Intro to OKRs

What is an OKR goal-setting framework?

OKRs (Objectives and Key Results) are a strategic framework designed to drive an organization’s focus toward key outcomes – they serve as a communication tool that connects a company’s strategy, current challenges, and key priorities for the next time horizon.

OKRs provide an objective way to measure progress toward important goals – OKRs use quantitative measures of success that enable leadership to determine whether an organization’s operational activities are supporting its strategic goals. OKRs’ measurable outcomes help reveal which initiatives are and are not driving the company forward.

What are the benefits of using OKRs? Why would you use OKRs instead of another goal-setting framework?

OKRs provide a guardrail for focus – to distill an organization’s priorities into 1-3 OKRs, leadership must take a holistic view of organizational performance and align on the important outcomes that will have the greatest impact on bringing the organization’s longer-term strategy to life.

OKRs improve alignment to ensure each level of an organization prioritizes the right activities – OKRs help both teams and individuals better understand what is important and how to filter and prioritize specific initiatives. If every function understands which activities support the organization’s OKRs, attention and resources can be applied more strategically.

OKRs facilitate communication and transparency – the straightforward, trackable nature of OKRs makes them a useful tool in explaining important initiatives, challenges, and performance across the organization. Cross-functional collaboration also improves when different teams better understand how they’re working toward the same goals.

OKRs are simpler to understand than other goal-setting frameworks – the advantages of the OKR framework include its:

• Universal language and structure – all teams structure OKRs in the same way, which makes it easier to understand the priorities that other parts of the organization are working toward. For example, an engineering OKR  and a marketing OKR, would have the same structure.
• Quantitative nature – OKRs are less subjective than other frameworks, which makes them a useful tool for evaluating progress. 
• Outcome orientation – OKRs encourage leaders to think about outcomes/impact over output. This focus on results rather than specific activities encourages innovative approaches to achieving goals.  

How are OKRs, KPIs, and individual performance goals related?

Framework		Function		Example
OKRs		Focus on the underlying organizational dynamics that require improvement. Many OKRs are leading indicators that influence other KPIs.		Improve product responsiveness from 1 second to 0.5 seconds (in order to improve weekly active users).
KPIs		Provide a snapshot of the current health of an organization, function, initiative, or individual’s performance. Many KPIs are lagging indicators.		Weekly Active Users (lagging indicator)
Individual Performance Goals		Measure individual contributions to outcomes, including the impact of tactical efforts toward team objectives.		How individual engineers are contributing to the effort to improve the 15 stories we’ve roadmapped to improve product responsiveness.

What are the prerequisites an organization should have in place before it begins using OKRs?

Organizations must be ready to commit to a focused mindset – OKRs make it easier to say “no” to initiatives that don’t serve your strategic priorities. The executive team must lead by example and demonstrate that leaders are allowed to reject projects/ suggestions that distract from these priorities.

A culture of transparency is a prerequisite for effective OKR programs – OKRs focus on a business’s greatest areas of opportunity—and its most critical problems. If your culture doesn’t make employees feel comfortable discussing problems, you will struggle to choose meaningful OKRs, take an innovative approach to solving problems, and/or accurately measure progress.

Leadership must be comfortable adapting their decisions based on data – many OKRs are hypothesis driven (e.g., “If we improve response time by X, weekly users will increase by Y”). They are designed to lead organizations in the right direction and change over time, not to prove that the team that set the OKR was right or wrong.

You need access to the right data to maintain an OKR program – OKRs are unenforceable if your data infrastructure doesn’t provide access to relevant and accurate performance data. Similarly, if your team doesn’t yet know which quantitative metrics are most important, you aren’t ready to run an OKR program.

Setting OKRs 

How do you set OKRs? How should you approach setting OKRs for the first time?

