Objective and Key Results (OKR) is a goal setting framework made famous by Andrew Grove at Intel and made popular by Google. It allows you and your team to effectively set and align ambitious goals and reach them.
If you are not familiar with OKRs we have written an introduction to OKRs.
Successfully implementing OKRs into an organisation or team can be a challenge and unfortunately leads many to give up on OKRs.
That is why we have decided to share our OKR implementation plan. It is down to earth, hands on and works every time.
Why OKRs fail
OKRs are simple to understand but hard to get right. This can sometimes resume itself as a frustrating experience, which makes leaders give up on the framework altogether.
According to Peter Engelbrecht, former Intel leader, most OKRs fail because of two reasons:
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Leaders set hyper-specific goals (e.g. “introduce channels in the app”). The problem with highly specific goals is that they may lack ambition and they do not leave enough room for your team to figure out how to achieve it. Besides, when your objectives are incredibly specific it can be harder to set good key results.
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Leaders set extremely vague goals (e.g. “increase conversions”). If this happens, leaders are not providing their teams with a clear sense of direction. Thus, it may result in misalignment and more ambiguity when implementing OKRs.
3 biggest OKR challenges and how to overcome them
Leaders' troubles with the OKR framework go from knowing how to set objectives to measure key results or avoiding overcomplicating it. Let’s break down four of the most common challenges leaders report when dealing with OKRs:
Setting effective objectives
It is so easy to either set objectives to be too vague or incredibly specific. To overcome this, you should position yourself in the middle. Think that each objective should be clear, ambitious, and specific enough to bring a sense of direction.
An objective like “introduce a channel feature in the app” can come across as being extremely specific. The drawbacks of this are:
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Because it is too specific, its focus is narrow and consequently you may overlook broader strategic priorities or opportunities to grow.
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Extremely specific objectives become overly rigid. And remember that you need to have a certain level of flexibility to adjust your goals as the company or circumstances change.
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It can be harder to set key results, as they will tend to be narrower.
Likewise, an objective like “increase conversions” is also a bad choice. As it is incredibly vague, it can lead to:
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No sense of direction. The broader it is, the greater the chance of it becoming too ambiguous. And in scenarios characterised by ambiguity, it is easier for misalignment and unproductive behaviours to take place.
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A hard time trying to communicate it. When decision-making is based on highly broad objectives, it can result in misunderstandings and conflicts. Thus, becoming inefficient.
“Establish a new sales channel” is a great example of an objective. Here is why:
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It has a focus on the future, focusing on a new area of company expansion.
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It is specific enough to give a sense of direction - “new sales channel”.
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It still leaves room for the team to navigate change and set valuable key results.
Setting measurable key results
Many leaders struggle with setting key results that are measurable, specific, and achievable. Besides, some often confuse key results with KPIs.
Key results are the milestones to help you achieve a certain objective. Think of them as your roadmap to the desired outcome, as measures that allow you to clearly assess if you are on the right track.
To set measurable key results, you should write them in a way that:
Let’s look at some key results examples from Peter Engelbrecht:
- “Increase sales rate by 5%”
This represents a bad example of a key result. The main reason being that it was written as if it was a KPI. When you are setting your key results you need to remember that OKRs are used to help your company grow. In other words, they are used to help you achieve new capabilities. Hence, key results should measure something that you have not done before. And in this case, it is formulated as a KPI, something you already do.
- “Sell 19 widgets this quarter through partnerships in Germany”
This is a good example of a key result. When you break it down, you have the two key dimensions:
Thus, it gives you a new way of doing things - one that your team will learn to achieve the end goal.
Knowing how many OKRs to set and which to prioritise
Another important dimension leaders often struggle with is finding that balance between setting necessary OKRs to foster growth and avoiding overcomplicating.
Peter Engelbrecht once shared with us a rule of thumb on the number of OKR sets you should define:
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With companies under 20 employees, you should have only 1 set of OKRs.
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With companies with 100 employees, you can have 2 levels of OKRs - the company level and the level of each department/project team.
The secret with OKRs is to keep things simple.
If your company is dealing with a cut on resources, it is also necessary to know how to prioritise OKRs. One of the easiest ways to do it is by ranking OKRs. You take each set of objectives and key results and rank them based on:
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Their impact - evaluate how its complexion will impact your company. For this, you can consider many dimensions, like ROI, NPS, etc.
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Their urgency - consider the urgency or if the goals are short-term or long-term. You should prioritise goals that are time-sensitive or can lead to capitalised opportunities if acted upon now.
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Their alignment with strategic goals - ensure that OKRs actively contribute to the organisation’s mission, values, and long-term priorities.
You can use a numbered system to rank them or a colour one (e.g. red, yellow and green). Based on your ranking, you will have a clear view of which you should go forward with.
More than understanding how to set good objectives and key results, you also need to find a structure that enables you to effectively plan and learn as you progress.
Here is how we go about implementing OKRs:
Set a fixed rhythm
When implementing OKRs, one of its most powerful things is that they force you to commit to fixed deadlines.
Most internal projects fail because deadlines are allowed to be pushed over and over again. This leads to forever projects that waste a ton of time on getting the last (and probably the most) low-value things checked off.
