WARNING: This blog post contains some of the most practical content you can get anywhere on OKRs. If you read it, you might NOT even want help from an OKRs coach. This blog contains content taken directly from an OKRs handout that I use in my coaching engagements. If you are setting team-level OKRs, this blog is a must read.
As you can tell, this “warning” is directed at me, the “OKRs coach.” So, why would a guy like me share information like this via a free blog post with anyone willing to read it over? Answer: I know your time is valuable. So, in exchange for my opening the kimono, please post a comment letting me know if you leverage the approach outlined below with your organization. I include sample questions to ask along the way at each step. Do not feel beholden to follow the 7 steps in order. Often, we find that we can only polish our objective once we completely define a set of KRs, for example.
The first two steps set the stage for drafting OKRs. While these two steps are not technically part of “defining OKRs,” they help set a context in which to develop your team-level OKRs.
STEP 1: Agree on your Mission.
Take a fresh look at your team’s mission about once a year; involve the entire team. If you are leading a team, allocate about an hour each year for a group exercise. Ask each member of the team to take two minutes to write down what they feel is the team’s mission. Then have each person share it with their neighbor and ask each group of two to present their best mission sentence. Be sure to capture the keywords that resonate with the team as they emerge. This one hour may just be the most efficient time you spend with your team. Your team’s mission serves as a minimal viable strategic context for your team-level OKRs. While the short-term cycle inherent in OKRs can be a great thing, teams without a longer-term strategic context may fail with OKRs. Their OKRs cannot align to their longer-term strategy without something as simple as a mission statement in place. For more on missions, please see my earlier post, OKRs with a Mission.
Questions to ask:
- Who do we serve? Why do we exist? What is the long-term impact our team makes?
- In one sentence, how would you describe your team’s purpose?
- If you met a new employee in the elevator, how would you describe what your team does in a single sentence?
STEP 2 – Think about Alignment.
Most OKRs do not exist entirely within any one team. Amazing outcomes tend not to be the result of a single person or team; amazing outcomes most often require collabration and cross functional alignment with key players outside your team. Your organization must agree on how best to define a “team” for the purposes of creating team-level OKRs. Some organizations such as eBay Classifieds Group define OKRs as cross-functional squads. Others merge teams like Product and Engineering into a single “team” when setting OKRs even though the Product and Engineering departments each have their own VPs. However, the default approach is to simply define team-level OKRs that directly reflect the Org Chart. In other words, many organizations use their reporting structure to determine which teams will set OKRs. Then, these same organizations wonder why the OKRs process is failing to increase cross-team alignment.
Regardless of which approach you take, I recommend your team takes 5-10 minutes as part of each OKRs cycle to proactively agree on any near-term dependencies outside your team before setting team-level OKRs. In some cases you may even want to define a shared OKR with another team. If nothing else, at least identify a dependent KR to co-own with a colleauge from that dependent team. Pleas refer to the 2016 OKRs book I co-authored for more on how to use shared OKRs and dependent KRs.
Questions to ask:
- What teams do your objectives overlap with?
- Which teams do you collaborate with most often?
- Which teams depend on you?
- Is there a particular team where there’s a strong dependency in the near term? If so, should we consider creating a shared OKR for the upcoming cycle?
STEP 3 – Develop Objectives.
Now your team is ready to start drafting OKRs! Let’s begin with Objectives. After all, we’re doing “Objectives and Key Results!” However, keep in mind that some of my clients actually start with Key Results and then cluster the most important ones to focus on into themes in order to discover their Objectives.
Questions to ask:
- Q: What is the single most important area to focus our effort on making measurable progress for the upcoming OKRs period? Why?
- Q: What are the key objectives you need to focus on to move toward your mission?
- Q: Do you want an objective to address how you collaborate with a specific team?
- Example Sales Support: Provide technical support to sales team
- Team lead should develop objectives in general and include 1-2 Key Results to ensure the Objective is partially defined. Team members develop Key Results and set specific targets.
- Begin with a strong action verb like “Develop, Enable, Provide, etc.”
- If you are struggling to define objectives, revisit your team’s mission.
