OKR Best Practices – Everything You Need to Know

What are OKRs?

What does OKR stand for? OKRs = Objectives and Key Results, it’s a popular management framework that is used to set goals in an organization. The sole purpose is to align the company's strategic goals to team goals in order to create a unified direction of success. While Objectives are ambitious & sometimes visionary goals, Key Results, on the other hand, are numeric and have to be measurable. Aligning and linking your efforts is critical, so it’s a best practice to use hierarchical OKRs. The system is completely transparent, so everybody has the chance to see what their colleagues are doing.

OKRs are used by: Google, LinkedIn, Spotify, Twitter, Sears. Yahoo etc. So the list of references is quite good.

What Are OKRs? Learn the Basics of Objectives and Key Results Methodology

The benefits of OKRs

So what are the benefits of using this methodology?

It’s easy to lose focus, especially for employees that don’t have constant supervision & when the company lacks clear direction. OKRs give a great chance for every person to have a say about how they contribute to the company's bigger picture. When visualized, it’s easy to see how it all connects together. From small day-to-day tasks to big, quarterly/yearly projects. Using OKR software gives a great chance to completely transform your organizational processes for the better.

OKR best practices for setting Objectives

So what are the best practices for setting Objectives (quarterly goals)?

Objectives are the visionary goals that you want to accomplish. Don’t try to make them into KPIs (OKRs are not KPIs). Think of the big and important stuff. As a team leader, you’ll have to figure out what needs to be done first, aligning comes after.

So let’s have a look at some good Company Objectives:

  1. Increase recurring revenues
  2. Finish raising new capital for our growth needs
  3. Research and improve customer satisfaction

As you can see, the Objectives are qualitative. Also, they are time-bound by default, because OKRs are set for a quarter. Just keep in mind that Objectives have to:

  • Help achieve company long term goals
  • Inspire for growth
  • Be achievable within a quarter
  • Should be ambitions and are not easily achievable

Best practices for setting Key Results

So what are Key Results and what are the OKR best practices for using them?

Key Results are the measurable glue, that holds together the company’s performance. Organizational strategy & visions can be blurry and vague when done wrong. When leaders communicate solely that they want to rule the world; it could end up with more confusion than answers. As for Key Results, there is no gray area on how to set & achieve them.

Under each Objective, link 3-5 Key Results. They have to be quantifiable, achievable, and gradable. For the majority of cases, Key Results are based on growth, performance, or engagement. Key Results should usually be set as numeric values.

So let’s have a look at some good Key Results for the Objectives that we set earlier:

  1. Increase recurring revenues
    1. Reach monthly recurring revenue ($ MRR) of $250000
    2. Increase the share of monthly subscriptions vs one-time contracts sold to 85%
    3. Increase average subscription size to at least $295 per month
    4. Increase annual renewals to 75%
  2. Finish raising new capital for our growth needs
    1. Get at least 30-second contact meetings or conference calls
    2. Solicit at least 3 term sheets of our minimum required terms
  3. Research and improve customer satisfaction
    1. Exceed Net Promoter Score (NPS) of over 8.0
    2. Get 1000 survey responses to the annual satisfaction survey
    3. Conduct 50 phone interviews with top customers
    4. Conduct 15 phone interviews with recently churned customers

Here is a quick overview of the best practices for setting Key Results:

  • 0-100% progress
  • Any % value or x% to y% change
  • Euros, dollars
  • 1-5 or 1-10 grade rating

Here’s a quick recap on how to Set Good OKRs with Examples

How to Set Good OKRs With Examples

OKR alignment best practices

So how can you make sure that everybody is headed in the right direction?

From a methodological standpoint, the biggest debate areas are whether to start from bottom-up or top-down goal alignment. Both strategies are widely used and can be beneficial. In that sense, there are no right or wrong answers.

Whichever way you decided to start, it’s critically important to start linking objectives as soon as possible. Start with the ones that are company-wide – meaning that everything that runs between different divisions. These are the ones that usually need the most coordination. The easiest way is to use the Weekdone Hierarchical OKR Tree.

After aligning Team Objectives, make sure that team leaders know, agree, and act upon the Objectives. Make sure every employee creates at least 3-5 Key Results per Objectives.

OKR software best practices

The sole purpose of various OKR software options is to better your companies internal communication and help everybody on the same path. The way to start using Weekdone effectively from day one is to list your weekly goals, accomplishments, and challenges, so that you know exactly, what your focus for the week is.

Weekdone uses PPP methodology for weekly planning. Your weekly tasks are now visible to the manager, who can align team goals with the work you’re doing. It’s his/ her job to make sure that the team goals are aligned to the company ones.

As everybody in your team works on their Objectives and Key Results, there will be a discussion between what the Team Objectives should be. This is also known as the bottom-up approach to OKRs. So this makes sure that employees are engaged & passionate about the work that they are doing. Not just blindly following orders. Also, the weekly planning section helps everybody to plan important chunks into a daily routine – so you can focus on the important stuff.