In the 2010s, investor John Doerr set out and popularized a new way for companies to reach their goals — OKRs (objectives and key results).
As well as defining the destination, and the roadmap to get there, OKRs aim to align individual and team efforts to overarching business objectives and keep everyone focused on the same thing – success.
Implemented correctly, OKRs can help staff at all levels of a business focus on the same important issues, drive performance and results, and ensure transparency and accountability throughout.
Below, we’ll talk through how OKRs work in more detail — and help you apply them to your business.
In this guide:
What is OKR?
Objectives and key results (OKRs) provide a simple yet powerful goal-setting framework, that can form an important approach for growth and high performance in companies.
It can help businesses understand what they want to achieve (objectives), and how they will measure success (key results). Wielded correctly, this can form an effective tool in aligning and engaging everyone at the company around important, measurable goals.
Designed to create clarity in an organization, and connect workers at all levels to your top business goals, OKRs are all about setting challenging, collaborative aims with definable outcomes.
- Think of the objective in OKRs as a “strategic theme”: a broad, overarching, qualitative headline of what is to be achieved.
- The objective’s key results resemble KPIs (Key Performance Indicators). The key result can be either a metric or a measurable milestone.
As OKR pioneer John Doerr explained in an interview with the Harvard Business Review: “The objective is what I want to have accomplished. The key results are how I’m going to get it done. The objectives are typically longer lived. They’re bold and aspirational. The key results are aggressive, but always measurable, time-bound, and limited in number.”
A brief history of OKRs.
The history of OKRs includes a who’s who of American corporate history.
- In 1954, the business guru Peter Drucker — often considered the founder of modern management practice — laid the foundations for OKRs with his Management by Objectives (MBO) framework.
- MBOs, however, had their drawbacks — namely the focus on quantity, rather than quality.
- A few decades later, MBOs were adopted by Andy Grove, CEO of Intel, in Silicon Valley’s burgeoning tech industry. It was Grove who added the emphasis on individual key results, rather than overarching objectives, and tailored them specifically for Intel as Intel Management by Objectives (IMBOs).
- It would be John Doerr, then working under Grove at Intel, who would bring the OKRs we know today into the mainstream. As a key investor in Google, it was Doerr’s advocacy that would bring OKRs on the radar of founders Larry Page and Sergey Brin in the late 1990s.
- Household names such as LinkedIn, Twitter (now X), and Uber would follow suit — and Doerr would cement his legacy as the oracle of OKRs in his book Measure What Matters in 2010.
What are the benefits of OKRs?
As a management goal-setting system and methodology, OKRs are designed to focus everyone’s efforts on the most important priorities, connecting the work of employees to what truly matters at the organization.
The wide uptake of OKRs comes down to five key benefits, which John Doerr talks of as the F.A.C.T.S.
These break down as follows:
- Focus. When a company sets simple goals that demand results, employees have a clear point of focus. Instead of wondering what the purpose of their efforts is, employees know precisely how they contribute to the organization’s mission. According to the What Matters site, it’s best to have up to three objectives at a time, with around three to five key results per objective. This is a great way to focus on your priorities.
- Alignment. Establishing a list of clear, high-level objectives that need to be achieved gets everyone on the same page throughout the organization. When teams and departments are aligned, they can more effectively work together to accomplish established aims.
- Commitment. If everyone understands the company’s ultimate aspiration and their role in achieving it, they will be more engaged and committed to their work responsibilities. Conversely, a lack of clearly defined objectives can diminish employee engagement and morale.
- Tracking. The OKR framework requires organizations to simultaneously set their intentions and select associated key results. Because of this, businesses can more easily track their goals and measure the efficacy of growth efforts.
- Stretching. When selecting OKR key results, organizations can choose one or two metrics that will act as stretch goals — those that may not be mission-critical but still remain on the company’s radar. However, these key results should be attainable and relevant to the company’s overall mission.
There’s also an additional benefit in agility. OKRs differ from other goal-setting methodologies in that they are not set in stone. Since OKRs typically focus on short-term target windows and broad objectives, they can evolve more nimbly based on the needs of the business.
