Use a framework to create OKRs

  • 8 minutes

The formula for a solid OKR framework is: I will OBJECTIVE as measured by KEY RESULTS via KEY INITIATIVES AND PROJECTS.

Image showing the formula for a solid OKR framework.

To establish a strong framework and propel your business in new, exciting directions, you need to master each element; the Objective, Key Result, and Key Initiatives/Projects. Each element has unique traits designed to unlock focus, alignment, tracking, transparency, and stretch.

We like to think that writing great OKRs is a little like writing a great book. It's a two-part process.

  • Step 1 is to write
  • Step 2 is to edit

To make things easier, while you're writing, you can start with a simple formula, and while you're editing, it's about asking the right questions.

Writing

This is a process that requires patience and writing great OKRs gets easier over time. In fact, it might take several quarters to get right, and that is okay.

Writing objectives

Let's start with an Objective. Remember that Objectives ask, "Where do I want to go?" and the answers should be actionable, aspirational, and meaningful. To make things easier, while you're writing an Objective, you can start with a simple formula, such as the one below created by Paul Niven.

  • Verb + what you're going to do + so that/in order to = Objective

The verb is your action, what you're going to do is your aspiration, and the phrase "so that" or "in order to" is your meaning.

  • Action: This is a verb statement. Examples include: Expand, Build, Develop, Increase, Decrease, Purchase, etc.
  • Aspiration: What are you focusing on? Examples include: a new market, customer acquisition, diverse culture, must-have product, etc.
  • Meaning: Why are you doing this? Examples include: increase market share, grow a user base, create a fiercely loyal customer following, etc.

A filled-out formula for an Objective may look like this:

Image showing the completed formula for an Objective.

Writing key results

Now let's write some Key Results. Remember that Key Results ask, "How will we know we're getting there?" Key Results are outcomes and should be focused, measurable, and ambitious. To make things easier, while you're writing a Key Result, you can start with a formula, such as the one below also created by Paul Niven.

  • Verb + what you want to track or count + from X to Y = Key Result

The verb is your action, what you are going to track or count is your area of focus, the X to Y is your measure, and the difference between the X and Y is the level of ambition you're trying to achieve.

  • Focus: The metric you want to measure. Examples include: CSAT score, new hires, knowledge base articles, video views, etc.
  • Measure: The starting point and ending point you're hoping to achieve. Examples include: increasing from 80% to 95%, decreasing from 10 to 5, etc.
  • Ambition: The amount of stretch being applied to this metric. The level of ambition is based on the difference between your starting measure and ending measure.
    • Note about ambition: the level of ambition is contextual. Something that may be a stretch for one department might not be a stretch for another. A good rule of thumb here is that you should feel scared/uncertain that you can reach 100% of this stretch.

A filled-out formula for Key Result may look like:

Image showing the completed formula for Key Result.

Writing Key Initiatives/Projects

To wrap things up, let's write some Key Initiatives/Projects. Remember that Key Initiatives/Projects ask, "What do we have to do to get there?" Key Initiatives/Projects are outputs and result in a list of tasks that need to be completed.

  • Verb + Output + as measured by the completion of X, Y, Z = Key Initiative/Project

The verb + output is name of your Key Initiative/Project, and the X, Y, Z is your list of tasks A, B, and C.

  • Key Initiative/Project: Title for the group of tasks that need to be completed. Examples include: Launch a mobile version of our product, Create new video content, etc.
  • A, B, C, etc.: The list of activities that need to happen. Examples include: Write, Record, Edit, Review, Submit, etc.

A filled-out checklist for a Key Initiative/Project may look like this:

Image showing a completed checklist for a Key Initiative/Project.

Editing

Now that you've got your creative juices flowing, and after you've sketched out a first draft of your OKRs, here are our suggested editing tips:

  • Step back and ask yourself questions to help solidify your OKRs.
  • Remove anything that is unclear or that prevents focus.
  • Add anything needed for clarity or success.

Once again, we have two steps to follow: review the OKR superpowers and perform the "Necessary and Sufficient" test.

