The OKR Method: Why and How to Adopt It? (With Examples)

A project management technique popularised by Google, the OKR (Objectives and Key Results) method is used in many agile organisations. So what is this framework? What are the best practices for implementing it? Discover in this article how to move from a to-do-list culture to a culture of results, thanks to the advice of Gilles Lalyre, Product Manager and Product Coach at Wemanity.

1. What is the OKR method?

To succeed in your OKR strategy, it is first and foremost essential to understand the logic and value of the framework, which is marked out by the alignment it creates between strategic vision and operational execution.

A. A management by objectives

The essence of this methodology is summarised in its acronym, ‘OKR’, which stands for ‘objectives and key results’.

Two pillars, two levels

Developed by Andy Grove, the CEO of Intel, the OKR method was proposed to Google by investor John Doerr, author of the reference work Measure What Matters and a blog of the same name. The success was not long in coming, since Larry Page, the co-founder of Google, now admits that the framework has enabled him to multiply the growth of the web giant by 10.

However, the OKR methodology is not reserved for Silicon Valley startups. It is often offered as an alternative to more traditional management methods and all companies can implement it throughout the year. It is very simple, as it is based on a binary operation: ‘It’s simply a question of asking why and how,’ explains Gilles.

In practice, the framework is therefore based on two axes:

• The first level is for the objectives, which correspond to the goals to be pursued. They set the course, the direction.
• Key results come into play at a second level, setting a value to be achieved for the success of the related objective.

In practice, annual objectives are set at management level, while OKRs are quarterly and set by the teams.

The OKR principles

To produce results, the framework requires the organisation to adhere to a certain philosophy.

• Transparency: a company that wants to implement this strategy must start by communicating its strategic objectives clearly, and be prepared to listen to the possible reactions of its teams. The alignment sought between vision and execution thus requires dialogue, as Gilles confirms: ‘There must be an exchange between the vision of the strategic objectives and their implementation by the teams. They need to understand what comes from the top of the organisation, but also be able to share the reality on the ground.’
• Collaboration: by defining how to achieve measurable goals, teams are encouraged to collaborate with top management. Teamwork is also important in the phase of defining key results, as the group must discuss the metrics to be used and organise their monitoring and management during a mission.
• Iterative approach: for the objective to be achieved, the team needs to check on a regular basis (ideally once a week) that it is progressing correctly and at the right pace, following the key results. If this is not the case, it must analyse the situation and then rectify it.  It is therefore necessary to dissect the results obtained and adjust subsequent actions accordingly.

B. A powerful framework for executing business strategy

OKRs are particularly effective and successful because they give employees more independence in setting their own expectations for the coming months, while at the same time improving visibility for all stakeholders on overall progress.

OKRs generate engagement

Contrary to management techniques in which the objectives for the year are set in cascade by the hierarchy, this methodology offers everyone better visibility of the company project as well as greater autonomy in the organisation of their tasks. The objectives and key results contribute to team investment.

While the absence of clear objectives is one of the primary sources of stress and demotivation, the objectives and key results contribute to the team investment.

‘The OKR method is a break form the routine.’ says Gilles. ‘Work is no longer about doing things blindly, but about thinking about the impact of your actions. The team finds meaning in its actions, knowing that there can be no cognitive dissonance: a team that has defined how to achieve an objective is, by nature, carrying out the work that it itself has imagined.’

The ability to track results and adjust them

For Gilles Lalyre, one of the great advantages of this technique lies in the possibility of adjusting the strategy or execution, so as to constantly seek alignment between the strategic vision and the field.

‘Unlike annual objectives, which are immutable, OKRs are tracked on the basis of data, i.e. reliable information. This makes it possible to know whether the team is on the right track and to make adjustments, always on two levels: if the results are not there, it is possible, depending on the situation, either to adapt the way the team is working, or to question the objective.’

A lever for breaking down silos

At a time when many companies are seeking to decompartmentalise their departments in order to gain in agility and overall performance, the implementation of this methodology is an opportunity to create multidisciplinary teams, which can move forward on cross-functional projects with concrete and shared desires.

For example, the OKR method is perfectly suited to digital projects, where the team, consisting of employees from IT, marketing and sales, can set OKRs involving all aspects of the project.

2. How to use the OKR framework effectively

While OKRs are very simple to implement and do not require other frameworks such as Scrum, they do require some flexibility. This should not be confused with the notions of SMART objectives and KPIs.

A. Stop command and control management

Because they are defined as a team, OKRs are incompatible with the command and control management model in which one person decides everything.

In practice, however, Gilles Lalyre observes that this change in managerial approach is quickly accepted, both by teams seeking autonomy, and by managers and leaders:

‘In a system with cascading objectives, managers rely on the reporting of the tasks performed. But isn’t it more advantageous for management to be informed about progress rather than milestones? In fact, even if the autonomy left to the teams can be worrying at first, managers quickly pick up on the benefits of the OKR method. As it is based on metrics, it allows decisions to be made on the basis of data, without subjectivity.’

They therefore make decision-making more secure: by providing managers with reliable information, they offer more visibility and generate measurable progress.

However, these factors should never be used to punish the team. They are a lever to encourage collaboration within organisations.

B. Distinguish OKRs from SMART objectives and KPIs

In some respects this is similar to SMART objectives, which call for specific, measurable, achievable, realistic and time-bound objectives. This brings us back to specificity and time limitation. However, the two approaches are not the same, as the OKR method distinguishes itself by setting qualitative (not quantitative) and ambitious objectives, to encourage the team to step out of its comfort zone. 

Where SMART objectives aim to develop and define a key measurable objective, OKRs define a much more ambitious objective that is not necessarily achievable. Furthermore, they connect this objective to its own result and make the objective evolve throughout the methodology according to the victories and failures obtained during the mission. 

