How should I formulate my Objectives and Key Results? What are well-working OKR examples? How do “quality goals” look like? What are indicators of quality of good OKRs?
Many firms implementing or working with OKRs struggle with questions like these or similar ones. Since OKRs are always very specific to an organisation and its context, many OKR examples do not really help – there is no one-size-fits all solution. What exists though, are indicators of quality of effective OKRs. Therefore we from Workpath created and overview of the most important do´s and dont´s for formulating good Objectives and Key Results.
If you still need “just some starting point” after this list, we summarized a few OKR examples for different professional groups and leadership positions in this article.
What are good OKRs?
OKRs are neither the same as S.M.A.R.T goals nor the same as KPIs. They are composed of Objectives that describe inspiring, ambitious and qualitative goals and Key Results that represent measurable results that clearly indicate if a certain measurable result has been achieved. For each Objective you usually have a set of 2-5 Key Results. So, your Objectives should for all stakeholders clarify, where you are going. The respective Key Results should make clear how you want to make success on the way to your goal achievement measurable. It is important to keep in mind that OKRs do not predetermine an approach how you have to achieve your Objectives and Key Result. Hence, OKRs allow a common understanding of all stakeholders of what has to be done without restricting the autonomy or creativity of employees to find own solutions to a task or issue.
Recommendations and guidelines for effective Objectives
What value has been created at the end of the quarter? This question should lead good Objectives. Because they should describe a motivating and inspiring state in the future, that gives everybody a clear idea of where to go.
One approach, which helps to formulate inspiring Objectives is storytelling. A story that in the best case has been created in collaboration with the other stakeholders and which describes the aspired situation is oftentimes a great motivator and helps to make OKRs more lively and concrete.
While doing so, Objectives should be not only comprehensible for colleagues at the same but also other hierarchy levels. All stakeholder should have a clear picture of the actual value contribution for the organization and its customers in mind. This value contribution should be specific and not always the same, evergreen goal with timeless values like customer happiness. Since Objectives describe a qualitative value contribution you also should not put metrics in their formulation. Concrete descriptions of Objectives however are indispensable: the ambition to “improve” or “optimize” is good. That should be reflected in the formulation of the Objectives in a more specific manner though. In conclusion the following do´s and dont´s can be used for the review of your Objectives:
Do´s: Indicators of quality of purposeful Objectives
- Qualitative (not measurable)
- Describing a desirable state or condition in the future
- Focused: maximum 5 Objectives per organizational unit
- Inspiring, ambitious, but achievable
- Realizable in one cycle (quarter)
- Superordinate and closed packages
- Derived from strategy, long term goals, and team needs
- Focus on customer and business value
Dont´s: Signs of inferior Objectives
- Contain metrics like revenue
- Describe timeless values like customer happiness
- Abstract terms of improvement like “increase”, “optimize” oder “improve”
Recommendations and guidelines for effective Key Results
Good Key Results are the success driver of their Objectives. The question that should guide the formulation of Key Results is therefore: What results drive the probability of achieving the Objective? For one Objective you should usually create 2-5 Key Results.
Key Results, in contrast to Objectives, should always be measurable. They should contain metrics that describe the expected values you want to realize. Here it is important to differentiate that Key Results have the character of lead and not lag goals. That means, Key Results measure directly manipulable lead metrics that lead to the achievement of certain results. Lag goals on the other hand determine the pursued results of a process and match the concept of KPIs. Many OKR examples ignore this: Key Results are formulated as to-do lists you are supposed to work through instead of reflecting the actual lead metrics. Moreover, it is important that Key Results are as independent from each other as possible. A mistake in or failure to achieve one Key Result should impair the success of another Key Result as little as possible. Following this logic, one should avoid to formulate Key Results as milestones that build up on each other.
Next to this, each Key Result should have an owner. Meaning, a person that feels responsible for this particular Key Result. From this you can derive the following do´s and dont´s for Key Results:
Do´s: Indicators of quality of good Key Results
- Quantitative (measurable)
- Drive the success and the achievement of the Objectives
- Maximal 5 Key Results per Objective
- Specific (no vague words like “implemented”)
- Accepted by stakeholders
- Ambitious yet realizable
- Avoid interconnectedness or dependence with other Key Results of the Objectives
- Lead metrics that you can influence
Dont´s: Signs of inferior Key Results
- Formulation as milestones
- Catenation: more than one metric in a Key Result
- Too many binary Key Results (achieved/not achieved)
So, why to work with indicators of quality for OKRs?
The above mentioned checklists help to find the right focus when formulating OKRs, so you eventually end up with real “quality goals”. Unlike with OKR examples you can use those indicators of quality, from marketing to finance, for any kind of OKR, any industry and any organization size. Surely they won´t answer all questions and you always have to keep in mind the unique characteristics of each organization. Those best practices have proven useful though to define relevant, manipulable and motivating lead values with adequate scope. This usually is the first step towards more employee engagement, commitment and an increased firm performance.