How to Set Initial OKRs
Step			Example output
1. Start with a time blocked bird’s-eye view of your organization’s trajectory – ensure executive alignment by identifying the time frame you want to focus on and the biggest issues you’re currently facing.			Issue: poor financial health
2. Identify the core challenges that are causing that trajectory or preventing your organization from realizing its vision – consider both internal and external struggles and quantitative and qualitative challenges. If you overcome a core challenge, you should be one step closer to achieving important organizational goals.			Core challenges: high churn rate/ low retention, high CAQ
3. Confirm your most important KPIs – before finalizing your OKRs, determine the top 10 KPIs that the CEO or board would evaluate to gauge if your organization is healthy.			Relevant KPIs: churn rate, GRR, CAQ
4. Define what success looks like – objectives describe your desired future state, not the lack of a challenge identified in Step 2. Objectives should be clear and compelling.			Objective: Get financially healthy in the next X months. “Financially healthy” means that CAQ ≤ X, Churn ³ Y, and GRR improves by Z%

Who should own the creation, management, and evaluation of OKRs?

OKR ownership exists at all levels of an organization – executives own company-level OKRs, team leaders (e.g., CMO, CTO, CRO, etc.) own their teams’ OKRs, and individual contributors (e.g., certain salespersons) own personal OKRs, as applicable.

Every OKR program needs a dedicated champion – at large organizations, the Chief of Staff or Director of Strategic Initiatives is responsible for the strategy of the OKR program and ensuring that the process runs consistently and on time. At smaller organizations, the CEO/ founder is responsible for providing direction and clarity around the company’s key priorities.

What are the characteristics of effective OKRs?

Strong OKRs have distinct characteristics:

Good Objectives have:

• Clear focus and complementary description – the direction of change is described in a specific and easy-to-understand way. Furthermore, the OKR includes a rationale for why this particular objective (and not something similar) was chosen. This rationale connects the OKR to the organization’s strategy.
• Specific time frame – OKR time frames range from 3 months to 1 year. Time frames are critical when setting OKR goals. 
• Inspires innovation – organizations don’t generally achieve 100% of each target; OKR targets are stretch targets. The target that you want to achieve should be 70% of the target stated on your OKR. Stretch targets motivate teams to explore creative solutions to challenges that determine the success of the organization.
• Action oriented – OKRs should be linked to specific initiatives and provide direction for how a team should prioritize projects, actions, and tasks that contribute to the objective.  
• Collaborative – co-ownership and collaboration unlock new ideas and create opportunities for teams to work better together. OKRs that require shared ownership between teams could result in solutions that wouldn’t be discovered in a siloed environment.

Good Key Results have:

• 3-5 measurable results – each OKR includes 3-5 key results that, when considered together, give a well-rounded perspective of what success (and progress) looks like. If you include more than 5 key results, you can’t trace progress back to a specific factor. If you include fewer than 3 key results, you are more likely to miss a potential indicator. Each result should be as quantitative as possible.  
• Focus on outcomes rather than tasks – Key results measure the outcomes that matter most, not the activities or tasks leading to that outcome. For example, “Increase customer satisfaction score from 25 to 40” is more outcome-focused than “Send out 3 email campaigns.”
• A focus on leading indicators when possible – Leading indicators can act as early signals that show whether you’re on track to meet your objective. They’re typically actionable, offering opportunities to pivot quickly if you’re off-track—before final (lagging) outcomes are locked in. Examples might include pipeline coverage or user engagement metrics rather than total sales or churn rates.

Examples of Strong OKRs

Below are two sample OKRs illustrating how these guidelines might look in practice.

Examples of a Strong OKR

Example 1: • Objective: Enhance customer satisfaction with our support services in Q4 • Key Results: • Achieve a net promoter score (NPS) of 40 (up from 25). • Resolve 90% of incoming customer tickets within 24 hours. • Reduce average wait time on calls from 5 minutes to 2 minutes. Example 2: • Objective: Ignite brand visibility in new markets by EOY • Key Results: • Increase monthly website visits from targeted regions by 30%. • Secure at least three new press mentions in top-tier industry publications. • Generate 500 new marketing-qualified leads (MQLs) from those regions.

Weak OKRs fail to unite an organization around what needs to change – beyond having the opposite characteristics listed above (e.g., unclear priorities, lack of measurable goals, vague timeline, uninspiring, hard to translate into action, and siloed), weak OKRs create confusion and/ or center an organization around the wrong priorities.

Example of a Weak OKR

Objective: Focus on Go To Market Key Results: • Send 100% of scheduled newsletters • Acquire more leads • Be more effective at ABM Marketing

How do you cascade OKRs effectively across different organizational levels while maintaining alignment and autonomy?

