What are OKRs? and how to use OKRs in your work and personal life to be productive and reach goals?

Let’s start with the bottom line — if it works for Google, Intel, Netflix, The Gates Foundation, Bono’s “One” initiative, and countless other companies — it’s a good tool to have in your arsenal.

As you know about me, I manage a software development group, and I have many targets which I would like to reach with these highly talented people.

The problem that I was having is that I was either spending too much time focusing a team or a virtual team of people on the targets at hand, or I was not too involved in the task and as a result, they got to a completely different outcome (or not close enough) to where I wanted it to be.

This was very frustrating, not productive, and time-wasting…

So I hit the online bookshelf and found one of the most inspiring — practical — books I have ever read that got me to a much better management system, a system in which I set goals and targets and easily track how they are advancing. And more importantly, it forces you to stay focused on what really matters to you and your organization.

Not surprisingly — this book is called “Measure What Matters” by John Doerr. Trust me — it will change your life.

What do OKRs stand for? and What is the OKRs framework?

OKRs stands for “Objectives and Key Results”.

It’s a framework to define Objectives for your organization and create actionable, measurable steps that are needed to be taken in order to reach these objectives.

It’s a framework for creating focus and “disciplined execution” in an organization.

Because the OKR framework requires you to select 3–5 OKRs it also forces you to focus on what really matters to you and your company.

OKRs started at Intel in the 1970s by Andy Grove, their CEO at the time. Intel was transitioning from a memory storage maker company to a CPU development and manufacturing company.

And Andy Grove, needed a system to align the entire company to a set of goals to get their focus and commitment in a time when the company’s future was still in the fog.

John Doerr, who was close to Andy, took that system and perfected it, and most importantly, exposed it to the world so that many other companies will be able to use it.

Besides Intel and Google who are most known for using it there are many other huge companies that employ it daily, and successfully, like: Netflix, Spotify, Uber, Twitter, Airbnb, and more.

See this excellent intro video on OKRs by the author of the book.

What do “Objectives” mean in OKRs?

Objectives are “Where you want to go” and “What you want to do”.

An Objective is a goal you want to achieve.

The objectives are derived from a problem you need to solve, so first, you need to find your “Problem Statement”, which is an issue or something preventing growth, change, or the desired outcome.

You select 3–5 objectives that matter to you and your organization the most, this list of objectives is what you will focus on and achieve.

Objectives can be “short term” targets — like a quarter, or they can be a “long term” target that can span more than a year (do not set it too far into the future).

Objectives need to be:

• Significant
• Concrete
• Action Oriented
• Inspirational.

When designing an Objective — Ask: “So What?” to understand why you even want to reach that goal, or solve that problem.

What does “Key Result” mean in OKRs?

Key results are the quantitative targets used to measure the success of the objective.

• Key results are outcomes — not tasks.
• You select 3–5 key results per each one of your objectives and focus on reaching them.
• Key results should be “short term” results, usually 90-days targets (or quarter in business terms).
• Key results have a very clear “Yes” or “No” end criteria that cannot be misinterpreted.
• KRs have a clear quantitative measure that can be tracked along the way — if it’s only something you understand in hindsight then it’s not a good KR.
• KRs are tracked on a pre-determined and short cadence to make sure it’s reaching the required end goal. If you see that you are not reaching, or not making enough progress to your goal — then it’s time to shift resources/time/capital to focus on that KR in order to reach it.
• KRs have a clear dealing date (either at the end of the quarter or a specific milestone during the way).
• By definition — Completing all the Key results related to an Objective will complete and reach that Objective.

KRs should be S.M.A.R.T:

• Specific
• Measurable
• Action-Oriented
• Realistic
• Time-bound

Read more about S.M.A.R.T goals here ->

Who should have an OKR?

It’s mistakenly thought that only high-level management sets OKRs to itself and by publishing them they let the entire company know what is the target.

But that is not the point for OKRs — OKRs should exist at every level of the organization, from the CEO and board of directors of the company down to the single developer that has just started their role in the company.

