Last updated 22 April 2022 ·
OKR stands for Objectives and Key Results, a performance management system that provides a framework for setting measurable goals and tracking progress. The key benefits of using OKRs are that they can help to:
- Clarify priorities and simplify the goal-setting process
- Help track progress and identify areas of improvement
- Cascade strategic focus throughout all levels of an organisation
- Improve employee engagement, motivation and productivity
This article aims to define the OKR meaning, offering a clear cut expert definition and many examples to aid your understanding.
Firstly, the Objective is your goal; it’s what you want to achieve. For example: run a marathon, grow your business, raise more sales, develop a product, etc.
Secondly, the Key Result is a measurable indicator that tells you if you are on track to achieve your objective or not. Usually, each Objective has up to 5 Key Results, which act as stepping stones to identify progress along the way.
OKRs provide a popular planning and management approach organisations use to drive goal achievement and employee engagement. By setting clear, challenging and measurable goals, you and your team can monitor progress and boost productivity.
John Doerr defines OKRs as “a collaborative goal-setting methodology used by teams and individuals to set challenging, ambitious goals with measurable results. OKRs are how you track progress, create alignment, and encourage engagement around measurable goals.”
OKRs, objectives and key results can sometimes be confused with KPIs, key performance indicators; however, they are different. OKRs provide a goal-setting framework used to cascade strategic priorities throughout different layers of an organisation. KPIs are more stand-alone measures of progress. OKRs and KPIs can be used together as the nature of KPIs are similar to Key Results. Find out more about how OKRs and KPIs work together to accelerate results.
OKRs will vary significantly according to the industry and level within a business. For example, the CEO level OKRs are likely to be focused on business growth, increasing profitability, team expansion etc. While these top-level OKRs form the central focus cascaded throughout all teams, the managerial level OKRs will be more granular with actionable key results they can then delegate amongst their teams.
One of the top-level business objectives could be to reach £15 million in revenue within a specific timeframe. As this objective cascades throughout the senior leadership team and then filters through to the managerial team, the marketing team could then end up with the following key results being set to ensure they make a significant impact on this desired business growth:
Improve conversion rate by 20%
Accomplish three client account pitches
Post engaging content across all social channels three times per week
Close five new projects
OKRs provide a highly structured way to break down specific targets, for example, monthly sales targets, customer acquisition targets, daily outbound call targets etc, into a more approachable list of actions to take. This helps to avoid overwhelm as the nature of OKRs involves breaking top-level strategic priorities and responsibilities down into more manageable areas of focus.
OKR examples for different teams
CEO Objective: Increase revenue by 20%
Product Development Team Objective: Increase product quality by 25%
Marketing Team Objective: Launch a new product by March
Customer Success Team Objective: Increase customer happiness by 25%
Aligned to the vision
The CEO level OKRs should align perfectly toward achieving their business vision of where they want the business to get to within the set timeframe.
Examples of top-level CEO business visions are as follows:
Becoming the number one design company in the world based on market share in international markets
Becoming an internationally recognised company and achieving the internationally recognised B Corp certification
Becoming a company with £1 billion in revenue
Becoming a company with 10,000 employees
Becoming the UK’s most innovative company in the design space
Our unique, award-winning 1-3-5® business planning methodology perfectly combines the top-level business vision with the objectives and key results cascading throughout the organisation, providing visibility and transparency, so everyone is kept informed.
Why does it work?
Setting clear objectives with a timeline and definition of success, each team member works to accomplish their goal with a sense of urgency. Our 1-3-5® methodology stipulates setting one vision, three objectives and five key results per objective, which is proven to help accelerate the speed of strategy execution and thus achieve more in a shorter period. However, if you are new to OKRs, you may want to start by implementing just a straightforward objective with 2 or 3 measurable key results for the quarter. This would be a good way to trial this goal-setting framework to see if it could benefit your business.
Actionable tips to help you succeed
- Add OKRs to your calendar.
If you have a deadline in mind for a particular goal, add it to your calendar and encourage your team members to do the same. If you’re the only one who has to do it, then put it on your calendar and treat it like a commitment. If it’s a team goal, set a reminder 2 weeks ahead of the deadline date to ensure everyone is on track.
- Review your OKRs continuously.
Every morning you should review your OKRs when deciding what work you will carry out that day. Your OKR plan will help you focus on what you should be doing to make the most significant impact.
- Reflect on your progress and celebrate success
It’s important to look at how far you have come and celebrate your wins as you go. This reflection will give you a boost and the motivation to keep going.
Check out our blog on OKRs - how to set and not forget.
To have a go at writing compelling OKRs that will cascade perfectly throughout your teams, download our free resource - The OKR Builder™, today; it contains a step by step guide, OKR examples and tips to help you succeed.