Objectives and Key Results: A Practical Guide

July 5, 2022 Jen Handler

Are you new to OKRs, or perhaps you’ve used them before but are looking for tips and tricks to make them work better for you? Here is a practical how-to guide developed by a VMware Tanzu Labs product manager who has worked with dozens of teams from the Fortune 500 to adopt the OKR framework. 

What are OKRs?

OKR stands for objectives and key results. This is a management framework developed by Andy Grove at Intel in the 1970s, and it’s been used by many other organizations since—like LinkedIn, Oracle, GE, and Google—to focus teams of people on delivery of high-value results. There are two other people often associated with OKRs: 

  • John Doerr was one of Grove’s mentees, had a lot of success with OKRs, and wrote a book about them 

  • Christina Wodtke is another person who’s gotten a lot of practice with OKRs, and writes a lot about them 

Anatomy of an OKR 

An objective is “what we want to achieve” in support of a mission, within a certain timeframe (three months is common). Objectives are a bit vague, should be inspiring, and don’t contain numbers. They require further definition.  

A key result is a measurable way we’ll know that we’ve achieved our objective. It further defines our objective, and for every objective, it is common to have three key results. Good key results are leading indicators that we’ve delivered on our objective (what we can measure within the period), versus lagging (measurements after the period).

A mission is an important element of the OKR framework, too. Think of this as the culmination of your OKRs. OKRs represent milestones along the way of achieving your mission. 

Example

Imagine Sweetgreen, a store that sells salads in the U.S., is launching a new service that enables customers to buy additional produce, to use at home, from the store. This service will be called “Farmer Direct,” and the first product sold will be lettuce. Assume Sweetgreen has validated that customers want to buy more lettuce directly from the store in launch locations, and that they will launch the service in the first half of this period. We want to come up with one OKR for the quarter: 

Mission: To inspire healthier communities by connecting people to real food

  • Objective: Launch an awesome “farmer direct” buying experience

  • Key result 1: Point-of-sale lettuce purchases >20% total revenue for launch stores

  • Key result 2: 75% conversion in every launch store (conversion = oz. lettuce sold/oz. lettuce supplied)

How to get the most out of OKRs

OKRs can be incredibly focusing and motivating, but they can also be paralyzing and de-motivating. 

OKRs work best when they: 

  • Provide focus for a team on the results that really matter (because they are the results that really matter)

  • Drive alignment within teams

  • Help other teams know what a team’s focused on, at a high level (versus the detail in a backlog)

  • Inspire people on the team to reach further than they might otherwise

  • Help teams deliver some amazing results (versus a collection of outputs with unclear results)  

  • Are something leadership and the team care about

  • Are frequently checked in on, and new actions are generated to achieve the OKRs

OKRs won’t work when they: 

  • Are totally unachievable given known constraints/conditions. Aspirational is good; totally unachievable because of [solid reasons] is not good. 

  • Don’t represent the things that matter most for the team to deliver

  • Aren’t focused. Too many OKRs is a bad thing. A good target is three OKRs. 

  • Aren’t measurable (the key results aren’t measurable)

  • Are not something leadership and the team care about 

  • Are set at the top of the quarter, then forgotten

Key roles

Shepherd: The OKR shepherd looks after the OKR process, and manages the team through it. The OKR shepherd isn’t accountable for all of the OKRs, but the OKR shepherd might be a captain of an OKR or two. 

Captains: Every OKR needs an owner, someone to look after the OKR. This means: 

  • Measuring KRs

  • Ensuring there’s work being done to deliver the OKR

  • Influencing others to participate in the work to deliver on the OKR

  • Holding planning meetings for the OKR, as needed

  • Participating in OKR planning meetings 

  • Sharing feedback (what’s working, what isn’t working) about the OKR process

Captains are not responsible for doing all the work themselves. The objective is to influence and enlist others in the work.  

The OKR cycle

Generate 

Toward the end of an OKR period, we’ll consider the next period’s OKRs. Some may carry over, others may be new. There are three ways this can work: 

  • Leadership puts forth suggested OKRs; the team provides feedback; OKRs are refined and set. 

    • Works well when the team is not very experienced with OKRs and/or does not have the insight to be able to generate OKRs 

  • Leadership puts forth suggested objectives only. Team provides feedback, then generates key results collaboratively with leadership. OKRs are set.

    • Works well when the team is starting to become more comfortable with OKRs and has a bit of insight to be able to generate OKRs (but not without leadership support)

  • The full team collaborates on the generation of OKRs for the period. 