Obviously, they will not have the same OKRs at all levels, and each person creates OKRs for themselves or to their organization, but they do not create them from scratch, each person/organization's OKRs should be derived from their manager’s OKRs, either by using the same objective or by taking a KR and making it your own Objective.

Having said that, in a healthy, high-performing organization that is fluent in OKRs, it’s advised that about half of the OKRs you have will be derived from management, and the other half will be created by yourself, emerge from your subordinates, or influenced by your peers. same thing for your employees.

Just make sure that these OKRs still serve the overall OKRs of your manager and the organization and are not sending you in the wrong direction.

So OKRs should be:

• Top-Down — to align organizational priorities.
• Bottom-Up — to gain expertise from those who are closest to the actual work.
• Sideways — to leverage inputs from stakeholders and partners.

A perfect example of that is Google’s 20% rule, which means that employees have 20%, an equivalent of a full day, to work on something creative that they want which corresponds with the company vision — which brought you for example Gmail.

You probably know that writing down a goal raises the chances of your reaching it. The same can be said for tracking your goals as you pursue them.

In fact, a California study showed that friends who both wrote down their goals and shared their progress with friends on a weekly basis were 43 percent more likely to achieve their objectives. The same goes for organizational OKRs.

How to write an OKR?

The practical steps are:

1. Identify a “Problem Statement”.
2. Turn the “Problem Statement” to an objective.
3. Write the Key Results.
4. Set the tactics.

Tactics are the practical steps required to reach a key result. it’s the actual tasks that need to be completed to reach that outcome.

OKR Template

OKRs are set in a very simple yet very flexible and powerful template:

I will [objective] as measured by [key result].

If you follow this template of a sentence the wording will pop up the goal and the means to measure it.

[OBJ] The Objective

[KR1] Outcome 1

[KR2] Outcome 2

[KR3] Outcome 3

[KR4] Outcome 4

[KR5] Outcome 5

What are the types of OKRs? or How to measure success in OKRs?

The point of OKRs is to also cause your organization to stretch and reach heights they did not reach before.

2 Types of OKRs:

1. Committed OKRs — Objectives and Key Results which you must complete with a 100% success ratio. These are the bread and butter of the business that you cannot drop. For instance, in the software world, these can be specific release milestones, specific customer engagements, and so on.
2. Stretch Goal OKRs — Implementing stretch goals allows organizations to truly excel. Stretch goals are OKRs that are a daunting challenge to OKR contributors. Research backs up the effectiveness of stretch goals, with studies showing that stretched employees exhibit higher levels of motivation, productivity, and engagement. The success criteria for these goals is meeting 70% of the targeted KRs — where even 70% is something great.

Whereas committed objectives usually have to do with day-to-day metrics such as sales or hiring employees, stretch objectives are all about bigger-picture ideas.

How to Manage OKRs?

OKRs need to be managed and tracked in order to reach their targets.

If you see that you are not reaching your KR, or not making enough progress to your goal — then it’s time to shift resources/time/capital to focus on that KR in order to reach it.

1. Set a clear cadence of tracking OKRs. Either with your employees or for a general review.
2. Establish a single source of truth for tracking OKRs. There needs to be specific metrics that cannot be interpreted in different directions. The recommended thing is to have one place where the OKR metrics are presented and all are aligned to track it there.
3. Set Predetermined milestones to reach in your OKRs execution.
4. Trust your leaders — The point of OKRs is not to micro-manage people more, the other way around, it’s meant to give people much more room to grow and lead by telling them what is important on one hand, and telling them what are the results that you want to see in order to reach that target. All the rest is up to them to find the tactics required to reach that KR.

Continues Feedback and OKRs

As part of having a constant cadence tracking of OKRs your role as a manager is to provide constant feedback to your employee in order to help him reach his OKRs.

If you are only looking at your employees’ OKRs to yell or recognize their progress then you are not doing your job.

You need to provide constant feedback to your employee, coach them, and push them in the right direction continuously — so they advance in the right direction.

Why should OKRs be transparent?

One important aspect of OKRs is that they must be transparent to everyone in your organization.

And that is for 2 reasons :

One, Research shows that being transparent with goals increases motivation. In a survey of 1,000 Americans, respondents indicated that they would be far more motivated to reach their goals if their fellow workers could view their progress.

