Measure business outcomes using objectives and key results

Modern operations require a modern approach to measuring business outcomes. Objectives and key results (OKR) is a powerful goal-setting framework for defining business objectives and tracking their outcomes. Your organization's OKR measurement platform should support your organization's outcomes and plan for growth by:

• Aligning the everyday work with strategic business initiatives
• Aligning the work of cross-functional teams
• Providing real-time progress and performance insights
• Enhancing staff productivity and agility

An overview of objectives and key results

The OKR framework fosters innovation, drives alignment in complex work environments, and helps individuals focus on what matters for their organization.

The two components of all OKRs are the objective and its key results. An objective is a statement of intent that describes what your team is trying to accomplish and why it's important. Key results are specific outcomes that track your team's progress towards the objective. You can define these components for your own OKRs by asking the following questions:

• Objective: Where do you want to go?
• Key results: How do you know you're getting there? How do you measure that progress?

OKRs move teams away from an “output” mindset (“What projects or tasks did we do?”) to an “outcome” mindset (“What was the business result of the project or task?”). You can set OKRs at the beginning of a key time period for your business (like a quarter or a fiscal year) and then check in regularly with those OKRs to keep your team focused on the importance of their work rather than its volume.

OKR software

Organizations use specific software to leverage the OKR framework and ensure that the most important objectives are visible. Microsoft Viva Goals is a goal-alignment solution that connects teams to your organization’s strategic priorities, unites them around your mission and purpose, and drives business results.

Because Viva Goals is a part of Microsoft Viva, it integrates into the employee experience, empowering teams to be their best from anywhere.

OKRs add value to an organization

OKRs give a strategic advantage to organizations of any size and can be adopted by individuals in any role. OKRs add value to your organization in the following ways:

• OKRs help your organization navigate rapid change, reduce risk, and identify waste. The OKR framework gives a level of visibility into work done across your organization that allows you to proactively manage risk. It helps you identify themes, trends, and changes to diverse data sets that can go unnoticed without a unifying system. Your organization can shift focus from activity to outcomes, making the right changes at the right time to stay competitive.
• OKRs motivate and foster involvement. When done well and made the driving force behind your organization's strategic rhythm, OKRs can keep every employee connected to and invested in your broader mission.
• OKRs create cross-functional cooperation that unifies initiatives and improves collaboration. When each individual, team, and department goal is guided by the organization's broader strategy, teams can clearly prioritize each project, task, and outcome.
• OKRs offer clear, contextual communication with continual progress reviews. The OKR framework doesn’t stop when your goals are written. Instead, it creates a strategic rhythm around the most important outcomes that your organization is pursuing. The OKR framework should influence every interaction and foster continuous improvement in every review process.
• OKRs create clarity that is documented, measurable, and owned. The OKR framework provides accountability that is tracked and measured. This accountability works in both directions: each individual is responsible for their OKRs, and your organization's leadership is responsible for enabling their work.

Examples of OKRs

Objectives need to inspire your organization and its teams to fully understand your mission. Key results need to be specific and measurable within each quarter. The following example OKRs can help you as you work to design your own.

Objective 1: (Product and Engineering example): Deliver a “must have” product in order to delight customers and grow our user base Key result 1: Increase our NPS score from 40 to 50. Key Result 2: Increase daily active users (DAUs) from 1,200 to 1,500. Key Result 3: Achieve 1,000 downloads in the app store.

Objective 2: (Human Resources example): Increase employee retention in order to do our best work. Key Result 1: Reduce voluntary attrition from 30% to 10%. Key Result 2: Increase ratio of open positions filled internally vs externally from 30% to 50%. Key Result 3: 100% of our employees have a standardized career plan approved by HR.

Objective 3: (Customer Success example): Optimize training process in order to increase product adoption. Key Result 1: Increase key account MAU from 250,0000 to 350,000. Key Result 2: Increase customer-facing knowledge base articles from 25 to 100. Key Result 3: Double participation at success office hours from 500 to 1,000 people.

Next steps

The following five steps can help your organization move forward with OKRs:

• Step 1: Learn. Start exploring what OKRs can do for your business. Tune in to some of your industry peers and leaders and learn how OKRs have benefited their organizations.
• Step 2: Plan. As you begin to draft your OKRs, ensure that your sponsors are contributing and involved in the process. Work with an OKR coach to refine your OKRs.
• Step 3: Launch. Each organization launches initiatives differently. Maintain a strong communication plan, and build OKR calibration and celebration process into your operating model.
• Step 4: Drive. Maintain rigor and focus by making sure that you share outcomes and results across your organization.
• Step 5: Improve. Continue to improve, revisit, and rethink how to connect more across your organization. OKRs in spreadsheets can be useful, but your organization will benefit most when everyone works together to meet objectives and gains insights from their aligned data.

Learn more about Microsoft Viva Goals.

Now that you've measured your business outcomes, you're ready to understand financial considerations.

Understand financial considerations