How to Set and Use OKRs

While it is easy to find the definition of OKR, it is also important to know how to implement it in a company or a team. So, I’ll try to put it in a step-by-step way on how to set and use OKRs.

How to Set and Use OKRs (Objectives and Key Results)

Setting OKRs (Objectives and Key Results) can transform how teams and organizations set and achieve goals. It’s a simple yet powerful framework designed to align teams toward common goals, measure progress effectively, and inspire high performance. Let’s break down how to OKR—from defining clear objectives to tracking progress and ensuring success.

1. Understand the OKR Framework

Before diving into creating OKRs, it’s important to understand the structure and purpose behind them:

Objective: A clear, qualitative, and inspirational goal you want to achieve. The objective should be something that motivates the team, is aligned with larger company goals, and provides a clear sense of direction.
- Example: "Improve user satisfaction with our mobile app."
Key Results: These are the specific, measurable outcomes that show whether the objective is being achieved. They should be quantifiable and trackable.
- Example: "Increase user satisfaction score from 75% to 90%."

The structure is simple:

Objective: What do we want to achieve?
Key Results: How will we know if we’re making progress?

2. Define the Objective

The Objective is the motivational statement that sets the direction. A good objective should be:

Inspirational: It should push the team to achieve something impactful.
Clear: Anyone should be able to read and understand what the objective means.
Action-Oriented: It should drive the team toward a specific outcome.

Tips for writing good Objectives:

Keep it broad, but not vague. It should express what you want to change or improve.
Make it ambitious enough to inspire, but achievable within the given time frame (usually quarterly).

Examples of strong objectives:

"Become the top choice for mobile app users in our industry."
"Enhance product usability to delight our customers."

3. Set Measurable Key Results

Key Results are the quantitative measures that indicate how well you are progressing toward your objective. A good Key Result should:

Be specific and measurable.
Represent an outcome, not an action. Avoid phrasing Key Results as tasks (like "launch a new feature"). Instead, focus on the impact of those actions (e.g., "Increase user retention by 15% after launching the new feature").
Typically, you’ll have 3-5 Key Results per objective to ensure focus.

Tips for writing good Key Results:

Use metrics that make sense for your objective. These could be revenue targets, engagement metrics, satisfaction scores, or any other quantifiable data.
Make sure the Key Results are ambitious but achievable.

Examples of strong Key Results:

Increase mobile app user retention rate by 20%.
Reduce the average customer support response time to under 2 hours.
Increase app downloads by 15% by the end of the quarter.

4. Align OKRs Across the Organization

One of the key advantages of OKRs is their ability to align individual, team, and organizational goals. This requires a top-down and bottom-up approach:

Top-Down Alignment: Start by setting company-wide OKRs. These high-level goals will provide direction for the rest of the organization. Once these are in place, departments and teams should set their own OKRs that support the company’s goals.

Example of a company-level OKR:
- Objective: Expand into new markets.
- Key Results:
  - Increase sales in European markets by 30%.
  - Launch a new localized version of the product for German-speaking users.
Bottom-Up Alignment: Teams and individuals then set their own OKRs that contribute to these higher-level goals. This ensures that everyone’s efforts are aligned with the company’s direction.

Example of a team-level OKR supporting the company objective:
- Objective: Localize the product for the Swedish market.
- Key Results:
  - Translate 100% of product content into Swedish by the end of Q2.
  - Achieve 50,000 downloads of the localized version by the end of Q3.

Alignment ensures that everyone is working toward the same overall objectives, but with goals that are relevant to their work.

5. Set a Time Frame

Typically, OKRs are set for a quarter (3 months), but they can also be set for 6 months or annual periods depending on the organization's needs. A quarterly time frame is ideal because it allows for frequent reflection, adjustment, and a sense of urgency without overwhelming the team.

Example of a time-bound OKR:

Objective: Improve mobile app performance.
- Key Result 1: Decrease app loading time by 50% by the end of Q2.
- Key Result 2: Achieve a 4.5-star rating on the app store by the end of Q2.

6. Track Progress Regularly

OKRs are not meant to be "set and forget." You should regularly check in on OKR progress throughout the quarter. This can be done through weekly or bi-weekly meetings where the team reviews progress toward Key Results and adjusts efforts if necessary.

Weekly Check-Ins: These can be brief updates where each team member or team lead reports on progress toward their Key Results.
Scoring OKRs: At the end of the quarter, you can score each Key Result on a scale from 0.0 to 1.0, where:
- 1.0 means the Key Result was fully achieved.
- 0.7 indicates good progress but not complete.
- 0.3 or below suggests little or no progress.

Example of OKR progress tracking:

Key Result: Increase sales by 30%.
- Week 1: On track with 5% growth.
- Week 5: Facing challenges with new customer acquisition, may need to adjust strategies.
- Week 8: Achieved 20% growth, focusing efforts to hit the remaining 10% by the end of the quarter.

7. Reflect and Adjust

At the end of the OKR cycle (typically at the end of the quarter), it’s important to review and reflect on your OKRs:

Did we achieve the objectives?
What worked well, and what didn’t?
What can we improve next quarter?

After reflecting, teams can adjust their OKRs for the next quarter based on lessons learned. This helps foster a culture of continuous improvement.

Best Practices for Setting and Using OKRs

Keep It Simple: Focus on a few high-impact OKRs rather than trying to do too much at once. A handful of well-defined OKRs is better than a long list of scattered goals.
Be Ambitious but Realistic: Set stretch goals to motivate the team, but ensure they are still achievable. Aiming for 70-80% completion is ideal.
Make It Transparent: OKRs should be visible to the whole organization, allowing everyone to understand how their work ties into broader company goals.
Involve the Team: OKRs should not be dictated top-down. Teams should have input into their own OKRs so that they feel ownership and are motivated to achieve them.
Iterate and Improve: OKR-setting improves over time. Don’t expect to get it perfect in the first cycle. Use feedback and reflection to fine-tune the process in future cycles.

TLDR;

Setting and using OKRs is an effective way to align teams, drive focus, and measure progress toward ambitious goals. By following the steps to define clear objectives, measurable key results, and regularly tracking progress, Agile teams can ensure they stay on track and deliver meaningful results. With time and practice, OKRs can become a powerful tool for organizational growth, team alignment, and continuous improvement.

How to OKR?