These days, we seem to be bombarded with data everywhere we look. It can be hard to know what to do with it and how to measure its impact. In a previous post, we discussed using operational and financial data to develop Key Performance Indicators (KPIs) to serve as an operational dashboard for your organization. In this post, we want to introduce a concept that will allow you to use data to track progress made toward large-scale organizational goals.
Introducing…OKRs! (more acronyms – sorry)
Objectives and Key Results (OKRs) is a goal-setting framework that aims to bridge the gap between performance and future goals. OKRs consist of ambitious, qualitative Objectives paired with specific, measurable Key Results. Unlike KPIs, which are ongoing measurements, OKRs are typically set and evaluated quarterly, encouraging regular reflection and adjustment. Said differently, KPIs are focused on trees, and OKRs are focused on the health of the forest ecosystem. This approach helps organizations align efforts, foster transparency, and push for continuous improvement. While KPIs tell you where you have been, OKRs help chart the course for where you want to go and help ensure alignment across the team.
The key components of an OKR are as follows:
- Objectives: These are qualitative, inspirational, and time-bound goals. They describe what you want to achieve and should be short, motivating, and easy to memorize.
- Key Results: These quantitative metrics measure progress towards the objective. Typically, an objective has 3-5 key results.
Consider the following characteristics when designing your OKRs:
- Set quarterly or annually
- They should be ambitious and slightly out of reach
- Transparent and visible to the entire organization
- Not tied directly to compensation or performance reviews
- Scored on a scale (typically 0-1 or 0-100%) at the end of the cycle
- Provide the opportunity for honest assessment at the end of the cycle
How About Some Examples
OKRs should be developed to reflect your organization’s culture and goals. Here are some examples to help you see the connection between Objectives and Key Results.
| Software Company: Objective: Launch our new mobile app to disrupt the market. Key Results: – Achieve 100,000 app downloads in the first month – Maintain a 4.5-star rating on app stores – Reach a daily active user count of 50,000 | Accounting Team Objective: Streamline the month-end close process Key Results: – Reduce month-end close time from 10 days to 5 days – Implement automated reconciliation for 80% of high-volume accounts – Achieve zero post-close adjustments for two consecutive months |
| Sales Team Objective: Dramatically improve our customer acquisition process Key Results: – Increase lead-to-customer conversion rate from 10% to 15% – Reduce the average sales cycle from 45 days to 30 days – Implement and train team on new CRM (Client Relationship Management) system with 100% adoption | Marketing Department Objective: Establish our brand as a thought leader in the industry Key Results: – Publish 12 high-quality blog posts that generate at least 5,000 views each – Secure speaking engagements at 3 major industry conferences – Increase social media engagement rate by 25% across all platforms |
| Human Resources Objective: Create a more diverse and inclusive workplace Key Results: – Increase representation of underrepresented groups in leadership positions by 20% – Achieve a 90% completion rate for unconscious bias training among all employees – Improve employee satisfaction scores related to inclusion by 15 points | Product Team Objective: Significantly enhance the user experience of our core product Key Results: – Reduce customer-reported bugs by 50% – Improve app load time by 30% – Increase Net Promoter Score (NPS) from 30 to 50 |
In future posts, we will continue to explore how you can implement OKRs within your organization. However, if you think implementing a system of KPIs and/or OKRs into your organizations would be beneficial and would like to brainstorm what that looks like, please contact Justin Hubbard.