The Second is that having transparent OKRs allows for a better-coordinated organization. I can see what my peers are working on and what is important to them and more importantly we can identify and work towards dependencies so that if someone else needs our help in reaching their OKRs we can either prioritize it to assist them or make them aware that this is not currently in my OKRs so they should not count on it in theirs.

How to Grade OKRs?

Objectives are measured by KRs, the KRs have a very measurable result as their main criteria.

So grading a KR is a very simple process.

Usually, each KR has a 0–10 result (or you can use 0–100).

The result calculates the percentage of the complete KR.

So a KR that was fully completed can have a score of 10.

If it was partially completed by 70% can get a 7.

What are the benefits of OKRs? or Why do OKRs work?

OKRs have 4 major benefits — or superpowers:

1. Focus and commitment to priorities The organization rallies behind a small set of defined activities which will drive the organization forward to its targets. The organization is focused and committed to the same things.
2. Alignment and connected teamwork Because the OKRs are shared and transparent organizations know better what to request and what to expect from other organizations. They also know what will not happen and what not to count on.
3. Tracked for Accountability OKRs are Data-driven and cannot be misinterpreted. They are tracked on a constant basis, and flags will rise when things are not advancing correctly to the right place.
4. Stretched for Amazing OKRs motivate us to do more and to reach places that we did not think were possible.

The common pitfalls of OKRs? or Why do OKRs fail?

OKRs will fail or succeed mostly on how you define them — but also based on cultural values.

1. Sandbagging — This basically means that when you connect your OKRs directly to people’s compensation it’s not in the people’s best interest to set high and challenging goals. See this section on how to do it correctly.
2. Business as usual — Do not put things that are the normal routine. OKRs should contain either things which are a usual part of the work but require extra effort to reach in time or quality or aspirational targets to propel the organization forward.
3. Treating them as KPIs See this section.

How are OKRs related to compensation?

The worst mistake Intel has made with OKRs is connecting them directly to compensation which is something that you should not do.

Basically, it was without any manager discretion — the result that you got was linked directly to your raise and stocks at the end of the year.

The result was that the new system called “MBO” (Manage by objectives) caused employees to put very low bars on the “key results” and sandbag the process since it correlated directly to their salary — lower targets meant higher raises.

OKRs are related to compensation but indirectly, they are filtered through the manager’s discretion. If your manager sees that you have did not reach all your targets, you reached 60%, but the targets were extremely hard to reach and reflect a huge impact — then your compensation should be in direct relation to the immense impact you caused.

On the other hand, if you far exceeded all your targets but made no impact and your targets were really easy — then you should not be highly compensated for sandbagging this.

OKRs vs KPIs

KPIs (Key Performance Indicators) are means to measure the health of something, you must stand in all the KPIs to be a healthy organization or product.

OKRs are measures of a change they measure the change that the organization is doing towards its goals. OKRs can also reach 70% of the target and still create a significant impact and change in the organization and to be considered as a major success, while 70% in KPI means that something is really not working well.

How often do OKRs change?

As the general rule of thumb, we had set above, the target is to have your Objectives set to at least a year ahead, and the KRs set to be completed on a quarterly basis (90-days, 3 months…). But that is a rule of thumb — it will not match all businesses and companies.

Find the cadence that matches your style and business. If you want to set your objectives on a quarterly basis too and KRs on a monthly — go ahead, just don’t let it become a constant hassle that will reduce motivation and increase the busy work.

If you want to set your Objectives to 3 years and KRs to 6 months — go ahead, just make sure it keeps you stay on course and doesn’t become something you rarely track.

OKRs Planning

OKRs creation and ratification is a process that takes time. A lot of time in the beginning to organizations that are new to the process…

So give it the time that it requires to define and form the objectives, to set the OKRs for these objectives and then to allow the lower level organizations cut their meaning off it, and lastly for you to give feedback on presented OKRs and for you to get feedback from you subordinate organization on yours.