Most organisations pick a quarterly rhythm following the business calendar but don't be afraid of having shorter or longer rhythms.
A great rhythm has the following characteristics:
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Predictable: It is short enough that you can do semi-accurate forecasting. If it is hard for you to predict quarterly results and hit them with an OK certainty then you need a shorter rhythm. Nothing drags the energy out of goals than working on unrealistic time scales or goals that have gone so far off-track that there is no way back.
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Actionable: It has to be long enough for you to do meaningful work and measure the results of that work. A monthly rhythm might be easy to forecast but too short to implement changes and measure results.
If you are in doubt then start with quarterly and tweak from there.
Set aside good time for planning
Set aside a week or two every cycle for planning.
The main reason goals don't work is that people are not given enough time to think and reflect. Many leaders think that it is when executing the plans that you make progress but most of the hard work is in identifying the best goals and how to best get there. You can run as fast as you want but if you don't follow the best strategy you will waste a ton of energy. Work smart, not hard.
Here is our suggestion for scheduling a good planning period (we assume a quarterly rhythm using the first 2 weeks for planning):
Planning Day 1: Reflection
Start out by reflecting on the last cycle's results. For each goal, the goal-owner should go through the following with their manager:
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Did we make it? Simple yes/no
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Was it too easy or too hard? Was the goal realistic or did you get it wrong? You don't want to set easily reachable goals. The point of OKRs is that it should be ambitious enough that you only have around a 80% success rate. If it is below, then maybe lower expectations for this cycle and if it is higher, then turn up your ambitions.
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What specifically did we do successfully? The most important thing when evaluating is being super clear about what worked. Those learnings are what you need to use again and double down on in the future. Being clear about your strengths and actively re-using them is how you compound your results. Many ambitious people tend to skip this too quickly (cause we all know what worked) but it is key that you as a leader double down on these learnings (and it is a great situation to praise).
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What did we fail at? If you try out new things, you will fail at some. Failure is not in itself bad - but being scared of talking about it and thus learning from it just to repeat the mistake again is really bad. If you are uncomfortable giving negative feedback this step in the OKRs really gives you a great way to provide it. Take your learnings and apply them for the next cycle.
The important thing on this day is not whether we hit our goals - it is learning from them and taking those learnings with us into the rest of the planning period.
The learning should be summed up at the end of the day by each leader and shared with their team and shared upwards. This way all the best learning goes all the way to the top of the company as a feedback loop.
Planning Day 2-4: Set high level goals
Based on the learnings from the last goal cycle your senior management team should set the next cycle's high level goal.
Again give yourself good time to discuss what good goals are and have a realistic idea of how they should be accomplished.
This does not need to take all day for 3 days but if the top management team meets daily to discuss and then have a day to think things over or check in with their team it creates much more thoughtful goals.
On the last day, the next cycle's high-level objectives and key results should be decided and with a top level executive personally responsible for each one. This should then be shared with the entire organisation.
Planning Day 5-10: Break goals down to bite-sized actionable to-dos
Once the top objectives and key results have been set, it is time for the individual departments and teams to figure out how they can best contribute to OKRs implementation.
Since each key result is owned by top level executives, they will take that to their teams and recursively decide upon the OKRs and actionable tasks they need to get done to achieve that key result.
This is then done recursively by leaders in the organisation down to the individual contributor level. At the individual contributor level, it is important that you have a mix of both key results but also actionable tasks that bring concrete change tied to those key results. Otherwise, you don't have a plan of how to get there.
Execute and follow through
After the planning phase, everyone now has a clear idea of what they need to do in order for the entire company to achieve their goals.
The only job for leaders from here on is to support their teams in actually getting things done. As a leader you should at least weekly check in on your team members progress and help where needed.
An important thing to note here is that you should not interrupt them or have a weekly status meeting if this is not needed. Systems like Workjoy are designed for you to know exactly where your team is without interrupting.
Make OKRs easy to work with
Typically this is where OKRs implementation fails. They live in separate systems far from the individual contributors' daily lives.
This next section is super biased but one of the reasons we built Workjoy is exactly because we were tired of this exact problem.
If you want to succeed with any goal setting you need to use a system that:
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Your employees use every day. Otherwise, they will forget your OKRs in the day-to-day work schedule. This leads to fatigue in the organisation and a feeling that OKRs are "just not working for us" but the fact is just that you have failed to make it easy. So no spreadsheets and no external systems will work.
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Is combined with the actual tasks. A classical mistake is using a system just for goals that doesn't also function as your day-to-day task manager. This detaches your OKRs from the actual work and hinders progress.
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Is designed for the individual contributor. Most goal systems are built for managers and reporting - not for actually making progress. No wonder leaders find it hard to implement when the system is cumbersome for employees to use.
OKR success is all about constantly having them top of mind and easy to work with.
Summary
OKRs are an effective tool for aligning an organisation but they need to be integrated into the day-to-day activities to work.
To do this you must:
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Work in a fixed rhythm so goal setting and execution are predictable for employees even if your goals change.
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Spend way more time planning than you think you need. This is where you actually do your job as a leader.
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Help your team execute on their OKRs by getting things out of their way and implement a system that makes OKRs easy to work with for them.