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Best Practices Of OKR Goals

(and OKR Goals 2.0)

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Actionable & Correct Definitions

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3 Tactical Insights

Why OKRs?

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Why OKRs?

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Why OKR is the Most Effective Goals System• Improves on Management by Objectives (MBOs) and S.M.A.R.T. Goals

­Allows to break up goals and objectives into smaller steps (KRs)­Cascade alignment - connect your organization to the key objectives ­ Set quarterly, not annually, and progress measured in 12 check-ins­Collective organizational wisdom - 70% Bottoms-Up Alignment­ Transparency and accountability

• The modern organizational goals framework used by top companies:

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•Amazon

•Anheuser-Busch

•Accenture

•Adobe

•Box

•CareerBuilder

•Dell

•Deloitte

•Department of the Navy

•Dropbox

•Edmunds.com

•Twitter

•Gap

•GE

•Google

•GoPro

•Intel

•LinkedIn

•Microsoft

•Moz

•Netflix

•Oracle

•Panasonic

•Schneider Electric

•Sears

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Popularity of OKRs

VIDEOGoogle’s OKR management has 250,000+ views!

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Correct Definitions

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OKR Definitions• Objectives (Os)

­ It is what you want to achieve­ Quarterly (but for junior individual contributors can be monthly)­ Must be measurable with one or a few KRs­ Can be Operational or Aspirational­ Must be able to pass/cascade down or across for alignment

• Key Results (KRs)­ It is how you will know whether you are achieving your objective­ It is the metric which measures the Objective (Complete/Incomplete is measurable)­ If it’s not a metric then the KR is a Milestone (date when the Objective is due)

• Tactics­ KRs inform the “What” while Tactics inform the “How”­ Should be planned for each Key Result

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I will {Objective}

as measured by {Key Results}

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Cadence: Annual Goals > Quarterly Objectives > KRs2016

Annual Goal 1

Q1

Q1 Objective 1

KR1

Tactic 1 Tactic 2

Tasks 1,2,3,4,5 Tasks 1,2,3,4,5

Tasks 1,2,3,4,5 Tasks 1,2,3,4,5

KR2 KR3

Q1 Objective 2 Q1 Objective 3

Q2 Q3 Q4

2016 Annual Goal 22016

Annual Goal 32016 Annual Goal 4

Q1 Objectives (the “Where”)

Q1 KRs (the “What”)

KR1 Tactics (the “How”)

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But setting OKR goals is not enough to achieve success in execution,

performance and results!

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The MOST CRITICAL success factor that connects goals to results:

Weekly Progress Check-inswith Closed-Loop Feedback

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Regular Weekly Check-Ins & Feedback Loop• Review and check-ins must be done weekly to achieve OKR progress

­Don’t just fall into the trap of “set and forget” which is a big mistake­ There are 12 weeks in each quarter but there is an initial grace period 2 weeks­ The rest is a 10% step - a lot happens during such cycle towards a quarterly goal­Must track and review OKR status - oversee progress or course-correction

• High-performance organizations have a weekly status/progress report that is reviewed by each manager or DRI (Directly Responsible Individual)­ In each weekly report, a worker updates the status of her/his progress made

towards the goals­Be proactive and intentional about praise on progress or work collaboratively to

course-correct (use a carrot, not a stick: 80% praise : reprimand)

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What is OKRs 2.0 ?

Combines the power of OKRs with Regular, Continuous Feedback:

OKR Goals Management combined+

Weekly Progress Check-ins (Closed-Loop Feedback)+

Employee Engagement Metrics

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Tactical Insights

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Accountability & Responsibility• Without responsibility, there is no accountability• Always have only one DRI (Directly Responsible Individual) for

any OKR and for each KR within an Objective if it will be cascaded down• An “owner” of an OKR is not necessarily the group manager – a

DRI just serves as a traffic cop (like a Project Manager, aka Scrum Master), not necessarily department head with any direct reports• Also important for owning the “retrospectives” - the DRI /

Owner is the one who is responsible for summarizing the learnings and suggesting improvements for the next quarter or year

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Timing• Must begin the process before a new Quarter starts• Must ideally start 5 Weeks prior to the new Quarter (or 3 weeks minimum)

­ T-5: CEO meets with executives to discuss Quarterly Objectives (or annual Goals)­ T-4: CEO & executives document the planned high-level Quarterly Objectives – CEO hands down

these next quarter Objectives to the executives who need to come up with some KRs­ T-3: Share these with the OKR Owners (Directly Responsible Individuals); Executives hand down

their Objectives to the Managers or the “DRIs/Owners” who begin to work with teams and individuals to create their OKRs

­ T-2: Teams complete their OKRs and share those with the Executives and Individuals­ T-1: Individual finalize their OKRs

• New Quarter: 2-3 Week grace period­ OKRs can be still iterated slightly and there is a 2-3 weeks grace period after the Quarter starts

(Executives must present their completed OKRs at the Quarterly Business Reviews)

• Annual planning – very early stages should begin as early as August/September

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Planning• Requires discipline• Limit OKRs to 3-5 Objectives / 3-5 KRs• Bottoms-Up should be 70% of the process, ensures commitment & buy-in