    • Works well when the team is experienced with OKRs and has the insight needed to be able to generate OKRs 

Deliver

Once OKRs are generated and set, we move into the deliver phase. Within this phase, there’s a repeating cycle through the period that looks like this: 

Act

Delivering a key result tends to involve doing a bunch of different things. These things are to-dos or backlog items. Some may have a more immediate impact than others, and we’d prioritize those. 

Measure and learn

Throughout the period, we’ll measure KRs to know how well we’re doing, and to inform our confidence level in our ability to deliver these results. For quarterly OKRs, it works well to measure every 1–2 weeks. This is how we know whether new actions are needed. In check-ins, we can enlist the team to help us figure out what actions to take, and which to take first.

Check-ins

Throughout the period, we need to check in on our OKRs and iterate—either on the OKRs themselves, if priorities have changed, or on the things we’re doing to deliver OKRs.  

How this has worked for us:

  • Every two weeks, captains (mandatory) and anyone else interested in joining (optional) will gather on Monday afternoon to talk about how it’s going with our OKRs 

  • The goal of this meeting is to help one another come up with ideas for how we can get some of those low confidence scores up 

  • Captains should come to the meeting prepared with a confidence score for each of their KRs, and be able to talk about the why behind their confidence score (why it’s low, or why it’s high)

How to run a confidence check

Captains may want to take on confidence scoring with the people working on the OKR prior to the check-in. Here’s how to run a confidence scoring session to generate actions.  

Time: One hour

  1. Set the meeting up with a quick refresher on why we’re here and what we’ll do today.

  2. Facilitator prompts: “Any questions/concerns before we start?” Give people a minute to do a silent read and offer thoughts. Assuming they’re ready to go… 

  3. Facilitator prompts: “Take a minute to read the first objective and key result, and think about how confident you are in our ability to deliver on it.”  

  4. Score: When everyone appears ready to score, the facilitator counts to 3 and, on 3, each person shows their score using their fingers. Use a scale of 1–10, with 1 being “hardly any confidence” and 10 meaning “we’re super confident we’ll crush this.” You can also use a 1–5 scale, which may help the team avoid questions like “what is the difference between a 7 and an 8?”

  5. Discuss: Facilitator prompts: “Let’s discuss!” People take turns talking about why they gave their scores. The facilitator takes loads of notes. Why the high score? Why the low score? And this might blend into the next part...

  6. Generate actions: At some point during discussion, the facilitator prompts: “What could we do today to boost our confidence?” The best ideas go into the backlog.

Score

OKR scoring is about scoring how well we did (versus confidence). Traditionally it’s done after the period ends. I’ve found it to be more useful to do a preliminary score prior to the end of the period, though, because it can motivate a team for a last-minute burst of action, and could inform OKRs for the next period.  

OKR scoring looks a lot like confidence scoring, except now we’re scoring how well we did (or, really, how well we are on track to deliver). Here’s John Doerr’s scale: 

Instead of discussing additional things we can do to deliver our OKRs—like we do in confidence checks—we’ll now discuss what we might want to carry into the next quarter (and why), and what we learned in this quarter that may have an impact on next quarter’s OKRs. 

(By the time we score OKRs, we may be well into planning for the next quarter and have a draft that can be adjusted based on discussion in our scoring session.)

Other stuff

Here are some other suggestions/thoughts I have related to OKRs. Some of these are departures from the advice some books would offer on OKRs. These come from my own practical experience. 

  • If we need to change them, let’s change them. OKRs are proven to be great tools for focus, but let’s agree to not use them as contracts. If priorities shift dramatically and an objective or KR doesn’t seem relevant anymore, say something! Let’s talk about it. 

  • Celebrate wins along the way. Delivering a KR is a big win, but delivering an outcome along the way of delivering an aspirational OKR is also a big win. If you have a win, radiate it to the team so we know and can celebrate.

  • Let’s figure out how to account for and support “non OKR work that’s also important.” This could be “business as usual” work that simply needs to continue to keep our business humming. It could be occasional customer work. We want to balance this with OKR work, and make sure we have the bandwidth to make a strong impact on our OKRs. We may also find that some work that seems important and doesn’t seem to map to what an OKR actually is. 

  • Make sure leadership and the team are aligned on how aspirational or realistic the OKRs should be. Teams will really struggle if some of the crew feel that any of the KRs are more "set in stone" than they are intended to be. 

Further reading

Quick reads:

Longer reads:

About the Author

Jen Handler

Jen Handler has been in product management for 15+ years, helping teams get into a rhythm of shipping valuable solutions to users and customers, and helping portfolio and line-of-business leaders create environments in which people deliver their best.

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