wide key initiative of increasing reach of our gaming platform becoming the marketing department's objective, with the company‐wide key result of achieving 150 million monthly active users attached to it.

Each of these departments builds their own key results and new key initiatives to get them to their department‐level objective.

I don't want there to be a misunderstanding about the term delegating here: OKR creation is a collaborative process in which neither company‐wide nor department‐wide nor team‐level nor individual‐level OKRs should be written in isolation or without a dialogue that goes both ways.

From the moment that company‐wide OKRs are drafted by your company's top leader, OKRs should facilitate a two‐way conversation between leaders and those who report to them about what their objectives and key results should be. This should be a process that exists at every level of your organization. And each department and team should have leeway to choose the how they get to where they're headed—their key initiatives. This collaborative approach is the key to OKRs for all.

Company Objective:

Become the best gaming platform in North America.

Key Results:

Achieve 150 million monthly active users.

Exceed 90% user retention.

Key Initiatives:

Ship next version of gaming platform to improve engagement [delegated to Product].

Increase reach of our gaming platform [delegated to Marketing].

Marketing Objective:

Increase reach of our gaming platform.

Key Results:

Achieve 150 million monthly active users.

Cost of acquiring new users is less than $100/user.

Key Initiatives:

Release Super Bowl commercial.

Invest in expansion in three major