Every team should prioritize their own OKRS using Company-level OKRs as a guardrail – each team identifies their initiatives based on their own set of problems, challenges, and KPIs. The narrative of the company-wide OKRs should be passed down to team leaders, which allows them to maintain autonomy and choose which team-level OKRs to focus on. For example, Marketing might have 8 key challenges. Company-level OKRs can help the CMO identify the 3 of those 8 challenges that will have the greatest contribution toward the company’s OKRs.

The same OKR should not exist at more than one level in an organization – it’s redundant to repeat OKRs at the company and team level. This repetition also limits the utility of cascading OKRs. For example, if an OKR is to hit a revenue target, giving the revenue team the same team-level OKR doesn’t help them see which actions or strategies need to change in order to hit that goal.

Effective cascading OKRs rely on clear communication – the ultimate goal of an OKR program is to align all levels of an organization on key areas of focus. If leaders fully understand company-level OKRs, they should be able to work with their teams to devise team- and occasionally individual-level OKRs that ladder up to those high-level priorities.

How many OKRs should you have as a company and as a function/ individual? 

The ideal number of company-level OKRs is 1-3, depending on maturity and alignment needs – OKRs should be helpful and fit naturally into your team dynamic. Below are examples of how large and small teams use OKRs differently:

• Early-stage companies benefit from fewer OKRs – growth-stage companies perform better when they hyper-focus on the initiatives that matter most. Focusing the team’s efforts on 1-2 OKRs also helps founders ensure that lean teams are spending time and money on issues that are critical to the business’ development.
• Larger organizations might rely on 2-3 OKRs to drive clarity across larger teams – if people in your organization feel lost or don’t understand how their day-to-day work connects to the big picture, OKRs can provide that operational direction. OKRs are also useful tools for leaders who don’t have the bandwidth to repeat their thinking to numerous direct reports (another sign of poor alignment), or for teams that are prioritizing projects that don’t support the company’s goals.

Teams should begin with 1 OKR each, though team-level OKRs don’t make sense for all companies – teams should never have more than 3 OKRs. An excess of OKRs indicates that the team leader is unclear on how their function supports the company’s overall strategy. 

Only companies with individual contributors should consider using individual-level OKRs – individual-level OKRs can make sense if they don’t disrupt a team’s natural dynamic. For example, people in sales might naturally work as individuals and will feel motivated by having individual OKRs. However, this framework would create confusion for teamwork-based functions like Product.

Managing OKRs

How do OKRs fit into your company’s strategy lifecycle? 

OKRs play a role in 3 key lifecycle points:

• Strategy development – learnings from past OKRs should inform the strategic planning process and future OKR development.
• Deployment – communication around OKRs guides teams in prioritizing their initiatives and possibly creating their own supporting OKRs. This is the bridge between strategy and day-to-day execution.
• Execution – tracking performance against OKRs helps determine how effective specific projects are in furthering the company’s goals. This also helps teams remember the reasons behind important projects and decisions.

OKRs are an opportunity for leadership to explain the company’s challenges in a way that all employees can understand – leadership should present OKRs as part of a narrative. This narrative begins with the challenge that inspired the OKR, how the team is tackling that challenge, how they will know that they’ve overcome it, and how day-to-day activities will move that work forward.

How do you translate OKRs into action? How do you ritualize OKRs in your operating system?

Ingrain OKRs into the existing rhythm of your business – frameworks are more highly utilized, have greater impact, and have longer staying power when they are incorporated into existing rituals. For example, instead of adding a new biweekly meeting called “OKR Check-In”, use the OKR framework to filter issues to focus on in existing meetings.

Regularly speak about OKRs – OKRs become useless if you take a “set them and forget them” approach. Put in a conscious effort to tie key results to OKRs until you and your team automatically think about projects in the context of the company’s priorities.

Don’t force OKRs into performance reviews unless you’re using individual-level OKRs – while individual contribution to projects that support OKRs should factor into performance reviews, the result of the OKR itself shouldn’t influence someone’s review.

How do you monitor OKRs after they are set and hold people accountable to the results? What do you do if results are missed?

Use a dedicated tracking system that is updated regularly (or automatically) – capture both quantitative progress and qualitative updates/ confidence levels, and make that system available to the full leadership team.