- Add an “Objective Description” that answers the question, “Why is this Objective so important NOW?” in 2-4 sentences.
- Make the Description emotional. Use this as the motivation to inspire the team. Mention the possibilty of losing market share to a competitor or whatever gets your team fired up.
STEP 4 – Draft Key Results.
Most of the time spent developing OKRs is allocated for drafting and refining your team’s Key Results. Objectives tend to be fairly easy to develop. Key Results tend to be easy to brainstorm, but quite difficult to finalize as precise, measurable statements.
Questions to ask:
- Fundamental Key Result Question: At the end of the period, how will we know “the objective” will be achieved?
- Do the drafted KRs reflect the Objective? If not, consider modifying the Objective or moving the KR to a different Objective.
- What metric can we point to that lets us know we need to make improvements in this area?
- Imagine it’s the end of the OKRs period… what would AMAZING look like? How would we know we’d achieved something truly amazing?
STEP 5 – Convert Tasks to Key Rey Results.
When first describing Key Results for an Objective, one often produces a list of tasks. This is quite natural and reflects the way our brains work. Coming up with a to-do list is perfectly fine, but remember, Key Results are not tasks. Your team will need to convert these tasks into Key Results or simply remove the task from the list of potential Key Results altogether. Here are sample questions you can ask to convert tasks into Key Results.
Questions to ask:
- Fundamental Task-to-Key Result Question: What is the intended outcome of task X?
- If you complete task X, will that mean we’ve achieved the Objective?
- Is it possible that task X is completed, but it does not help achieve the Objective?
- What is the best possible outcome you can imagine that could result from completing task X?
STEP 6 – Challenge a set of Key Results.
Key Results need to work together. If your Objective has 3 KRs that all are highly correlated, you might find the set of KRs as a whole to be redundant. With OKRs, less is more! It’s OK to have a couple of Key Results that overlap a bit, but probably not a good thing if all the KRs for a given Objective are highly correlated. Teams that use OKRs effectively often have a KR that reflects quantity and another that captures quality. For example, you might set up a quantity KR like “Increase subscribers on iOS from 100 to 200 by end of Quarter” and a quality KR like “Increase 30-day active users from 400 to 600 by end of Quarter.”
Questions to ask:
- Imagine we complete the period and all your Key Results are achieved, does this mean the objective is achieved? Is there something missing? (To ensure we have enough Key Results)
- How can we reduce the number of Key Results? If we achieve Key Result 1, does that mean we’ve also achieved Key Result 2? (To reduce and focus Key Results)
- Do we have a balance of KRs that measure quantity as well as quality?
STEP 7 – Refine Key Results. Finalize Team-Level OKRs.
In many cases, Key Results can be improved. Use the characteristics of effective key results to generate questions. If a Key Result does not at least “partially meet” all these criteria, I argue that it is not a Key Result. Here are the criteria for creating Key Results that will make your Team-Level OKRs effective:
- “Key” not “all” – Is the key result just “business as usual” or is it a “key” result
- Specific – Using specific language improves communication and avoids ambiguity
- Measurable – Progress should not be subject to opinion
- Results not tasks – Key results are results/outcomes, not tasks
- Clear – Use High School English with only standard acronyms
- Aspirational – You achieve more when you set the bar high
- Scored – Use 0-1 scores to clearly communicate targets, manage expectations
- Owned – All KRs have an owner who agrees to update progress and ensure the KR does not slip through the cracks
Examples of questions based on these characteristics:
- Specific/Measurable: What is the baseline? Rather than writing the KR as “Increase metric A to Y,” let’s write it as “Increase metric A from X to Y”
- Results not tasks: What is the intended outcome of running 5 pilot email campaigns?
- Clear: What does “NPS” stand for? Write it out as “Net Promoter Score”
- Scoring: What does AMAZING looks like? (10-20%) What is a target level of progress that is realistic (50% likely) What is the level of progress that we can commit to. It should be controllable and we should feel like we failed if we don’t achieve it?
Try out these 7 steps as a structured approach for setting team-level OKRs and let me know how it goes. Please post a comment and get the discussion going or send me a note offline via Ben@OKRs.com!