OKR benefits

Look at your OKRs and make sure they adhere to the five OKR benefits.

Alignment

Have you aligned your goals from the top down, bottom up, and across teams to ensure everyone is driving towards the same purpose, across the organization? Do we have the right owners identified who will feel accountability for driving progress?

Focus

Have you limited both Objectives and the Key Results below them to 3-5 at most? It can be difficult at first to narrow down your goals when everything seems to be a priority, but remember, “If everything is important, then nothing is.”

Transparency

Are your OKRs public for all team members to see in order to create accountability and surface dependencies and roadblocks? Can our team directly impact Key Results or are we reliant on stakeholders? If the latter, can we make this a shared OKR?

Adaptability

Have you set up integrations to a single source of truth where possible to enable faster and better decision making based on dynamic real-time data and insights? Will we be able to see progress on each Key Result in the current time frame?

Growth

Do your OKRs go beyond “business as usual” to strive for ambitious outcomes and reaching for what’s possible?

Now let's take the necessary and sufficient test.

  • In looking at an OKR, ask yourself, "Are all these Key Results necessary to achieve my Objective?"
    • If the answer is yes, then it passes the necessary test.
    • If the answer is no, then remove what isn't needed.
  • Next, ask yourself, "Will accomplishing my Key Results be sufficient enough to achieve my Objective?"
    • If yes, then it passes the sufficient test and you're good to go.
    • If no, then modify existing Key Results to make them stronger, and add any Key Results to achieve your Objective.

Apply the framework

Now let's apply the framework to a real-world business example.

  • Poor Objective: Make more money.

While most businesses do need to make money, I'm sure you recognize that this is a poorly written Objective that needs to be edited. Here's why:

  • It's not very actionable, "How are we going to do this?"
  • It's not very aspirational, "What's so special or important about money? Does this inspire us?"
  • It's not very meaningful, "Why are we trying to do this?"

To help answer these questions, let's apply our formula: verb + what you're going to do + so that/in order to.

  • Better Objective: Expand into Latin America in order to increase product market share.

With this Objective we now have a better understanding of the how, the what, and the why in pursuing this goal. While it still holds on to the intent of making more money, it focuses on one avenue of making money, which will propel us in a specific direction.

Now let's look at three Key Results that span multiple departments:

  • Increase new product sales from $100K to $1.5M.
  • Increase social media views from 5,000 to 15,000.
  • Increase qualified leads via web form from 50 to 3,000.

Ask - Are these focused, measurable, and ambitious? Yes!

  • Each one has a focus: new product sales, social media views, and qualified leads.
  • Each one has a measure: $100K to $1.5M, 5,000 to 15,000, and 50 to 3,000.
  • Each one is ambitious: 3x growth from 5k to 15k, and even more for $100K to $1.5M and 50 to 3,000.

Next you can look to see if they line up with the OKR benefits.

  • Alignment: Who are our stakeholders?
  • Focus: What can be eliminated?
  • Transparency: Where are there unseen implications or bottlenecks?
  • Adaptability: Can we track if we were successful?
  • Growth: Is it propelling the business forward?

We're looking solid here, but when thinking about alignment, you start to consider other stakeholders. One of the stakeholders we left out is the product team. So, we should add a Key Result around launching a Spanish language version of our product.

Next, we'll move on to the Necessary and Sufficient Test.

  • Are all these Key Results necessary to achieve our goal?

When we think hard, we realize that increasing our social media views isn't necessary to meeting our Objective, so let's remove that one.

  • Will accomplishing my Key Results be sufficient enough to achieve my Objective?"

What you realize is that you won't be able to sufficiently achieve your goal without adding more Spanish-speaking sales reps. So, let's add that final Key Result.

Our final OKR list looks like this:

  • Objective: Expand into Latin America in order to increase product market share.
    • KR1: Increase new product sales from $100k to $1.5m.
    • KR2: Increase qualified leads via web form from 50 to 3,000.
    • KR3: Launch Spanish-language version of the product and grow users from 0 to 10,000.
    • KR4: Increase bilingual sales staff from 2 to 5.