The OKR formula — defining objectives and key results.
When it comes to defining the approach in simple terms:
- Objectives are the goals that you want to achieve. They should be simple and easy to act on. Establishing a clear objective avoids confusion among team members and allows everyone to be aligned toward a common goal.
- Key results are the metrics you will use to determine whether you’re reaching your objective. Key results must be concrete and measurable, or you won’t be able to accurately determine the amount of progress made toward your goal. For example, let’s say you want to grow your business. Key results could include increasing your revenue to $2 million, releasing a new product, or generating 25,000 new leads within a year.
John Doerr’s formula is a great place to start:
“I will accomplish ‘X’ (objective) as measured by ‘Y’ (key result).”
Using this formula, objectives can be your company goals for the quarter or year. They are measured by key results. These should be clear, ambitious, and inspirational, so that employees at all levels understand the company’s primary goals and get on board.
Once you’ve decided on objectives and key results for a set period — say, annually — you’ll need to start thinking about aligning them to your business. For larger companies, this is naturally a challenge, as different teams have different priorities and ways of working.
This is where ‘cascading OKRs’ come in — the process of breaking down larger, company-wide key results into smaller, team-specific ones. Generally, this will follow a process like this:
- High-level OKRs are briefed to heads of departments, managers, and other employees.
- Individuals take ownership of specific key results and decide the best way to achieve them.
- These key results then become objectives for the level below — and so on, until the task is completed.
To overcome the process being seen as too ‘top down’ or prescriptive, Doerr recommends that employees at all levels write their own key results, to ensure they have input into the process, and ownership of it.
Types of OKRs and their applications.
Broadly speaking, OKRs fall into three fundamental categories — learning, committed, and aspirational — as well as a number of different varieties that affect the way you apply OKRs to a business structure.
Let’s break these down in more detail.
Learning OKRs.
Learning OKRs prioritizes acquiring new knowledge or skills, focusing on experimentation and continuous improvement as opposed to pre-defined targets. They're valuable for exploring new approaches, which can in turn inform future OKRs.
Committed vs. aspirational OKRs.
Committed OKRs represent firm commitments, expected to achieve a passing grade at cycle's end, against a pre-defined metric. Aspirational OKRs meanwhile, sometimes called "stretch goals" or "moonshots," are ambitious targets that push boundaries, even if full attainment isn't guaranteed.
Top-down vs. bottom-up OKRs.
Top-down OKRs involve aligning teams around overarching goals. Conversely, bottom-up OKRs emerge from teams and individuals at a ground level, fostering creativity and ownership while still aligning with the company's overall strategy.
Personal OKRs.
The OKR framework isn't limited to professional settings. Personal OKRs allow individuals to apply the same principles to personal goals, promoting self-improvement and alignment of personal aspirations with professional objectives.
Project based OKRs.
Project-based OKRs align specific project goals with broader organizational objectives. This ensures that individual projects contribute to the overall strategic direction of the company.
Quarterly, annual, or rolling OKRs.
The timeframe for OKRs is flexible, adapting to organizational needs. Quarterly OKRs provide short-term focus, annual OKRs establish long-term direction, and rolling OKRs offer continuous review and adaptation.
Cross-functional OKRs.
Cross-functional OKRs involve multiple departments or teams collaborating toward a shared objective, breaking down silos and fostering inter-departmental alignment and cooperation.
OKR examples.
OKRs will vary from business to business. But here’s a few examples from different industries that might be useful for inspiration on your own OKRs:
Sales team objective: launch a new customer community.
Key results:
- Create a customer community strategy based on best practices.
- Publish 60 articles during the quarter and get more than 6,000 page visits.
- Get 30% of our customers to participate in the community.
Community management objective: make our community known by industry experts and thought leaders.
Key results:
- Reach out to 12 industry experts and thought leaders in Q1.
- Interview them and publish the interview articles on our community site.
- Research and publish an industry report and infographics for the community.
