Good vs Bad OKRs

How to set Great OKRs?

Your ultimate guide to writing great OKRs and properly setting them
in your business! Inside, find real examples of the dos and don’ts of
creating OKRs so you can prioritize your business strategy and
outcomes.
 TABLE OF CONTENTS
1 Introduction

2 Part One: Getting to Know OKRs

A Brief History of OKRs

What Exactly are OKRs?

Who can use OKRs?

5 Key Elements of OKRs

5 Reasons Why You Should Use OKRs

OKRs are not KPIs

3 Part Two: Creating your OKRs

Characteristics of Good Objectives

Characteristics of Good Key Results

4 Steps for Creating and Implementing OKRs

Guidelines for Creating Your First OKRs : An OKR Checklist

4 Part Three: Tips and Tricks to Creating OKRs

Examples of OKRs

7 Mistakes to Avoid When Setting OKRs

5 Part Four: Tracking Your OKR Implementation

How do you Measure OKR success?

How to use a Software/Tool to Create and Measure OKRs

6 Conclusion
A Brief History of OKRs

Even though most startups and organizations have heard about OKRs, they are
a relatively new organizational and management concept.

The concept of OKRs was first introduced by Andy Grove, former CEO of Intel,
who is often considered the father of management science.

Andy Grove joined Intel as their third employee and later climbed to the ranks
of CEO. He took inspiration from Peter Drucker, who conceptualized the MBO
or "Management by Objectives" back in the 1950s. MBO is a management
method focused on results and the overall picture instead of individual targets.

Andy Grove Profit.co

Conceptualized OKRs The most intuitive OKR software

(Objectives & Key Results) available today

Industry Leaders:
Peter Drucker
Google, Intuit,
Developed MBOs Amazon, Square &
(Management by Objectives) others use OKRs

Grove's OKR was a breath of fresh air in a time where people had grand ideas
but had an unclear path to making them come true. Aside from churning these
grand ideas into a clearer path to reality, the OKR system also fostered an
environment where the importance is placed on the execution of work and
aligning the results of this work to the company's overall goal.
Introduction

We live in an increasingly complex, interconnected, and dynamic world. While

this globalized world’s developments have allowed individuals and businesses
to achieve beyond their potential, it also demands people and firms to keep up
to succeed.

Thus, in this era, focusing on one goal will not give you the edge over your
competition and is often not the road to success. Individuals and businesses
must evolve and learn how to juggle ideas, organize thoughts and handle
multiple goals simultaneously.

Looking at successful companies such as Youtube, Google, Intel, and The Gates
Foundation, one of the secrets behind their success is their efficient system to
organizing their targets. They all use a framework called OKRs.

This e-book aims to discuss the system or management framework called

“OKR”., Thriving firms and organizations are using OKRs to manage multiple
goals and targets at the same time.

Among other things, this e-book will discuss an overview of the OKR
framework, its importance, an explanation of what it is, and how to use it. You
will also learn tips on good and bad OKRs with specific examples and
illustrations. Finally, you will also learn how to create OKRs and apply them in
your business.
Getting to
Know OKRs
Andy Grove’s system helps companies with more complicated components
such as tech and organizations with new, innovative, and pioneering goals.
Intel encountered several large competitors like Motorola as they pivoted from
being a memory vendor to a microprocessor vendor. The company had to
battle against larger rivals in a highly competitive market.

OKRs provided an excellent framework for Andy Grove to communicate his

goals to the teams across the world. Teams agreed on stretch targets and
executed them with great focus and alignment.

Andy Grove reviewed progress every week, and early feedback helped teams
on quick course corrections. The results were spectacular. Intel beat every
other competitor to become the world’s leading CPU vendor and, along with
Microsoft, has been dominating the IT industry through the Wintel duopoly.

During Grove's time at Intel, its revenue soared from $1.9 billion to $26 billion
and became increasingly attractive to other companies. One of Grove's hires
and employees, John Doerr, became a great believer in OKRs.

John Doerr moved on from Intel and became a prominent Venture Capitalist
with his investments and mentorship to companies like Google, Intuit,
Amazon, Square, Uber, and Zynga.

In 1999 he introduced OKRs to Google when they were just 60 employees.

Google has publicly credited OKRs for their phenomenal success. From Google,
OKRs spread like wildfire across companies in Silicon Valley and beyond.
Today, OKR is being used extensively across different countries and industries
and has been improved for many other purposes.
What Exactly Are OKRs?

OKRs are simple yet powerful as they are useful for startups and large
corporations to execute their strategy with focus and alignment.

OKRs stands for "Objectives and Key Results".

As its name represents, OKR is a framework that breaks down a company,

organization, or individual's goal into clear objectives and attainable results.
These two vital parts are what make this system so effective

Often, goal-setting for a business consists of an overarching target for

everyone to work towards one and drivers why the company or organization
should achieve the goal.

OKRs flip this process around.

Instead of focusing on big goal, the OKR framework breaks this goal into an
overall objective with corresponding concrete and measurable items (Key
Results) to reach this Objective.