­ Taps into collective wisdom and domain expertise of your team­ Not the high level but the actual KRs and Tactics

• Agile process and with iterative cycles• Resource Allocation –people, money, and time• The OKRs must be thoughtfully prioritized by each OKR Owner• Everyone needs to summarize the “Tactics” for each KR during the OKR planning

process and before OKRs are set in place for next quarter• Baseline KRs – if you don’t know the actual metrics

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Implementing• Show Long-Term Goals and Quarterly Objectives (Q3 / Q4)• Ensure executives’ and departments’ Objectives link directly to the

company goals and specify that clearly (i.e. to what Ox-Kx they link)• Have separate objective focused on LT Growth

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Operational vs. Aspirational• OKRs should not all be unachievable as some OKR experts suggest

­many can be “Operational” and thus achievable, despite being “stretch goals”

• If the implication is that achieving 70%-80% consistently should be considered a good outcome then it will become quickly demotivating to everyone that they are always ending up hitting 70%-80% of the aim

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Writing OKRs - The Importance of Language• Phrase OKRs in the language relevant to the targeted group• Use action verbs to start each O or KR

­All KRs should be actionable verb as it makes it more clear and more actionable when cascaded down as an Objective

• When in doubt use experimental phrases to improve baseline:­Complete X experimental lead generation projects in Q1 to grow lead flow­Complete X of PR Projects in Q1 to improve brand awareness­ Invest 10% of time each week into non-measurable, experimental, “serendipitous”

marketing

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Keep In Mind• You don’t know what you don’t know

­Can’t anticipate everything - need to acknowledge that there are many unknowns­Planning is by definition done in the past with what you knew at the time

• Running experiments is critical ­ It’s necessary to increase performance over time

• You may achieve every KR, while not every Objective ­ That’s OK as long as you are learning and can apply the learnings in the next quarter

• It’s OK to fail ­But it’s important to plan thoughtfully in advance, then analyze the gap in a

retrospective assessment (as aforementioned, the Owner / DRI is responsible for this) and plan for the next quarter using the insights

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Grading• Purpose: for learnings and improvements, not for performance evaluation • After the end of the quarter, each DRI grades Key Results from 0 to 1• Key Result Grade is not the same as KR measurement

­ If your company discovered that a given KR had little business value and stopped it mid-quarter, you have still achieved a good business outcome and deserve a high grade

• Objective’s grade is an average of KR grades• Grade of 1.0 for Objective is reasonable for operational objectives and grade

of 0.7-0.8 is good for “aspirational”­ Encourage setting ambitious objectives when possible for the following quarters

• Always base employee evaluations on KR metrics and never on OKR grades

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EXAMPLE: Company Top-Level 2016 Annual GoalsOwner: CEO

• Goal 1: Sell $100 Million in Bookings in 2016­ Q1 Objective: Sell $15M in Total Bookings­ Q2 Objective: Sell $25M in Total Bookings­ Q3 Objective: Sell $25M in Total Bookings­ Q4 Objective: Sell $35M in Total Bookings

• Goal 2:• Goal 3:• Goal 4:• Goal 5:

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EXAMPLE: Company Top-Level Q1-2016 ObjectivesOwner: CEO

• Objective 1: Sell $15M in Bookings­KR1 [for VP, Sales]: Win 1,500 Deals worth $15M in Bookings by 3/31/16­KR2 [for VP, Marketing]: Generate 75,000 Marketing Qualified Leads­KR3 ….

• Objective 2:• Objective 3:• Objective 4:

• Objective 5: Invest Effort in LT Growth [Mkg & Prod may be here]

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EXAMPLE: Department OKRs - MarketingOwner: CMO, Name

• Objective 1: Generate 75,000 MQLs [Aligned to CEO-Q1-2016-O1-KR2]­ KR1: Action Verb­ KR2:­ KR3:

• Objective 2:­ KR1: Action Verb­ KR2:­ KR3:

• Objective 3: Increase Q2 Pipeline by X # of Opportunities or by $Y Value (of Q4 $ARPA)­ KR1: Action Verb­ KR2:­ KR3:

• Objective 4: Long Term Marketing Investment (Brand, PR, experiments, etc.)­ KR1: Action Verb­ KR2:­ KR3:

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EXAMPLE: “Acceptable” vs. “Bad” of Non-Quantifiable, Yet Still Measurable Objectives and KRs• Bad (i.e. not measurable):

­ Build a brand ­ Become a good sales rep­ Improve sales alignment with marketing

• Acceptable but not Great: (i.e. they are also actionable and not ambiguous):­ Launch a PR campaign to improve brand awareness­ Sales Team to meet with Marketing team for an aligned Go-To Market meeting every Monday­ Achieve your quota

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Spotlight on Google OKR Process & Other Ideas• OKR – Objectives & Key Results

­ Google OKR Video: https://www.atiim.com/google-okr-objectives-key-results-video-transcript/

­ 15 Insights from the Google OKR Video: https://www.atiim.com/blog/15-great-insights-from-the-google-okr-video/

­ Ideas from Google OKR to Evolve the Process: https://www.atiim.com/blog/ideas-to-evolve-the-okr-process/

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Thank you!