What Are OKRs and How to Set Them Correctly? [+ Best Practices]

Objectives and Key Results are principles that define unifying goals within the company and the ways to get there. OKRs are a preferred framework for goal setting for a lot of modern companies because they unite two essential methods of gathering information to make informed decisions concerning company goals: qualitative and quantitative data gathering.

Part 1

What Are Objectives and Key Results (OKRs)?

  • Objectives: A Qualitative Approach

This part of the OKR is meant to inspire and motivate employees. It adds a sense of meaning for those who are not necessarily impressed by just “hitting the numbers.”

To be effective, they should be doable within one to three months to continue to inspire employees that goal-reaching is not only possible but something they can regularly do within their departments. These should not utilize number or percentages. According to a 2013 brain study, nearly 29 percent of Americans are strictly right-brained, while 33 percent have an equal influence from both sides of the brain. This is who objectives are created for.

  • Key Results: For Those Who Thrive on Data

The other 37 percent of people represented by the study mentioned above digest information the objectives are broadly trying to convey through this method.

Key results take the words of objectives and turn them into quantitative measurements that are easily digestible. Many times, these are referred to as “Metrics.”

Key results can measure growth, sales, consumer engagement, performance, and quality. They should be challenging, but not impossible. Where a department is currently performing should inform the starting point, and the crucial final result should take into account where leaders would like to see the unit go.

Part 2

Why Are OKRs a Preferred Method by Many Current Companies?

OKRs were initially developed by the Intel Corporation. They are now used by some of the largest tech behemoths such as LinkedIn, Zynga, and General Assembly. However, there is one corporation that has taken the idea of OKRs and run with them, and that is Google. In the early years of Google’s existence, an investor named John Doerr made a presentation urging the company to embrace this concept. Google jumped on board, and the rest is history. Here are four significant reasons Google has utilized the idea of OKRs:

  1. They have helped employees see their progress in accomplishing departmental goals.
    Rick Klau, a Google Ventures partner, described his ease at monitoring OKRs he and his team set for revamping the YouTube homepage.
    This not only helped the team keep track of how close or far they were from the goal, but he was also able to quantify his accomplishments during performance reviews easily.
  2. The OKR Framework can be used at all hierarchal levels of the company.
    Google has OKRs at an overall organization, team, managerial, and personal level.
    Since all parts of the company measure goals and their results with the same method, it is easy for all levels and departments to understand and communicate information concerning it.
  3. They help companies determine how proficient they are in goal setting.
    The OKR framework allows departments and business leaders hone the essential skill of setting OKRs in the.
    Google uses a 0 to 1 method to rate abilities to meet goals. If someone is regularly getting a 1.0, the insinuation is that the goal is not challenging enough. If they are getting below a 0.5, then it may be worth it to assess if the OKR is too far-reaching.
  4. It is a simple way to ensure things get done.
    First and foremost, companies large and small use this method to have a way to make sure things get done efficiently and effectively.
    OKRs take lofty goals and complex data and break it down into something that all employees can easily understand and strive for. It is a goal standardization tactic that not only addresses concerns about essential metrics but can help start the conversation about how to get there.
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Part 3

OKRs, The Secret to Increasing Employee Engagement?

There have been two recent studies that have revealed some interesting data about employee engagement and their interaction and understanding of company goals.

A study by researchers at the University of Technology in Sydney asked employees from 20 of Australia’s top performing companies to select their employer’s strategy from six choices. Only 29 percent were able to guess the strategy correctly.

In 2016, Gallup conducted a study that found that only 32 percent of employees within the United States was engaged. The number dropped to 13 percent when worldwide data was included. Can OKRs make company strategy clearer for employees while also increasing engagement?

Another Gallup poll showed the impact of managers setting actionable goals with employees; 69 percent of employees who reported feeling engaged at their place of employment worked with their managers to set performance goals. This reveals that there is a connection between goal setting and employee engagement. Sharp attention to both can increase departmental and company productivity. Therefore, this statistic should be on the radar of all business leaders and managers.

