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OKRs

About OKR

  • OKR is an alignment tool. But alignment can only happen when teams have structured conversations with each other to set priorities and solve interdependencies.
  • OKR is a management tool, not an employee evaluation tool.
  • OKR helps teams and organizations define shared success criteria.
  • OKRs should determine whether a person or a team achieved success.
  • Don’t turn your OKRs into a task list.
  • When setting your OKRs, try to evaluate:
    • Do you measure your effort or results?
    • Are your OKRs focused on your objective or on the means to get there?

  • 1 or more teams can share the same OKRs, but each team can have different initiatives.

  • Frequently set, tracked and re-evaluated - usually quarterly
  • What will you achieve and how you are going to achieve

  • A goal without a success metric is just a desire

OKR Format

I will as measured by

Objectives

  • Objectives should be simple,short and easy to memorize.
  • memorable, inspirational,engaging,motivate and challenge.
  • Objectives are ambitious and should feel somewhat uncomfortable.
  • Objectives shouldn’t be boring. They can fit the organizational culture and be informal and fun. You can use slangs, internal jokes and even profanity - watever fits your culture.
  • Objectives may rollover from one quarter to the next. e.g., such as “Delight our Customers”

Key results

  • Set of metrics to measure progress.
  • Each objective should have 2-5 KRs.
  • KRs must be quantitative and measurable.
  • Key Results can be the same overtime, just changing the targets.
  • Types of Key Results
    • Activity-based KRs
      • Measure the completion of tasks and activities or the delivery of project milestones or deliverables.
      • They usually start with verbs such as launch, create, develop, deliver, build, make, implement, define, release, test, prepare and plan.
      • e.g. Release beta version of the product, Launch a monetizing tab, Create a new training program.
    • Value-based KRs
      • Measure the delivery of value to the organization or its customers. Measure the outcomes of successful activities.
      • Typical structures
        • Increase/reduce ABC-metric from X to Y
        • Maintain ABC-metric in x (When we want to sustain one metric).
        • Reach Y on ABC-metric (When we are doing something new).
      • Examples
        • Improve net promoter score from X to Y
        • Improve average weekly visits per active user from X to Y
        • Improve engagement (users that complete a full profile) from X to Y
        • Reduce infrastructure costs from X to Y,
        • Maintain availability during migration in 99.99%

Types of OKRs

  • Strategic OKRs - longer term (annual), company or big department level
  • Tactical OKRs - Shorter term (quarterly), team level with a mid-quarter review
    • you need time to develop initiatives, measure their impact and iterate
    • when creating their tactical OKRs each team has to answer two questions:
      • How can we contribute to the strategic OKRs?
      • Which of the key results included in the strategic OKRs may we impact?
  • OKRs cannot be based on activities for three main reasons:
    • 1) We want a results-focused culture, and not one focused on tasks.
    • 2) If you did all your tasks and nothing improved, that is not success.
      • Success is improving something: Customers are more satisfied, sales are higher, costs have been reduced.
    • 3) Your action plan is just a series of hypotheses
      • The lean startup methodology taught us that an idea is just a non-validated hypothesis.
      • when setting OKRs, focus on the destination, not on the means to get there.

OKRI (Objective, Key Results, Initiatives)

  • Objectives: What we want to achieve.
  • Key Results: How are we going to measure our progress?
  • Initiatives: What are we going to do to reach our OKR: projects, tasks or activities.
    • Initiatives are just bets and have to change if the numbers aren’t improving.
    • Instead of tracking the delivery of a project, we should measure the indicators that motivated it in the first place.

Moonshots vs. Roofshots

  • Moonshots
    • Moonshots are ‘Stretch goals’
    • Just beyond the threshold of what seems possible
    • Success means achieving 60-70%
    • Cons
      • Can demotivate people if they can only 60% every time.
      • Lack of accountability and commitment (hey, it’s just a stretch goal)
    • Best practices
      • Have one Moonshot KR per objective and others as roofshots
  • Roofshots
    • Goals that are hard but achievable
    • Success means achieving 100%
  • OKR cadences
    • 1st OKR period: Apr 1 to Jun 1
    • 1st OKR review: May 15
    • Weekly check-ins must happen - even during scrum (OKRs shouldn’t turn into New Year resolutions)