Objectives & Key Results

OKR is an abbreviation for Objective & Key Result. OKRs are meant to set strategy and goals over a specified amount of time for both organization and even individual teams. At the end of a regular period, your OKRs provide a means to evaluate how well you did in executing your objectives.

Spending a concerted effort in identifying your organizations strategy and laying it out in a clear and undertandable way with OKRs can truly help your employees see how their efforts are contributing to the big picture and how they fit in with other teams.

Objectives

Any initiative has an objective. The goal of setting an objective is to write out what you hope to accomplish such that at a later time you can easily tell if you have reached, or have a clear path to reaching, that objective. Choosing the right objectives is one of the hardest things to do and requires a great deal of thinking and an open mind to do well.

In short, KPI's are all about focusing your resources on and moving everyone in the same direction. They help ensure that every effort is tied to a goal and every action supports "moving the needle"in the right direction for the organization.

Key Results

Assuming your Objectives are well thought through, Key Results are the secret sauce to using OKRs. Key Results are numerically-based expressions of success or progress towards an Objective. Expectations that are numerically defined produce results that can be quantitatively measured and scored.

The important element here is measuring success. It’s not good enough to make broad statements about improvement (that are subjectively evaluated). We need to know how well we are succeeding. Qualitative goals tend to under-represent our capabilities because the solution tends to be the lowest common denominator.

OKRs, KPI's, and Metrics ... Oh My!

OKRs provide the missing link between ambition and reality. They help you break out of the status quo and take you into new, often unknown, territory. If you have a big dream — an inspiring Ultimate Goal — for your orgamization, you need OKRs that take you there.

A KPI, on the other hand, measures the success, the output, quantity, or quality of an ongoing process or activity. They measure processes or activities already in place.

Very often, a KPI that needs improvement will be a starting point for creating an OKR, and it will become a Key Result of an Objective. Accordingly, an OKR vs. KPI comparison is a bit like comparing a fruit salad with an orange, they both contain fruit, but one is a combination that contains the other. Because of their complementary scope, OKRs and KPIs are natural companions.

ExampleL A support KPI below target becomes a Key Result

Let’s say you want to measure the success of your Support team. You could create a KPI that measures the average reply time for incoming support tickets. If you agree with Support that the average reply time should be 30 minutes or less, you’ll be able to instantly see (on a KPI dashboard like Geckoboard) whether your target is met.

As long as that is the case, you’re all good. But what if the KPI indicates the average reply time currently is 48 minutes? You probably want to create an Objective to Improve customer support. How would you know you’ve improved it or not? Well, if the average reply time drops from 48 to 30 minutes. So that would be your Key Result. What will you do to make that happen? You may want to hire an extra support manager, streamline processes or implement Zendesk (which are all Initiatives).

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OKRs provide the missing link between ambition and reality. They help you break out of the status quo and take you into new, often unknown, territory. If you have a big dream — an inspiring Ultimate Goal — for your orgamization, you need OKRs that take you there.