Objectives are qualitative with inspirational, and time-bound goals to be

executed by a company, team, or individual. The most common time-frame
used by companies for OKRs is quarterly.

Objectives define what you want to achieve in a set timeframe. These are the
goals that everyone should be aware of, and everyone should work on. These
objectives are actionable statements that align with the company’s mission
and vision. They set the standard and tone by which business is done.
In determining the objectives for OKRs, it is advisable to look back to the
company’s mission and vision. Y can look at it this way: the company’s
objective is the destination and the vehicle to get to the destination is the
OKR.

Here are a few examples of Objectives:

● Build a high-performance Sales team.

● Increase ARR from $1,000,000 to $2,500,000.
● Launch news "OKR for dummies" course.

Key Results (KR) quantify the Objectives and break them down to specific
metrics that can be used to measure the Objectives' achievement. If the
objective is the company’s destination, then Key Results are

the main paths you cross to reach the goal. Key Results measure the
progress of the company in achieving its goals. These serve as milestones that
would bring you closer to the goals. Key Results should be clear, concise,
specific, and easily measurable.

Here are a few examples of Key Results:

● Hire a new Vice President of Sales.

● Finalize and introduce the new pricing model.
● Hire Videographer for news course creation.

Usually, a company sets 3 to 5 Objectives per quarter. Or sometimes, a

department sets 3 to 5 Department Objectives per quarter. Each of these
Objectives usually has 3 to 5 corresponding Key Results. Let's illustrate with
an example Objective.
Objective: "Build a fully high-performance Sales team" for Q2 2021.
This particular Objective will then include 3 Key Results to help track and
achieve this Objective.

Build a fully high-performance Sales team" for Q2

2021
21%

Finalize and allocate budget for the sales

team 9%
0.09
0% 100%

Create and approve a detailed Sales team

compensation plan
22%
0.22
0% 100%

Hire a seasoned Vice President of Sales

31%
0.31
0% 100%
The 5 Key Elements of OKR

John Doerr evangelized OKRs across Silicon Valley. He believed that it must
include five key elements for the OKR framework to be effective. Companies
and teams that implement OKRs need to ensure that these five elements or
pillars are not ignored during implementation and adoption:

Focus
Exceptional focus

Align
Better alignment because of transparency

Commitment
Achieve uncommon degree commitment

Tracking
Tracks progress through the course

Stretching
Stretching OKRs within the org and across BU's in an org
Focus
Companies today, both large and small, grapple with a universal problem, i.e.,
wanting to accomplish a lot with limited time and resources. The problem is not
the lack of goal-setting. Most companies and teams have ambitious goals that
they want to accomplish this quarter or this year. However, the biggest mistake
is trying to do too much too fast in too little time. Then at the end of the quarter,
the teams are often met with the disappointment that they didn’t accomplish
everything.

OKRs helps with this universal problem. Companies set a few important goals.
Then, they pull all the teams and resources together in that direction. OKRs
help companies stay focused on the most-pressing projects or initiatives that
will have the maximum impact.

Hence, companies should define not more than 3 to 5 Objectives and less than 3
to 5 Key Results per Objective. In doing so, companies and teams can focus only
on the most critical targets rather than diluting their efforts all over the place.

OKRs typically are set towards the end of a quarter or year. Occasionally, they
are set at the beginning of a new quarter or year.
Alignment
Another challenge that companies face is a disconnect between the company’s
overall vision and the day-to-day operations of a set department. For instance,
a CEO might have clear guidelines from the Board on what he/she wants to be
accomplished for that year or term. However, the individual departments are
busy working on tasks/projects that do not align with the CEO’s vision.

For a company to effectively hit its targets, there must be alignment from the
top (C-suite) to the individual contributors (employees). A system like OKR
clarifies the company's goals, teams & individuals will be more aware of how
their daily actions will help with the collective goal. If all departments are
aligned to the overall company goal or OKR, then there is a higher probability
the company will be more successful in attaining its goals.
Commitment
Here’s another common scenario -- at the annual town-hall or Sales
kick-off meetings, the CEO discusses his/her compelling vision for that year. It is
often met with cheers, enthusiasm, and support from all Department leaders
and even employees. However, as days and weeks pass, people forget the vision
or Big Hairy Audacious Goal (BHAG) -- snow, they’re focused on their daily task
management.

OKRs helps solve this accountability and commitment problem. Once the
leadership decides on the Objectives -- they require appropriate Key Results,
which can only be achieved with each team’s and employee’s contributions.

Once the OKRs are set up at the company, department, team, and individual
levels, it creates a commitment and accountability culture. Because of the
system's transparency, everyone is aware of what they are working towards and
how their actions add to the overall objective.
Tracking
Peter Drucker is often credited for his famous management quote,
“What gets measured, gets improved”. Companies are not new to the concept of
measurement and tracking. Almost every company has some type of
measurement in place. Publicly traded companies need to report their results
quarterly. Startups have to report their performance dashboards to their
investors and the Board. Sales teams use CRMs to track their performance.
Likewise, Marketing teams use Marketing Automation Platforms to track
performance and ROI.