A normal timeline would be:

• Allow a couple of months at the end end of the year to form objectives (Nov-Dec).
• Allow 1 week at the end of the quarter to review past OKRs.
• Allow 2 weeks at the end of the quarter to form new KRs for the next quarter.

As a side note — Organizations usually take between 3–4 Quarters to perfect the process for them and learn how to time and how to form OKRs — and use them to their benefit.

How to use OKRs for achieving personal goals in your personal life?

There is no major difference between this process in your company, startup, team, or small business than doing it in your home for you and your family or your personal life.

The process is exactly the same:

1. Find and identify the problems that your find as the most important issues that are stopping you from reaching your goal.
2. Set these problem statements as your objectives.
3. Write down Key Results that are S.M.A.R.T, which by completing them the objective will be completed. Constantly track and reach an improvement with these KRs.
4. Set the Tactics to address these Key results — i.e. a set of steps to do in order to reach the outcome which is a Key Result.

OKRs Examples

OKRs vary greatly between each industry, organization, and company and since they rely on the problem statement they are guaranteed to differ between different organizations even in the same company.

OKRs for software engineers example

Problem Statement: Low quality in code reviews

OBJ: Reach high quality in code review and catch most of the bugs in that process

KR1: 50% performance increase in our Code Review infra by WW9.

KR2: 45% increase in comments per patch by end of the quarter.

KR3: 60% Reduction in bugs identified when fixed as “could have been found by CR”.

OKRs for HR recruiters

Problem Statement: Not getting enough resumes

OBJ: Have a constant stream of 100 new candidates each month

KR1: 100% increase in LinkedIn potential candidate calls by WW6.

KR2: Switching to a new headhunting company that has a rating of at least 3.5 by WW10.

KR3: 30% increase in Friend — brings a — friend program.

OKRs for Freelancers

Problem Statement: Not getting online requests due to no online presence.

OBJ: Launch website for freelance consulting.

KR1: Finding a domain name and a hosting service by June 10.

KR2: Publishing 10 posts by Dec 20.

KR3: Running a marketing campaign on Facebook for 300$ by Dec 31.

OKRs for getting into shape

Problem Statement: Out of shape, heavy breathing just by walking to the store.

OBJ: Run 10K in May.

KR1: Reduce Mcdonald’s to 2 times a week by Feb 1.

KR2: Run 3 times a week starting Feb 10th.

KR3: 10% increase in the distance every 2 weeks by May 1st.

OKRs for Personal Life

Problem Statement: Spending too much at the supermarket.

OBJ: Stop buying unneeded things at the supermarket

KR1: 90% of supermarket shopping will be done online.

KR2: 50% reduction in throwing expired food.

KR3: 20% reduction in the Supermarket budget.

OKRs for Football Teams

Problem Statement: Spending too much at the supermarket.

OBJ: Stop buying unneeded things at the supermarket

KR1: 90% of supermarket shopping will be done online.

KR2: 50% reduction in throwing expired food.

KR3: 20% reduction in the Supermarket budget.

OKRs for Sales and Sales Managers

Problem Statement: Current pipelines are not expected to grow in the future.

OBJ: Open a new booking pipeline.

KR1: 9 demos done to possible companies by end of Q.

KR2: 100% increase in ad views through Facebook Ads.

KR3: 30% increase in ad space in the paper.

OKRs for Product Managers

Problem Statement: Feature deliveries do not match customer expectations.

OBJ: Have an agile delivery process of new features that will make our customers delighted.

KR1: 50% Reduction in bugs per feature.

KR2: Development team sprint capacity increased by 30%

KR3: Customers’ response time for commitment reduction to 10 days.

In Conclusion

OKRs are an excellent management tool that can benefit all the people in the organization.

It creates an excellent north star for the organization to work in accordance with.

It aligns different people and organizations to work together in a much more efficient way.

It motivates and stretches people to reach goals they see far on the horizon.

And for you, allows you to set expectations with the people you manage, leave room for them to push on their own, and in return leave you more time to handle what is important.

So in order to become more productive — you need to start measuring what matters.

I highly recommend that if you found the notes in this section interesting and relevant and you think that digging deeper in them will help you become more productive at work or when working from home, read this book:

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Now go get Productivated :-)

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