Implementing an OKR (Objectives and Key Reports) Methodology
This summary was based on Christina Wodtke’s Introduction to OKRs, http://tinyurl.com/gnwjz9z, written for O’Rilly Media. Check it out for more details on transitioning into using OKRs, common pitfalls to avoid and an approach to setting OKRs on a departmental or group basis.
OKRs, a method of defining and tracking objectives and their outcomes, are used by Google, Twitter and many other Silicon Valley companies to ensure overall team focus, alignment and velocity.
The form of OKRs (Objective and Key Reports) has been more or less standardized: the Objective is qualitative, and the Key Results are quantitative. OKRs focus a group or individual around a bold goal for a set period of time.
Our mobile team’s OKRs for can provide techniques for measuring strategic success, answering such questions as “What do we want to achieve this quarter and how can we measure our success in the real world?”
We can implement OKRs by:
- Setting quarterly group goals based on overall Chase priorities
- Defining OKRs on group, team and personal levels based on our quarterly goals
Setting OKRs allows us to continually evaluate progress by baking our quarterly goals directly into the daily and weekly cadence of our work life via meetings, status updates etc.
Some advantages of OKRs:
- They stimulate strong planning and execution—OKRs are aspirational, with equal chances of being achieved and not being achieved, so hard work is required to achieve them
- They specify time-boxed, quantifiable, inspirational results
- They enable high visibility of progress via regularly updated, publicly shared progress charts detailing:
- OKRs shared across teams
- Velocity of achievement
- Clear team-by-team accountability and alignment
- They motivate team members with this transparency of progress
Celebrating progress is key to implementing successful OKRs. Progress can be:
- Tracked weekly via Monday Commitments and Friday Wins
- Reevaluated regularly for waxing and waning confidence-in-success levels
- Used to encourage cross-team collaboration
Google has a great website, rework.withgoogle.com, with OKR strategies including:
- Implementation guides
- Information and inspiration on maintaining an OKR-based approach
- Lots of real-world examples
OKRs are not a comprehensive means to evaluate a group/team/individual’s performance—instead, they establish a summary of what’s being worked on by all teams and how that work contributes to and impacts our entire group’s OKRs.
WHY ADOPT OKRs?
- OKRs are adopted by organizations for three main reasons:
- Focus: What do we do and not do as a group?
- Alignment: How do we focus the entire group on what matters most? How does this align with Chase’s overall priorities?
- Acceleration: How can we ensure our teams reach their potential?
By using OKRs to connect design solutions directly back to core business objectives and metrics, we can clearly demonstrate our group’s value to both customers and decision-makers
HOW GOOGLE USES OKRs
- Google evaluates OKRs using a scoring system from 0.0 (failure) to 1.0 (complete success), with an expectation of achieving around 0.7; achieving a 1.0 is considered extraordinary performance
- OKRs define the measures of success from the outset. For example, an OKR could be to launch a new product with 10 active users in Q3:
- 0.3 success – Prototype tested by 3 internal users
- 0.7 success – Prototype tested and approved with launch date in Q4
- 1.0 success – Product launched with 10 active users
- Quantifying success metrics at the beginning facilitates conversations about what is aspirational vs realistic when planning OKRs
- OKRs are usually set by quarter
- Each Objective usually has 3 related Key Results
- Objectives should be SMART (specific, measurable, achievable, results-focused and time-bound)
- Objectives should include some stretch goals—where the confidence level for completion is about 5 out of 10
- Stretch goals can be paired with career conversations to help plan longer-term outcomes beneficial to both the individual’s career and the team’s strength
- More about career conversations: http://tinyurl.com/jupuvwx
CREATING EFFECTIVE OKRs
An Objective is a single sentence which is:
- Qualitative and inspirational yet realistic
- Actionable independently (ie includes no external dependencies for successful completion unless explicitly agreed upon)
Good Objectives: Launch an MVP, transform customers’ coupon-using habits
Bad Objectives: Increase sales 30%, double user base (note these are really KRs not Os)
Key Results quantify the inspirational. Are we looking for revenue, satisfaction, customer growth etc?
- Good results: Growth, engagement, revenue, performance, quality (measured using a tool like NPS)
- Example: Launch an MVP. Tough but possible KRs:
- 40% of users come back 2x/week
- Average recommendation score of 8
- 15% conversion rate
OKRs work best when baked into daily and weekly structures. For example, we could:
- Update OKRs at daily standups and/or weekly meetings
- Circulate weekly OKR status updates
- Mention associated OKRs when planning meetings etc
TRACKING WEEKLY PROGRESS AND SUCCESS
Celebrate success! Use increasing confidence and/or completion rates as grounds for celebration and hyping the team
- Jeff Weiner, CEO of LinkedIn, focuses on success by starting weekly meetings with participants sharing a personal victory and a professional achievement from the previous week
Monday Commitments/Friday Wins
One method for tracking OKRs is a Monday Commitments meeting, where team members report on their progress and commit to tasks for the coming week
- Focus on 4 quadrants:
- 1 – Intentions for the week
- 2 – Forecast for the month
- 3 – Status update on OKRs stated as a confidence level of ____ out of 10
- 4 – Status update on health metrics—two things we protect while striving to achieve, ie things we can’t afford to mess up like team well-being, code stability etc
- Use this Monday morning meeting to discuss the coming week’s priorities; changes in confidence levels in current work; whether or not the team is prepared for new major efforts; how to get team members any needed help; etc
Friday Wins pairs with Monday Commitments to ensure progress is visible and recognized. Everyone shares work in its current state, which:
- Enables a culture of frequent sharing without fear of not being finished or perfect
- Provides better understanding of everyone’s roles and responsibilities
- Provides incentive in the form of small treats (like donuts)
Weekly status reports
Write a weekly status report which:
- Leads with team OKRs and confidence levels for the coming week, marked in red when below three and in green when above 7
- Summarizes the previous week’s priorities, with a brief explanation if any weren’t achieved
- Lists the coming week’s priorities—only 3 top priorities per week
- Focus on fewer, bigger, cross-team priorities: make them meaty and multi-step, such as “Get approval on filtering results flow”
- These priorities set the agenda for the week’s work and also provide other teams with a heads-up of what’s due from them
- Contains a few lower priorities, accomplishable within a few hours
- Specifies all risks, blockers and dependencies
- Contains brief notes about associated matters, such as “3 team members in Columbus M-W”
- Sample format:
This isn’t a chore list! It’s a collective push forward toward shared OKRs—sometimes achieved, other times not. The report reflects reality without critiquing, judging or sweetening it
- Remember—achieving 2 of 3 OKRs is a good success
- Utilize these final weeks to abandon impossible OKRs and focus on the achieving the possible ones
Christina Wodtke is a consultant who trains companies to move from insights to executions; she’s worked for LinkedIn, Zynga and Yahoo, among others. She also wrote a recent book about OKRs called Radical Focus: Achieving Your Most Important Results with Objectives and Key Results.