However, most of the measurements are on lag indicators, i.e., results. Too
often, the lead indicators, i.e., the activities, are hardly tracked or measured.
Also, most of the reporting discussed above are for day-to-day or quarterly
performance. They do not usually involve ambitious projects or goals.

The OKR system ensures proactive tracking, reporting, and course correction
to help the teams reach the set Objectives. Even though the Objectives are set
quarterly, the actions/tasks are measured and tracked every week. At the
beginning of the period, teams agree on the Key Results that must be met
every week and then decide to track them. Tracking helps everyone be aware
of the scoreboard and facilitates members helping those who need assistance
in completing their commitments by sharing resources and expertise as
require.
Stretching
Another common problem is that companies set too many achievable
goals using the SMART framework. SMART stands for Specific, Measurable,
Attainable, Relevant, and Time-bound goals. Achieving these goals does
provide a sense of relief and accomplishment for everyone involved; however,
it doesn’t help the company make giant leaps. Let’s take the example of
YouTube’s Objective of “Reaching 1 Billion hours of watch time”. This Objective
is different from a traditional company goal of 20% annualized growth. By
setting such a goal, the YouTube team realized they could make the platform a
ubiquitous and integral part of users’ daily or weekly habits.

If they had set the usual 20%-growth goal, YouTube still might be relevant
today, but may not be as ubiquitous and omnipresent. Does this mean every
company or team should set goals such as YouTube? Not necessarily. There is
nothing wrong with setting SMART Goals. But it’s also essential to set goals that
stretch the limits of what the company or team thinks is possible in that time
frame.
OKRs should help the company and team elevate their performance beyond
what they thought "was possible." If the Objectives are easily attainable, then it
shows that the company is not stretching enough. If the Objectives are too
ambitious, they will discourage morale. The goals are ambitious, and a 70%
achievement is generally considered as "strong performance."
Who Can Use OKRs?

People in leadership or managerial positions are in the best position to

formulate and use OKRs to achieve goals efficiently. OKRs attribute the team’s
performance to Key Results, thereby enabling managers to make precise
operation changes to achieve their Objectives. For example, the CEO and the
C-suite decide that one of the Objectives is to acquire 1 Million new trial users.
It will then assist the various departments -- Engineering, Marketing, Product,
Customer Support -- to develop the corresponding Key Results to help the
company achieve this Objective.

Famous companies such as Google, LinkedIn, Amazon, Microsoft, Netflix, The

Gates Foundation, and Spotify are all known users of the OKR method.

But while high-level managers in large companies generally use OKRs to

streamline their operations, OKRs can usually be used by anyone who manages
a team and aims to keep everyone’s efforts moving in the right direction and get
things done.
Hence, OKRs are also popularly used in startups, small businesses, non-profits,
and even in the Public sector.
5 Reasons Why You Should Use OKRs

OKR adoption continues to increase over the last two decades. The trend
continues in the 2020s to grow as we head into a post-pandemic world and a
world of business and economic uncertainty. It is evident by the sheer number
of tools, consultants, and resources available in the industry on OKRs.

Here are five of the common reasons why companies today use OKRs.

Increase in Efficiency

Clarity on the Overall

Picture

Boosts Employee Morale

Ease of Collaboration

Enhanced Productivity
1. Increase in Efficiency

Often, people get lost in their jobs when they become overwhelmed by a large
volume of tasks. If the workload is heavy, the natural tendency is to finish all
the tasks without understanding if the work being done contributes to the
overarching goal. OKR increases efficiency by allowing people to realign and
prioritize their efforts proportionate to a goal. It streamlines their work,
thereby increasing overall efficiency.

2. Clarity on the Overall Picture

The two-part system of having high-level Objectives and actionable Key Results
allows people to zoom in and zoom out of every project.

Sometimes, being hyper-focused on individual tasks blurs everything out of

sight, including the main goal as to why the task should be done in the first
place. On the other hand, when you have a big goal, people tend to be excited
about achieving that goal without knowing the nitty-gritty of getting to that
destination.

Since the OKR system defines both, team members can see the overall picture
at any time of the project on time and keep everyone on track.

3. Boosts Employee Morale

Assigning one specific task to a department or an individual may be efficient,

but it can also cause burnout for the team, especially if they see their task as
an endless cycle.

With the OKR system, work can be viewed as an upward spiral instead of a
cycle. Team members are given a chance to see how their task contributes to
the organization's overall progress to achieve its goal. They become aware of
their task, thereby giving them a sense of purpose and a renewed drive in their
work.
4. Ease of Collaboration

Since everyone is aware of the company’s overarching Objective and the Key
Results needed to achieve the goal, team members become aware of each
individual's development and progress. This kind of awareness breeds natural
collaboration and cooperation among team players.