Check in on your OKRs on a biweekly basis – the OKR champion should track both quantitative progress toward OKRs and the qualitative confidence of the person/ team responsible for them. The qualitative evaluation is important because most OKRs aren’t linear. For example, Sales might not have any sales to report in the first month of a quarter due to the nature of their pipeline, but they might be very confident in their ability to deliver on the OKR by the end of the quarter.

Transparency around progress updates requires a culture that values honesty and learning – team owners should be honest about whether an OKR is at risk, and they should feel comfortable flagging that risk. Neither the OKR champion nor those responsible for updating the tracking system should feel pressure to sugarcoat results.

Establish clear pivot points to determine whether OKRs need adjustment – if an OKR is no longer useful or appropriate (e.g., the team thought improving CAC was the most important objective, but they’ve now discovered that improving churn has a much larger impact on profitability), it should be replaced. Because OKRs are based on hypotheses, this process is natural and expected. However, you should still track key results that are no longer OKRs and incorporate those learnings into future OKR-setting meetings. 

Tooling

How should you incorporate AI into your OKR setting process? 

AI can help disseminate OKRs and their trickle-down impact to different teams – if you can’t effectively communicate what your OKRs are and why they matter, you will struggle to effectively leverage the OKR framework. AI can provide different formats of your OKR narrative (e.g., visual, written, auditory) and help you answer questions posed by different teams.

AI lets you better track certain types of key results – AI can turn qualitative insights into quantitative measures that can then be incorporated into OKRs. This is especially useful for companies seeking to gauge customer satisfaction, since AI can track both NPS score and customer comments and convert them into a proxy quantitative metric.

Don’t ask AI to generate OKRs, but you can ask AI to improve them – AI-generated OKRs won’t be as valuable as human-generated OKRs. However, if you provide an AI tool with your team’s OKR draft and full context, it can help you refine them.

What tools help support the maintenance of an OKR program?

Tools allow you to track key results over time and improve consistency amongst your team – since OKRs are stretch goals, tracking them over time allows you to audit how key initiatives progress from both a quantitative and qualitative standpoint. By requiring your team to regularly update their metrics, you also help ingrain the OKR framework into your organization.

A variety of tools can help establish consistency:

• Homemade tools – using something as simple as a whiteboard in your office can help the team stay on track and apprised of OKR progress.  
• Spreadsheets/ Google sheets – spreadsheets can track performance over long periods of time and demonstrate how different OKRs are connected.
• Automated OKR tools – professional OKR/ strategy management tools such as Quantive, Notion, and Coda can integrate with your CRM and other key systems. Tool dashboards also make it easier to track compliance and connect OKR progress to specific.

Overall

How does the use of OKRs change as your company grows?

The OKR setting process becomes faster and more efficient – as companies and teams grow, the time available for setting and reviewing OKRs becomes more compressed due to increased demands on leadership’s time. Processes must be improved without sacrificing effectiveness.

Teams play a greater role in setting OKRs – larger organizations benefit from giving teams more autonomy in OKR setting and management. By giving teams the onus of ownership, setting OKRs feels like less of a process and more like each team is involved in setting the company strategy.

Inter-departmental OKRs encourage collaboration – creating shared objectives between teams and clarifying dependencies incentivizes different functions to work together. This is especially helpful for organizations that struggle with siloes.

A learning mentality enables continuous OKR process improvement – growing companies should regularly experiment with and refine their OKR process. Try one OKR experiment (e.g., a new OKR-setting process, testing out individual-level OKRs, limiting each team to 1 OKR, etc.) each quarter and incorporate what works into your consistent practice.

What are the most important things to get right?

Get the team’s buy-in during the company planning stage – the biggest risk of an OKR program is that you set OKRs in a vacuum. The more time you dedicate to collaboration during strategic planning, the more effective your OKRs will be. If others haven’t contributed to your OKR setting process, your OKRs might not be correct, alignment could be at risk, and it will be more challenging to convince your team to commit to these OKRs.

What are common pitfalls?

A lack of consistent attention to your OKR program – without a designated OKR owner/ champion, it can be easy to lose track of your OKR program. Failing to hold the team accountable for learning from past OKRs – OKR programs are learning opportunities. Each OKR cycle should inform and improve the next cycle through structured reflection and adjustment.