CEO objective: grow our business.
Key results:
- Grow revenue to $3M.
- Launch the new product.
- Reduce churn to <5% annually through customer success.
PR and analyst objective: build strong relationships.
Key results:
- Complete two analyst briefings in Q1.
- Submit analyst report applications.
- Feature two analysts on our webinars.
- Host two analyst calls — provide the new product launch update.
Partner marketing objective: create a community of partners and resellers (MQLs).
Key results:
- Publish five new partner-focused whitepapers by Q1.
- Launch seven webinars to educate our partners.
- Do a five-city Lunch & Learn event for partners.
Top company objective: grow our corporate global business.
Key results:
- Hit company global sales target of $100 Million in sales.
- Achieve 100% year-to-year sales growth in the EMEA geography.
- Increase the company average deal size by 30% (with upsells).
- Reduce churn to less than 5% annually (via customer success).
Demand gen objective: optimize our customer acquisition.
Key results:
- Improve our new marketing automation process.
- Reduce customer acquisition costs by 20% in Q3.
- Build a new top-down and bottom-up Excel model to analyze the ROI.
Find out more about OKR templates.
What is the difference between OKR and KPI?
OKRs and KPIs (key performance indicators) are related to some extent, but there are important differences between them.
- OKRs are an overarching goalsetting framework. As we’ve discussed, they comprise both an objective and key results within them.
- KPIs determine factors required for success in an organization. An example could be “increase sales by 50% by Q2”.
Crucially, KPIs are included within OKRs. By including concrete, actionable metrics, KPIs fit naturally within key results.
How to implement and manage OKRs effectively.
To implement OKRs successfully, you’ll need a commitment to continuous improvement, as well as a structured approach.
Let’s go through each stage step by step — from setting objectives and defining key results, to review, adjustment, and beyond.
Setting effective objectives.
Starting with an impactful, clear objective is the foundation of any good OKR.
Objectives should be:
- Clear and concise. Use straightforward language — avoiding jargon or ambiguity. Everyone in your organization, regardless of role, department, or level of seniority, should be able to understand your OKRs. A confusing, poorly written objective can lead to confusion later.
- Ambitious yet achievable. Your objectives should be challenging enough to push your teams and individuals in your organization to improve. However, they should also be realistic — as overambition can sometimes demotivate teams. The sweet spot is a "stretch goal" that pushes capabilities without being unattainable.
- Aligned with company strategy. Objectives must directly support the overall strategic direction of the company. This ensures that everyone's efforts contribute to the achievement of the organization's long-term vision. Without this alignment, OKRs can become fragmented and ineffective.
- Limited in number. To maintain focus and avoid overwhelming teams, limit the number of objectives per quarter. Three to five objectives are generally recommended, ensuring that resources and attention are concentrated on the most critical priorities.
Three examples of well-written objectives.
- "Increase customer satisfaction by 15%."
- "Launch three new product features based on customer feedback."
- "Expand market share by 10% in the target region."
Defining measurable key results.
Key results (KRs) are the measurable steps that demonstrate progress towards achieving an objective. Effective KRs often follow the SMART formula:
- Specific: Clearly define what needs to be accomplished, leaving no room for ambiguity.
- Measurable: Include quantifiable metrics that allow for objective progress tracking. This could involve numerical targets (e.g. revenue increase, customer acquisition), percentages (e.g. market share growth, customer satisfaction), or completion rates (e.g. project milestones).
- Achievable: While ambitious, KRs should be realistic and attainable within the given timeframe.
- Relevant: Each KR must directly contribute to the achievement of its associated objective.
- Time-bound: Set clear deadlines for each KR, ensuring accountability and providing a framework for progress tracking.
Examples of quantitative and qualitative key results.
- Quantitative: "Increase website traffic by 20%." "Generate $1 million in new revenue." "Reduce customer churn by 5%."
- Qualitative: "Complete a comprehensive market analysis." "Launch a successful marketing campaign." "Improve customer onboarding process."