Even though everyone has a different part to play, having a common goal
opens doors to ideas on helping each other out.

5. Enhanced Productivity
The number of hours spent just trying to prioritize and make sense of work is a
concern for any team. So being organized is a sought-after quality for a good
reason. Trying to remember if you forgot something takes up a good chunk of
thinking space and mental load and wastes your time every day, causing you to
work that much harder.

OKR is not only an inspirational goal-setting and goal-management system; it is

also a high-level organizational tool that puts everyone's concerted effort on
one board and sorts them under the proper goal. It allows the entire company
to be a well-oiled machine. It will enable staff and team members to spend
time only on things that matter.
OKRs are not KPIs

Teams commonly use Key Performance Indicators (KPIs) to ensure they are
making progress on what's important.

However, KPIs and OKRs are not the same. While both are used in goal-setting
activities, OKRs and KPIs differ at great lengths. KPIs are measurable metrics
that are usually used to monitor progress under a specific task or goal. KPIs
vary depending on which industry you are operating in.

For example, hospitals and healthcare centers' usual KPIs include average
patient waiting time and average treatment time. On the other hand, KPIs for
the hotel and tourism industry include revenue per available room and
occupancy rate.

Here are a few more examples of commonly used KPIs:

● EBITDA
● Operational Cash flow
● Net Profit Margin
● The number of qualified leads
● Cost per lead by channel
● Shopping cart abandonment rate
● Average order value
● Return on Investment (ROI)
● Retention rate

As you can see, these are not unique to a specific company or team. They are
universally known, accepted, and used. Since these indicators are measurable,
setting goals around KPIs, usually involve numerical targets.
OKRs, on the other hand, are actionable statements that form an
entire system of objectives broken down into specific, actionable goals.
Not all aspects of the OKR system are quantifiable or measurable. OKR starts
with an ambitious goal or target for the company that is usually inspirational.
Then, this is broken down into small quantifiable milestones. KPIs focus on
goal-setting quantitative aspect, while OKRs balance the process's both
quantitative and qualitative aspects.

It's not uncommon for companies to use both KPIs and OKRs. To summarize,
KPIs are lag indicators of performance, while OKRs set and achieve meaningful
company goals.

Objectives and Key OKR Key Performance

Results Indicators KPI

Unbiased Measurements
Qualitative Objectives

Quantitative Key Results Metric-based Targets

Time-bound Goals Indicate Progress Over Time

Actionable Targets Direct Strategy

Execute Strategy
Creating
your OKRs
The Characteristics of Good Objectives

Good Objectives must be three things: motivational, forward-looking, and

time-bound.

Before determining your Objective, here are some questions to ask:

● Is the Objective aligned with the goals of the company/organization?

● Will the company want to work toward this Objective?
● Is it ambitious enough to push the team a little harder?
● Will it advance the company or organization overall?
● Does the Objective serve to guide the team, or would it make things more
confusing?

While Objectives must be ambitious, motivational, and with a given time-frame,

it is crucial that they should also be realistic. Leaders should balance the
formulation of Objectives to push the team and be attainable for everyone.
The Characteristics of Good Key Results

Key Results should be three things: measurable, specific, and actionable.

These serve as metrics for progress towards achieving the organization’s
chosen Objectives. Key Results must be translated numerically; thus, it is easy
to track progress and evaluate. Being specific in setting Key Results also saves
time and effort for the team.

Good Key Results organize, direct and orchestrate the entire team’s efforts
towards a specific Objective.

Before setting up KRs, ask the following questions:

Does the Key Result lead to Is this possible, considering

achieving your Objective? budgetary matters?

Is this Key Result the most efficient

way toward achieving your Is this possible with the current
Objective, or is there a staff capacity?
more appropriate one?

Do you have a system in place

Does it complement the
to periodically track and
capabilities of the company?
measure the Key Results

When making Key Results, it is advisable to choose 3 to 5 for each Objective.

Having too many KRs will push the team to do too many things and usually
result in mediocre work and sloppy execution. On the other hand, having too
few KRs would limit your scope and water down the working Objective.

Overall, good OKRs have Key Results aligned with the Objective. Achieving the
proper equilibrium between aspirational Objectives and achievable KRs make
for a good OKR. It ensures that the whole system is cohesive, which, in turn,
motivates the entire team to work together effectively.
4 Steps for Creating and Implementing OKRs

Now that you have a high-level understanding of OKRs let's review how to set
up and implement OKRs properly. Here's a simple 5-step framework that will
guide you through the process:

1. Prepare

2. Brainstorm

3. Designate

4. Align and Track

1. Prepare

One of the most overlooked yet most important phases in

creating OKRs is the preparation phase. Setting new OKRs
requires preparation even before sitting down and listing
Objectives and Key Results one by one.

One of the most important things to prepare for is researching what the company or
organization needs, what it has learned from past experiences, accomplishments,
and challenges. It is usually up to the company or team leadership to research and
reflect on past reports, documents, and references to better grasp strategic
long-term goals. Planning requires time and preparation, so it is essential to
dedicate time before the actual formation of OKRs.

