What Are OKRs?

Any organization is only as successful as its focus. For many, simply setting goals isn’t enough; an effective system is needed to ensure that every team and individual is rowing in the same direction. This is where Objectives and Key Results (OKRs) come in. OKRs are a powerful, simple framework for setting and achieving ambitious goals. As many as 54% of organizations see a measurable impact from OKRs within three months of instituting the framework. Let’s take a closer look at how OKRs help organizations connect strategy to execution.

How Do OKRs Work?

At its core, the OKR framework answers two fundamental questions:

1. Where do I want to go? (The Objective)
2. How will I know I’m getting there? (The Key Results)

An OKR is typically written as a simple, declarative statement: I will [Objective] as measured by [Key Results]. An effective OKR always consists of a clear Objective and usually three to five Key Results.

Objective

The Objective is what you want to achieve. It should be:

• Qualitative and inspirational: It should motivate and engage the team
• Time-Bound: Typically set quarterly or annually.
• Ambitious: A good Objective should feel slightly uncomfortable or difficult.

An example may be: “Create a seamless onboarding experience for new users.”

Key Result

The Key Results are how you measure progress toward the Objective. They should be:

• Quantitative and measurable: Must contain a number, such as a metric, a percentage, or a count. This helps make the goal Specific, Measurable, Achievable, Relevant, and Time-Bound.
• Impact-focused: KRs measure the result of work, not the work itself.
• Verifiable: At the end of the period, there should be no debate over whether the KR was met.

Example Key Results for the Objective above include:

• Increase user activation rate (completing key setup steps) from 40% to 75%.
• Reduce customer support tickets related to setup by 50%.
• Achieve an average Net Promoter Score (NPS) for new users of +40.

These examples keep the OKR framework a SMART goal.

The OKR Framework in Practice

OKRs are often confused with other goal-setting methods, like Management by Objectives or simple to-do lists. The fundamental difference lies in ambition and transparency. OKRs should “cascade” from the company level down to individual levels, so that everyone in the organization is aware of the corporate OKRs and aligns their own goals accordingly. In a healthy OKR system, goals are public for the entire organization. This helps everyone be vertically and horizontally aligned.

OKRs emphasize setting aspirational or “stretch” goals. A Key Result should be challenging enough that achieving a 100% completion score is rare. A common principle in OKR methodology is that a successful score is 60% to 70%. If you consistently achieve 100% of your OKRs, you’re not setting them ambitiously enough. This philosophy helps push teams outside of their comfort zones and encourages innovation.

Key Principles for Effective OKRs

To ensure your organization benefits fully from the framework, follow these principles:

• Focus your Objectives: Limit Objectives to 3-5 per period. Over-committing leads to under-delivery.
• Separate OKRs from compensation: Don’t tie OKR performance directly to bonuses or performance reviews. You want to encourage people to be ambitious, and if they’re concerned that failure will come with a financial penalty, they’re less likely to take risks.
• Use a mix of top-down and bottom-up: While company objectives are set by leadership (top-down), at least half of the departmental and individual Key Results should come from teams themselves (bottom-up) to ensure buy-in and ownership.
• Check in regularly: OKRs are not set once and forgotten. Teams should hold weekly “check-ins” to review progress, identify roadblocks, and adjust their tactics while keeping the Key Results constant.

Keeping these considerations in mind will help you execute a successful OKR framework.