What Is the Meaning of OKR? Definitions & Examples


What Is OKR?

OKR is a goal-setting technique used to track progress as teams move towards achieving objectives that are ambitious and in alignment with the company vision. Google famously found the OKR framework to be an essential tool for pushing the envelope and achieving continual growth, along with other companies like Twitter and Uber.

These objectives and key results have become a central tenet to a management methodology that helps make companies focus their efforts on the same important issues across the organization. But before defining the OKR methodology, we need to understand what these objectives and key results are, and why they’re so important for helping companies manage their performance and set goals.

What Are Objectives?

An objective is different from a goal or goal setting. Objectives are specific actions or measurable steps that team members take to achieve their company goals. That is, objectives are what you want to achieve in your performance management, employee engagement or brand awareness. Therefore, an objective is concrete and action-oriented to achieve the company’s vision.

What Are Key Results?

Key results are how one monitors their progress in reaching objectives. For key results to be effective they should be specific, with a deadline and measurable goals. Key results are verifiable, either you’ve done it or you’re not. They are binary in the OKR methodology. Company objectives have no gray area. Key results are checked quarterly in the OKR system and these goal setting objectives are marked as fulfilled or not.

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OKR Examples

To better understand Objectives and Key Results (OKRs), let’s take a look at some OKR examples from different industries.

1. Marketing OKRs

Objective: Increase software signups via email by 50% by the end of Q3.

Key Results

  • Increase email open rate by 50%
  • Increase email click-through rate by 30%
  • Decrease email bounce rate by 20%

2. Sales OKRs

Objective: Meet the monthly sales goal by the end of March.

Key Results

  • Use SEO to attract 50,000 more visitors to your website
  • Use online ads to generate 5,000 clicks
  • Improve social media traffic by 50%

3. Product Development OKRs

Objective: Create a Prototype for a new product.

Key Results

  • Assemble a team of experts
  • Purchase all the required raw materials and components
  • Secure the workers and equipment needed to produce the prototype

4. Manufacturing OKRs

Objective: Increase the number of units produced in a month by 50 percent by the end of June.

Key Results

  • Conduct a process mapping analysis to visualize the current manufacturing process
  • Find any inefficiencies in the current production line
  • Develop an improved manufacturing process
  • Purchase new equipment to speed up the process

As you can see it’s a simple process that sets clear, yet challenging, objectives. However, there’s more to executing OKRs than just writing them down.

How to Write OKRs

When it comes to OKRs, success is marked by reaching beyond your perceived limits, so the first thing you want to do is set up objectives that make teams push themselves. They might not reach the goal line, but if they get close, then you’re already ahead of the game.

After you set your objectives, you’ll want to define a few measurable key results that are quantifiable, achievable and, while difficult, are able to be graded. They can be based on growth, performance, revenue or engagement. While it’s more likely that these measurements will have a range, you can also go binary with a yea or nay result.

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Check Progress

Once those objectives and key results have been established, you’ll want to have regular check-ins that are made public, so everyone is aware of when they are being held and can be prepared when it’s time to report. This goes for everyone in the organization from the top down. The success of OKRs is dependent on the fact that all company members are clear about what their goals are, as well as their teammates’ goals.

It’s not all work, though. Now that you have a structure in place to set goals and track performance, you can’t neglect rewarding success. That means recognizing and celebrating when goals are met, or when significant progress is achieved. It acknowledges the hard work your team has put in, and it helps to build closer-knit teams that will work even more productively moving forward.

History of OKR (Objectives & Key Results)

Early Google investor, John Doerr, attended a course within Intel taught by Andy Grove in 1975. It was here that he was introduced to the theory of OKR, which Grove said was a simple but effective management tool.

“The key result has to be measurable,” Grove said. “But at the end, you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it.”

In Doerr’s book, Measure What Matters: How Google, Bono and the Gates Foundation Rock the World with OKRs, CEO of Alphabet and Google co-founder Larry Page wrote in his forward, “OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazy bold mission of ‘organizing the world’s information’ perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered most.”

Famous Companies that Use OKRs

Google and Alphabet aren’t the only major companies that have adopted OKRs in their organization. Successful companies like Netflix, Amazon, Dell, Dropbox, Facebook, Samsung and Twitter have all started using Objectives and Key Results to propel their companies to the forefront of their perspective industries. They rely on OKRs as a way to motivate and inspire their teams to reach goals they never thought possible.

Benefits of OKRs

The simplicity of the process is great, but the benefits are even better. The method is designed to keep the vision, goals and objectives of the company, team or individual in the forefront. People know what’s expected of them and how their work fits in with the larger tasks of the team, department or company.

The great thing about OKRs is that they don’t take much time to set up, and they’re easy to use. Everyone understands them and meeting to discuss progress is clear and only needed every now and then. While individuals will have a more intimate relationship with their progress, and they’re responsible for their tasks, the time-wasting of too many meetings is avoided.

Managers love OKRs. It gets people motivated and aligns organizations to work collectively towards common goals and objectives. It keeps people focused on the important goals, while not ignoring smaller tasks. Overall, OKRs provide a great boost to an organization’s focus and productivity.

OKR Best Practices

Committing yourself to goals is the surest way to achieve them. Using OKR as a means to achieve those goals gives you a structure. But there are certain things that must be adhered to when setting up your OKRs in order to better your odds at success.

Make Objectives Clear

The worst thing you can do is have foggy objectives. There’s no way to achieve what isn’t clearly defined. Therefore, boil the objective down to its essence, which will make it easier to understand by all and easier to reach.

Make Objectives Inspiring

A clear objective doesn’t mean a dull one. While you want to make objectives plain and simple to understand, you also need them to inspire. It helps to set those goalposts high, what is often referred to as a “moonshot OKR.” This not only inspires teams to give more, but it also helps to make them think outside the box for less traditional methods to achieve the high standard you set.

Make Objectives Public

Think of this as the transparency rule. Everyone’s objectives throughout the organization are known by all members of the company. This helps each team member see how their individual goals are aligned with the other goals of the company. This let’s them see how their work is part of the larger picture, which improves their engagement and focus.

Always Measure Progress

Once you’ve set an objective, you’re not finished. Of course, you must reach your objective, but to achieve that you must track your progress every step of the way. Therefore, set up a metric to measure your progress, and make sure that your team is doing the same.

Failure Happens

When you set lofty goals you’re not always going to reach them. Failure is part of any process and should not be punished or used as a shaming mechanism. Within the OKR framework, it’s important to constructively deal with failure. There is usually a lesson embedded in every failed project that holds the key to future success.

What’s the Difference Between OKRs and KPIs?

Finally, you might be wondering, well what’s the difference between KPIs and OKRs? Key Performance Indicators (KPIs) and Objectives and Key Results (OKRs) are similar metrics used in management. The main difference is that KPIs are just metrics to measure performance, while OKRs are part of a goal-setting method that can be used by organizations to build action plans and track performance.

When you’re tracking goals and giving everyone access to those common objectives, it helps to have a tool that will facilitate the process. ProjectManager is an online project management software that is a great platform for tracking progress and collaborating on projects. collaboration. See how it can help your organization use the OKR framework more effectively by taking this free 30-day trial.