Each KR should have a clearly designated owner who is responsible for tracking progress and ensuring accountability. This individual will be responsible for updating the KR's progress and reporting on its status.
Establishing a cadence for OKR reviews.
Regular check-ins and progress reviews are essential for maintaining momentum and making necessary adjustments. This involves:
- Frequency: While OKRs are typically set quarterly, regular check-ins (e.g. weekly or bi-weekly) are crucial for monitoring progress, identifying roadblocks, and providing support.
- Effective meetings: Check-in meetings should be focused and efficient, providing opportunities for teams to discuss progress, address challenges, and collaboratively adjust their approach as needed.
- Feedback and adjustment: Regular reviews provide opportunities to incorporate feedback, identify areas for improvement, and make necessary adjustments to the OKRs to ensure they remain relevant and achievable. This iterative approach is key to maximizing the effectiveness of the OKR system.
Throughout the quarter, you must perform check-ins with your staff to keep track of measured progress. It’s important to define your OKRs in accordance with top company priorities, to make sure you are working towards the right goals.
Maintaining visibility, alignment, and progress on your OKRs will be crucial to success. Using a system such as Adobe Workfront will keep your OKRs strategically aligned to work being completed, which accelerates delivery on goals and drives results.
OKRs vs. other goal-setting methodologies.
If you feel that OKRs may not be right for you or your organization, there are many other goal-setting options out there.
OKRs vs. MBOs (Management by Objectives).
The main difference between OKRs and MBOs is scope. OKRs emphasize challenging, aspirational goals, with measurable outcomes that affect the whole business. MBOs, on the other hand, focus on setting and managing more specific goals based on individual performance.
MBOs are also less adaptable to changing circumstances, while OKRs are simple to adapt. Much of this flexibility comes down to cadence — OKRs emphasize quarterly goals and regular check-ins, while MBOs are often annual.
OKRs vs. SMART Goals.
While both OKRs and SMART goals include specific, measurable elements, they each have a different emphasis. OKRs prioritize aspirational, qualitative objectives with measurable key results. This encourages ambition and alignment.
SMART goals, on the other hand, focus on specific, attainable, and trackable goals, without taking such a holistic approach.
OKRs vs. KPIs (key performance indicators).
KPIs are metrics used to track performance against pre-defined targets. While some KPIs can sometimes serve as key results within an OKR framework, the two are not interchangeable.
Primarily, KPIs measure performance and operational efficiency. OKRs are broader and drive strategic change with ambitious outcomes.
OKRs vs. balanced scorecard.
The balanced scorecard provides a broader strategic planning and performance management framework, considering financial, customer, internal process, and learning and growth perspectives. OKRs, while compatible with the balanced scorecard, provide a more focused and actionable approach to goal setting and tracking within a specific timeframe.
The balanced scorecard offers a holistic view of organizational performance, while OKRs focus on achieving specific, measurable objectives.
Common OKR mistakes and how to avoid them.
Here’s a few common pitfalls to avoid when utilizing OKRs.
- Vague or ambiguous language. Avoid using subjective terms or unclear phrasing. Quantifiable and measurable goals are crucial for tracking progress.
- Unrealistic expectations. Setting excessively ambitious goals can lead to demotivation and ultimately hinder progress.
- “Sandbagging.” By contrast, this is when teams under-promise and overdeliver to avoid pressure. However, this can lead to issues with capacity planning, and a lack of ambition.
- Lack of alignment. Objectives that don't align with the overall company strategy will lead to wasted effort and a lack of focus.
- Too many objectives. Trying to manage too many objectives simultaneously can lead to a lack of focus and dilute the impact of the OKR system.
- Lack of reviews. Losing track of objectives and key results means you’ll slip up on your targets for the year. Regular check-ins are essential.
Getting started with OKRs.
When used effectively, the OKR system can enable more effective, efficient, and high-performance business operations — creating clarity and accountability for everyone in the company.
Adobe Workfront has all the tools and resources you need for effective creation and tracking of OKRs. Find out more today and get started with your organization.
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