2. Brainstorm

Once the research phase is done and the foundation for the
company's needs and long-term goals are set and grasped,
leaders can set up a designated time and place for formulating
their OKRs. It is essential to get the right people involved in
setting up your team and your company's goals.
Know who are the relevant players in the planning process and what
insight they can bring to the table. It is essential to invite various people from
different backgrounds to get a holistic perspective on everyone’s goals.

If you are handling various departments, also make sure that each department
is well-represented in the meeting. It will ensure that your OKRs will be realistic
and inclusive for all. Also, allot ample time before the meeting so participants
can prepare their ideas and proposals for the goal-setting activity.

On the day of the meeting, create an environment that is open to discussion

and propositions. Allow everyone to speak and listen. The first step is
determining how many Objectives you need for a given time frame. For
example, you can decide that you need three main Objectives for the next
three months. Once you have decided on that, draft the actual Objectives.
Keep in mind the characteristics of Objectives as earlier discussed, such as
aspirational, realistic, and grounded in the company's overall goals.
For inspiration, here are some examples of real Objectives set by well-known
companies:

● YouTube — "Reach 1 billion hours of watch time per day (by 2016)"
● Google — "We should make the web as fast as flipping through a magazine."
● MyFitnessPal — "Help more people around the world."
● The Gates Foundation — "Global eradication of Malaria by 2040".

It is also important to know the company's capacity and the staff's

competencies in creating an objective. Objectives must be ambitious to push
the team to their potential and be grounded in reality to be achievable.

Once you have a working Objective, you can move on to craft Key Results. Just
as with Objectives, KRs should also possess all the good characteristics such as
being measurable, specific, achievable, and aligned with the Objective.
You can also refer to valuable sources such as earlier company
reports, annual reports, previous company performance metrics, staff
performance and capacities, and other existing indicators in the brainstorming
step. These past reports are vital so that you can have a baseline on where to
start. It can also help you determine the team's strengths, weaknesses,
capacities, and areas of improvement.
Aside from internal capacities, an important point of discussion for OKRs is
external factors. You can keep your OKRs in check by asking questions such as:

● Is this possible given the current situation of the company?

● Are these aligned with the overall direction of the company 3 to 5 years
from now?
● Are there other unaccounted external threats that could make achieving
these KRs impossible?
● Is it wise to pursue these Objectives, especially considering other
competitors' track records, or should you focus your energies elsewhere?

Another thing to consider is your time frame. Companies usually set standard
time frames such as monthly, quarterly, semi-annually, or annually. Setting
time frames is vital to creating accountability for the staff.

Setting a time frame also sets the scope of operations. It helps determine if the
budgetary requirements are sufficient, if it is possible to scale up operations or
if the company should divert more sources to a different part of operations.

3. Designate

After establishing your OKR on paper or your company's

chosen OKR software, it is time to delegate the work to
achieve your goals.
In designating tasks for the team, emphasize that each Objective is
a common goal for everyone. It will be more efficient and motivating for the
team to designate each individual or team to a specific Key Result, rather than
having one Objective per individual or team.
For example, you have three Objectives for the next quarter, and each of those
Objectives has four KRs. Instead of assigning one entire OKR set to one team
and have them do everything on that particular goal, scatter the KRs to various
teams or individuals. This way, the whole team can create a collaborative
environment that is conducive to motivation and progress.

In this stage, it is also important to know your team's strengths, weaknesses,

capabilities, and limits to efficiently designate each key result to the right group
of people.

4. Align and Track

Once everything is in place -- Objectives and Key Results are determined, and
tasks are designated -- everything is expected to roll out naturally.

You can do this by conducting constant monitoring and opening your lines of
communication to your team. It would be best if you kept the OKR progress
board open to the public for transparency and team motivation.

To align and track your team's progress, you can either

conduct periodic group meetings to check progress or
one-on-one sessions for updates. There is no template for a
monitoring process, and it boils down to what works for
your team.

Whatever mechanism you use, make sure that it delivers the goal of
capturing your team's progress, knowing how they feel about the goals, and
ensuring that the staff has not lost sight of what they should be doing and
what they should work toward.
Guidelines for Creating Your First OKRs -- An
OKR Checklist
Are you OKR-ready?

You now have an understanding of OKRs, their significance, and how to

implement them. But, before you are ready to embark on this journey, you
have to cask yourself-- are you OKR-ready? Is your company or team ready
team ready to roll out its first OKR for this quarter or year? Here are a few
questions to ensure you are ready before your first OKR rollout:

Is it Ambitious?

We've covered the differences between SMART Goals and OKRs. We've also
covered the differences between KPIs and OKRs. It's not uncommon for
companies/teams to set attainable goals that they can accomplish. If the goal is
not ambitious and will not stretch your team -- then it's time to reconsider the
goal.

Do You Have Leadership Buy-In?