The KPIs, pure raw data

A Key Performance Indicator (KPI), while useful for monitoring day-to-day activity, is not used to measure progress. This is raw data, decorrelated from the objectives. KPIs thus correspond to all the scores and other metrics providing information, for example, on productivity, quality or capacity: stock turnover rate, average buying behaviour, NPS (net promoter score), conversion rate, churn rate, and customer acquisition cost, etc.

One of the main differences is also the intention when setting the company’s objectives. Key indicators are usually achievable and measure the outcome of a process or project that is already in place, while OKRs are somewhat more ambitious.

The key result, measurable data to be used dynamically

Because it contains a value to be achieved, the key result is a way for the team to check that they are making good progress towards the objective. As for the key results, they are part of a real dynamic, offering the possibility of monitoring progress during the mission. A key result should be objectively measurable, simple, and allow you to track your progress. 

C. Examples of objectives and key results implementations

With regard to objectives, here are three concrete examples for a company to understand the concept:

• Satisfy our customers
• Successfully launch our product
• Increase employee engagement

Now let’s see how each of these could be translated into key results

Objective 1: ‘Satisfy our customers’

• Key Result 1: reduce the customer churn rate from 25% to 10%
• Key Result 2: increase the number of weekly website visits from 8,000 to 12,000
• Key Result 3: increase the number of users who fully complete their profile from 70% to 90%

Objective 2: ‘successfully launch our product’

•  Key Result 1: get more than 800 new registrations
•  Key Result 2: obtain product reviews in 5 specialist journals consulted by the target
•   Key Result 3: achieve a registration/product trial ratio above 20%
•   Key Result 4: achieve a product trial/purchase ratio above 50%

Objective 3: ‘increase employee engagement’

•  Key Result 1: organise one day per month dedicated to employees and have a 60% registration rate
•  Key Result 2: collect the opinions of 80 employees on what can be improved and identify 5 great ideas
•  Key Result 3: achieve 85% employee satisfaction compared to the current 70%
•  Key Result 4: reduce turnover by 15%

Warning: these key results and figures are only examples. It is up to your teams, depending on the context, to define theirs and to know ‘where to set the bar’.

3. Tips and best practices for adopting the OKR method

A half-day workshop is enough to define your OKRs! However, a few rules must be followed to obtain the desired results.

A. Know how to define your OKRs: dosage and team support

The definition of objectives and key results is the first step, for which Gilles Lalyre recommends focusing on simplicity: ‘To begin with, it is best to limit yourself to two levels of OKR: you set objectives at the company level and you apply the key results at the team level’. Here are some guidelines for making the transition from theory to practice.

Some facts and figures on OKRs

Objectives and key results are determined over a maximum period of one quarter. They will therefore have to be reworked throughout the year.  They are set in the following proportions:

• Only 1 to 3 objectives are retained.
• Two to five key results are set, with only the priority key results being retained.

On the other hand, it should be noted that the intended result will not be fully achieved:

‘Google assumes that a key result is effective when it is 70% complete,’ says Gilles. ‘If 100% is reached, it means that the target result was not ambitious enough. Ambition must be measured, however, because a team that aims for too much can become demotivated when it realises that it is far from achieving its target. However, OKRs have the advantage that they can be adjusted according to the team’s findings’.

B. Carry out the collaborative phase of OKR creation effectively

For the organisation of this collaborative phase, Gilles recommends conducting the workshop in two stages when the objectives are set by the team.

The objectives are the first point to be addressed. The team starts by giving free rein to their creativity, expressing themselves without limits in a brainstorming exercise. It then votes to select the most relevant ones (within the limit of one to three).

The methodology is then repeated for the key results. Once agreed, the objectives and key results should be recorded, with particular care taken in their formulation.

‘OKRs are also an exercise in semantics,’ insists Gilles. ‘In my workshops, I invite participants, when it comes to objectives, to abandon the terms usually found around the notion of performance or improvement, and choose more fun, simpler words’.

C. Manage key results tracking

For the company, the setting of objectives and key results is only of benefit if there is a real ability to track them.

Find and recover data

Where is the data that will verify that you are on track to achieve the goal set for each key result? This issue absolutely must be addressed during the implementation of the framework.

If the measure does not exist, the team must set up a system to retrieve it. In the absence of benchmarks at the outset, it is also responsible for setting a threshold to be reached (according to good practice, the market, etc.) and then refining it afterwards, depending on the results obtained during the mission.

Track OKRs on a regular basis

Over time, the team should collect and record data to track their key results, either in a simple Excel file or via a dedicated tool such as Workboard.

While there is no set format, the subject should be discussed regularly, for example in a team meeting once or twice a week.

Whichever monitoring method is chosen, the main thing is to check that you are moving in the right direction. If this is not the case, the exchanges are an opportunity to understand why and to adjust the aim of fire.

Have OKR champions

Gilles also recommends appointing people to manage the OKRs.

‘When managers are in charge of OKRs, we quickly fall back into command and control management. The ideal is therefore to appoint OKR champions (or OKR masters), i.e. people within the team who are motivated by the OKR method and who take charge of retrieving the data and recording it.’

These champions contribute to the successful deployment, adoption and use of OKRs within the company. A champion may therefore not necessarily be a manager. It goes without saying that he or she must be an organised person who is good at coaching and helping his or her teammates.

Celebrate wins with the whole team

OKRs follow one another quarter after quarter throughout the year. It is therefore essential to set up points in your management to celebrate short-term successes.  For example, hold meetings where teams can celebrate previous successes while looking ahead to the next goal.

As should be clear by now, the OKR framework gives teams a boost! Easy to implement, it improves engagement by involving teams in the achievement of objectives, and by providing management with excellent visibility on work progress. So, ready to get started?

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