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Performance ManagementMay 24, 2022

OKRs: A complete guide to Objectives and Key Results

OKR planning with post-it notes on window

OKRs (Objectives and Key Results) is a collaborative goal-setting method that helps teams and individuals to set – and reach – ambitious goals with measurable results.

OKRs offer a powerful method for tracking progress, creating alignment, and encouraging engagement around common goals.

What is OKRs?

OKR is an acronym that stands for Objectives and Key Results. It’s a popular framework for goal management, that helps organizations visualize their strategy – and execute on it. 

The benefits of the OKR framework include an improved focus on the most relevant results, a more transparent way of working, and increased strategic alignment. 

The way that OKRs can help companies achieve this, is by organizing the team members, teams, and departments – as well as the work they do – around common Objectives. 

What is the difference between OKR and KPI?

KPIs and OKRs are different types of goals. One way of thinking about it is to imagine your organization as a car driving towards a destination. That destination is your mission & vision, the ultimate goal.  The OKRs are a way to build your roadmap, and make sure you’re traveling in the right direction. 

However, you need to keep an eye on your dashboard on your way to the destination. You check that you have enough gas, oil, washer fluid, and so on. And just as you need to keep an eye on those metrics while driving, you need to keep an eye on your KPIs while working towards your objectives. KPIs are the indicators that tell give you immediate information about your organization’s performance.

Objectives, Key Results, and Initiatives 

An OKR consists of an Objective, which tells you where to go, and a set of Key Results, which are the measurable results you need to achieve to reach your Objective. Initiatives are the different projects and tasks that will ensure you achieve your Key Results.

OKRs - a way to focus on outcomes over outputs

A common pitfall when it comes to measuring performance and productivity is focusing on outputs instead of outcomes. That’s when people fall into the trap of “busy work”, instead of identifying the work that actually matters and moves the needle. This is where the OKR framework can make an enormous difference, as it helps everyone in the organization focus on the right things.

What is the difference between KPIs and OKRs?

KPIs and OKRs are different ways to measure and frame your goals, and one does not exclude the other. While KPIs are the metrics that reflect performance, OKRs is the goal-setting framework to help your organization improve performance and focus on what matters in order to do so. 

KPIs measure performance but don’t tell you what needs to improve to grow of those numbers. They are high-level business performance indicators that you track regularly ( quarterly, monthly, weekly, and so on).

OKRs help you decide what needs to be changed or improved. When you’ve decided on what areas are central and need improvement, you set an Objective for that area, and add Key Results for measuring your progress towards this Objective.

Examples of Objectives, Key Results, and Initiatives

Before going into detail about how to write powerful and effective OKRs, let’s have a closer look at the different parts of an OKR: Objectives, Key Results, and Initiatives. 

It’s helpful to keep in mind that Objectives, Key Results, and Initiatives provide the answers to three important questions:

1. Where do we need to go?

2. How will we know if we’re getting there?

3. What will we do to get there?

Objective: Where do we need to go?

The answer to the first question is your Objective. It sets a clear direction, comparable to a destination. 

Examples of Objectives:

  • Provide the best customer experience in our industry

  • Increase growth compared to last quarter

Key Result: How will we know if we’re getting there?

The answer to the second question is your Key Results for that Objective. It should be measurable to help you verify that you’re moving closer to your target. 

Examples of Key Results: 

  • Increase our NPS to 75

  • Close X amount in new deals 

Initiative: What will we do to get there?

The answers to the third question are your Initiatives. Those are the actions you will take to reach your Key Results and as a consequence, achieve your Objective.

Examples of Initiatives: 

  • Implement an LMS system to improve our customer onboarding journey

  • Hold 3 coaching sessions to upskill our account executives

The right OKR software can help you implement OKRs in your organization

The Eletive platform supports the OKR framework and helps you create transparency, alignment, and accountability around your business objectives and organizational goals. By gathering all the tools you need for employee engagement and performance management in one platform, Eletive helps you build a healthy and productive workplace where people thrive and perform at their best.

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