One of the essential elements of OKRs is alignment. That means your

leadership team must be involved in defining and setting up the Objectives. If
they are not convinced of the merits of the OKR methodology, and if they view
it as just another management principle -- then your chances of success are
slim to none. It's vital to get support and buy-in from leadership.

Have You Communicated to the Entire Team?

As mentioned earlier, OKRs help everyone in the team and company stay
focused on what's important. It helps provide clarity of purpose to employees.
They realize that their daily actions will connect to the larger company
purpose. However, you can only accomplish this if there is clear
communication between leaders and employees. Both company leadership
and department heads must take time to discuss the merits of OKRs, and why
everyone needs to get on board.

Do You Have a System to Track and Measure?

You can only accomplish the chosen Objectives if there are relevant and
corresponding Key Results, which will be tracked periodically.

You need to ensure that you have a system to measure and track these Key
Results and contribute to the Objective's progress. We cover more in detail
about how to track your OKR progress in an upcoming section. Once you know
that you are ready to implement OKRs at your company, the next step is to
correctly set up Objectives and Key Results.

A Checklist for Creating The Right Objectives

To further check and confirm that you are choosing the right Objectives, you
can use this ABC-OKR checklist:

● A — Are these Objectives Appropriate?

● B — Are these Objectives Balanced?
● C — Are these Objectives Cohesive?

Here are a few questions that you can ask yourself and your team:

A — Are these Objectives Appropriate?

● Is this the right time for focusing on these Objectives?

● Are these Objectives appropriate to the overarching goal of the
company?
● Are these Objectives suitable with the current budget of the company?
 ● Are these Objectives right fit with the already existing goals of the
company?
● Are these Objectives appropriate with the work culture and ethics of the
company

B — Are the Objectives Balanced?e

● Are the number of Objectives balanced with the timeframe allotted?

● Is this Objective balanced with other tasks/projects already existing in
the company?
● Are we setting the right number of Objectives to focus on
during this timeframe?
● Are the Objectives over-focused on one certain metric/KPI?
● Are the Objectives over-focused on one particular department?

C — Are the Objectives Cohesive?

● Are the Objectives cohesive with the bigger plan of the company?
● Are the Objectives cohesive with the team's values?
● Is there a company-wide understanding of these Objectives?
● Do employees understand why these Objectives are important?
● Do the team members understand the potential impact of achieving
these Objectives?
● Will there be company-wide alignment on the chosen Objectives?
Tips and
Tricks For
Creating
Effective
OKRs
Examples of Good and Bad OKRs

Good OKRs provide a clear picture of where the company is going in a set
timeframe and how it will get there. On the other hand, bad OKRs don’t do a
lot to improve a company’s efficiency. Often, team players with OKRs that are
not correctly implemented become stuck in a loop of unrealistic expectations
and sluggish performance.

Here are some examples of good and bad OKRs:

Example #1: Revenue-focused OKR
The Wrong Way to Set Revenue-focused OKRs:

To increase revenue

36%

Launch A New Product

15%

15%
0% 100%

Market the New Product

25%

25%
0% 100%

Get customers for the New Product

70%

70%
0% 100%

This OKR is vague from beginning to end. For its Objective, to merely state that
your goal is to increase is not motivational and not time-bound. It does not
spark actionable progress among staff members. The same is valid with its Key
Results. They are not specific with what they want to convey, nor are they
timebound. This set of KRs will likely cause more confusion to the team than
motivation, as it does not give clear instructions. When an OKR is not clear
enough, it can cause frustration among team members and decrease overall
productivity and morale.
The Right Way to Set Revenue-focused OKRs:

Increase revenue by 35% next quarter

21%

Increase revenue from $100K to $300K

$133.04

17%
$100 $300

Increase individual sales quotas by $25000

$4129.84

17%
$0 $25K

Increase marketing budget by 10% for this quarter

3%

30%
0% 10%
Example #2: OKR for Launching New Website

The Wrong Way to Set OKRs for New Websites

Promote new website

30%

Launch website
25%
25%
0% 100%

Increase site traffic from 20k to 45k

23.84k
15%
20k 45K

Create good content quarter

50%
50%
0% 100%

This OKR is not recommended because the Objective is non-specific, and its
KRs are not measurable. While these are reasonable goals and strategies,
they are mere ideas that aren't actionable and helpful. When it comes to
goal-setting for a team -- ideas aren't worth anything if you can't translate
them into actions. OKRs are meant to convey ideas more quickly to the entire
team without wasting time figuring out the goal.
The Right Way to Set OKRs for New Websites:

Generate an increase in organic search traffic by the end

of Q2
28%

Increase digital advertising spending by 20% in

the next three months
15%

15%
0% 20%

Complete an SEO audit of existing content

20%

20%
0% 100%

Create guest posts on ten new websites

50%

50%
0% 100%
Example #3: Customer Service OKRs
The Wrong Way to Set Customer Service OKR:

Enhance customer experience

21%

Hire more people

15%

15%
100%
0%

Ask customers what they want

25%
25%
100%
0%

Cut waiting lines

15%
15%
0% 100%

Ask staff to be more jovial and professional

30%
30%
0% 100%

Once again, this is a vague OKR. Yes, customer experience is important. But
OKRs must be straightforward and easy to understand.Customer experience
can mean many things, which can lead to confusion among staff and
managers.