Part 4

How Can Business Leaders Set Actionable OKRs?

Setting OKRs seems like a straightforward process, but there are some nuances that can make establishing these goals complex. An employee at Google, a company with a lot of interactions with OKRs, developed a comprehensive tutorial and template for OKRs. Their method can help managers and business get started with developing actionable objectives and key results.

  • Step 1

    Introduce OKRs to your Department or Organization


    If this is a concept that is new to a department, then interested business leaders should adequately introduce this process to teams. They should address the importance of OKRs, how they work, and answer any questions concerning their effectiveness.

  • Step 2

    Establish Measurable Objectives


    Everyone in the team should participate in this part of the process. These can be overall departmental or personal goals for each person. They should represent “stretch goals,” that are challenging but not impossible to reach. This involves some thoughtful pre-planning strategies that locate crucial problem areas.
    Those with experience with OKRs suggest creating four to six objectives.
    Examples of objectives:


    1. Improve question matching technology
    2. Increase customer satisfaction with the new system rollout

  • Step 3

    Create Key Results for Each Objective
    For each objective, leaders and employees should produce two to four key results.
    Most of these should be quantifiable and inform leaders and employees on how they can address and meet the objective. Those looking to achieve these goals should establish confidence levels. They can be 0 to 1 like Google’s or utilize another numerical scale. This can help with deciding how confident leaders and employees are with meeting the goal. If the level is somewhere around 0.5 or 0.6, it shows that it is a stretch goal balancing difficulty and ease.


    Examples of key results:


    1. 40 percent of users will successfully navigate through the question matching system
    2. The new software system evaluations will see a 30 percent increase of “very satisfactory” ratings

  • Step 4

    Scoring Objectives
    Each objective should be scored based on the confidence of meeting it at the end of the designated month or quarterly deadline. This can depend on the overall rating system of 0 to 1 or 0 to 10. It is also not a bad idea to establish a mid-point scoring benchmark. This will help keep individuals and teams on track to see if they are on their way to meeting the ultimate goal. If someone is incredibly far away from their mid-point OKR, then they can better plan for the rest of the month or quarter.

  • Step 5

    Post-OKR Meeting
    Regardless of whether benchmarks were met, it is essential for employees to sit down with managers for individual OKRs or teams to meet to discuss departmental metrics.
    Depending on the outcome, those involved can consider the methods used to reach the OKR and why they were or were not met.


    It will provide an insightful perspective on strategies that can better help groups meet these OKRs in the future.

Part 5

Best Practices for the OKR Process

A good OKR system can take a company or department from average to excellent. These best practices could enhance that process and help guide OKRs to another level.

  1. Carefully communicate Stretch Goals

    If executives or leaders are developing stretch goals for the company, then they should be careful about how they relate these goals to employees. Meeting these challenging goals can initially create stress and frustration for those tasked with them, so it is important that leaders are clear about how many of them they are expected to meet. This should be a reasonable number that employees feel driven to achieve. Meeting stretch goals should be marketed as helpful for fulfilling the company mission and vision.

  2. OKRs Should Show Their Value

    Employees and teams should see the value in established OKRs. It should be something that directly benefits them and their performance and meets overall company goals. If these goals are met, they will make processes more manageable and will bring value to the work a department or individual employee does.

  3. Make OKRs a Routine Part of the Work Week

    The worst thing leaders can do is create objectives and key results and fail to discuss their progress regularly. By consistently mentioning these goals and aligning them with overall strategies then employees will make these a priority and continuously recognize their importance. It is a great idea to incorporate OKRs into weekly meetings and make time to discuss the likelihood of meeting specific benchmarks.

There is a reason why companies are adopting this method of goal setting: OKRs allow all hierarchies of a company to align their goals and set priorities for meeting them. However, for OKRs to indeed be useful, businesses have to employ processes for consistent communication so everyone can stay updated on OKR progress.