Vague OKRs like this are usually the result of unclear alignment to the
company's goal. To avoid this, make sure to include details and specifics about
what you want to achieve. Please provide a description and time frame to
ensure that they are realistic.
The Right Way to Set Customer Service OKRs:

Improve Net Promoter Score (NPS) score

38%

Allot 30% of personnel to customer

service frontlines by the end of the year.
20%
20%
0% 100%

Gather 30 feedback forms from

customer in the next three months.
13%
40%
0 30

Reduce product friction on the back-end

to improve customer usage.
3
55%
5 1
Example #4: Company Growth OKRs

The Wrong Way to Set Company Growth OKRs

Grow the company

20%

Build more branches

30%

30%
0% 100%

Hire more people

15%
15%
0% 100%

Earn new customers

15%
15%
0% 100%

It is an example of an OKR that is too general for the team. Remember that the
goal of the OKR is to give everyone an idea of the specific steps needed to reach
an achievable goal.

Growing the company may mean different things for everyone; thus,
it will reflect various efforts being made by teams and individuals. Varying
interpretations of Objectives and Key Results will scatter the direction of workload
and not lead to an efficient action towards the goal.
The Right Way to Set Company Growth OKRs

Expand the company's reach and network by 25%

in the next three months
32%

Hire fifteen new employees in the next

quarter, five per new branch established
40%
40%
0% 100%

Establish one new branch per month

1
10%
0 2

Hire a VP of Facilities Management

48%
48%
0% 100%
Example#5: Example of Marketing OKR

The Wrong Way to Set Marketing OKRs

Objective: Boxing Day Marketing.

Key Result 1: Take advantage of the holiday.

Key Result 2: Sell more during the holiday.

Boxing Day Marketing.

21%

Take advantage of the holiday.

2
20%
0 10

Sell more during the holiday.

20%
20%
0% 100%

OKRs are not themes or schemes for the company. They are specific,
actionable plans that consist of a clear mandate and definite milestones to
achieve that mandate. When planning for a seasonal campaign or project, it is
easy to get carried away or hyper-focused on the theme and forget to build
pathways to achieve your goal within that theme. If a company wants to take
advantage of Boxing Day to boost sales, it is essential to take that idea further
to create your OKR. Define what you want to happen and build the steps
specific to that goal.
The Right Way to Set Marketing OKRs

Launch a month-long Black Friday Promotional

Program
21%

Find ten companies to cross- promote or

collaborate to boost Black Friday efforts.
2
20%
0 10

Increase site traffic from 20k to 45k

20%
20%
0% 100%

Create good content quarter

25%
25%
0% 100%
7 Mistakes to Avoid When Setting OKRs

Before you are ready to roll out your first OKRs, here are a few things to keep in
mind. Here are some common mistakes that teams new to OKR usually make.

1. Too many OKRs:

Learn how to prioritize and be concise in OKRs. They are not just targets you
want to achieve but actionable strategies that show you how to move forward.
However, setting up too many OKRs on your first go might confuse your team on
which Objectives to focus on and where to prioritize their efforts. We
recommend not more than 3 OKRs on your first attempt.

2. Setting Overly Challenging OKRs:

As discussed in earlier sections, one must maintain balance when coming up with
OKRs that are inspiring and challenging at the same time.
For example, if your team has grown the business by 20% year-over-year, setting
up an Objective to increase revenues by 100% next year might spook your team
members. It will discourage them right off the bat. If you do set up challenging
OKRs, then make sure you set the right time frame. For example, The Gates
Foundation set up a goal in the 2000s to eradicate Malaria by 2040. Since they
have the research, connections with health organizations & governments -- the
team set up a time frame that's stretchable but attainable.

3. Vague Key Results:

KRs must be simple, clear, actionable, and measurable. They should be easy to
measure, track, and report on. And all the team members involved must be able
to tie back to their daily or weekly tasks. Please note that Key Results are not
tasks, but they could include a series of tasks
4. Disjointed Key Results and Objectives:

Having misaligned Key Results and Objectives should be avoided at all costs
because it would negatively impact your company.

5. Not Measuring Properly:

This is the number one thing you should avoid when making KR and KPIs. Their
sole purpose for existence is to measure progress. Not being able to gauge if
you met your target or not is inefficient. It could cause confusion, which makes
operations difficult and makes planning an arduous task..

6. Not doing periodic Check-ins:

Most employees have a series of tasks in their day-to-day roles. If they are not
informed continuously or reminded of the OKRs and the impact of their
activities on the overall Objectives -- it is easy to lose momentum. Conduct
periodic check-ins to discuss and measure your OKR journey.

7. Not Documenting Learnings:

Through your quarter, you will come across various lessons both internally and
externally. Companies often make the mistake of not documenting the lessons
learned or waiting until it's too late. Consistently documenting and sharing
learning will help the team stay on track and make course corrections when
necessary.
Tracking
Your OKR
Progress
How Measure OKR Success?

As with any system or strategy, gauging the system's effectiveness is important

to ensure its efficiency. After the intensive process of creating OKRs the right
way, measuring their success, is the least of your worries.

It is why much time is spent on ensuring that the Key Results are measurable,
specific, and time-bound. Since each KR is measurable, they can quickly tell
whether your team is going in the right direction or progressing parallel to the
time set for finishing the milestone. Meanwhile, you can gauge the overall
progress of your OKR by checking if each KR is being fulfilled. You can do this
manually by setting a bar that fills up to 100% under your Objective.

Next, Divide 100% with the number of KRs you have assigned for the Objective.
Say you have four KRs, divide 100 by four, and you get 25. It means that for
every Key Result accomplished; you fulfill 25% of your overall goal to achieve
the Objective. While programs are not always perfect, a good gauge is to score
at least 70% towards your Objective. It means that your Objective is ambitious
enough for the team and leaves room for future improvement.
Manually gauging the success of the OKR is simple and very doable but
may not always be accurate. You can start with a simple spreadsheet
(Excel or Google Sheet). In some cases, you can easily measure your
Key Results in your CRM or Marketing Automation. In the beginning, use the
tools at your disposal until your team is comfortable and confident with OKRs.

Difficult for
C-Levels to
visualize impact

Difficult for
Difficult to managers to Difficult to track
enforce good model, visualize and report
OKR structure and manage progress
alignment

Difficult for
individuals to
visualize
contribution

As you progress through multiple quarters, it is advisable to use various

software and tools to measure the team's performance as it happens. Keeping
an accurate and transparent system for everyone to see -- creates a motivating
environment for the team to function as one in achieving a common goal.
How to use a Software/Tool to Create and
Measure OKRs

Thankfully, due to the popularity of OKRs, there is a myriad of software and

tools to choose from. The OKR tool or software you choose should be simple
to use across all departments and teams and easy to collaborate on

How easy and

How easy is it to set up
straightforward is it to
the OKR software?
collaborate across various
teams?

How easy is it to set up Does the OKR software

and update Objectives integrate with my existing
and Key Results? operational platforms?

What is the learning Can I easily create

curve required? reports and dashboards?

Can I communicate the

What do the onboarding
status of the Key Results
and training look like?
within the OKR software?

How can I incorporate Is the OKR software

periodic Check-ins? cost-effective?

What are the reviews from existing customers who

have used the OKR software?
OKR software usually allows you to manage several OKRs in one interface for
the entire organization. Set up your OKR by indicating your Objectives and
setting the timeline of that Objective. Then, put in each Key Result needed to
achieve your result.

The software will have a readily available percentage tracker to adjust to the
progress your team is creating. Each Key Result will have its tracker. Every
adjustment made to each tracker will reflect on how much you are progressing
towards your overall Objective.

Having a tool or software that tracks your OKR is not only useful for accurately
measuring your progress. It also helps you and your team visualize the work
you have already done and the work that still needs pushing. Visualizing
progress creates an environment of motivation and drive for the team, thereby
increasing overall productivity towards the goal.

Our Final Thoughts:

Setting up OKRs is not just done on a whim or “just to see if it works”. OKRs
should not be trial experiments. They require dedication and much effort,
requires tons of data gathering and preparation, and several people with
technical and managerial expertise.

However, despite the difficulty in creating the system, you will reap exponential
rewards. The benefits of using OKR have been seen through the success of
several start-up companies that turned out to be today’s tech giants. If you are
looking to improve the company, want more organization in your work life, and
want to make operations more streamlined and efficient, you cannot go wrong
with OKR.
Conclusion
In this eBook, we introduced you to the concept of OKRs. We broke down the
two distinct parts and also the various elements that make successful OKRs.
You also reviewed some examples of bad and good OKRs. Finally, we also
discussed how you could choose the right OKR software for maximum
effectiveness.

With this information and knowledge, you are now ready to embark on your
OKR journey. Our team at Profit. co wishes you success in your OKR
implementation. Feel free to reach out to our team should you have any
specific questions.

Remember:

➔ OKRs are about breaking down a goal into an overall objective with
corresponding concrete and measurable items.
➔ To implement OKRs: prepare by researching the needs of the company,
brainstorm your most important goals with your top people, designate
OKRs to different team members, and align and track these goals in
your organization.
➔ Use the ABC checklist:
◆ 1. Are these Objectives Appropriate?
◆ 2. Are these Objectives Balanced?
◆ 3. Are these Objectives Cohesive?
➔ Invest in the right software for you and your organization.

If you’d like a software that helps guide you through your OKR program and
grows with your business, look no further than Profit.co!

Try it for Free Schedule Demo