Understanding Objectives and Key Results (OKRs)

1. What are OKRs?

2. Why are OKRs important?

3. How to use OKRs?

What are OKRs?

OKRs stands for "Objectives and Key Results." OKRs are a popular approach to goal-setting, which allows employees to execute individual and organizational goals. Objectives are something that you want to achieve, whereas Key Results are a measurable way to keep track of how close you are to achieving your objective.

Why are OKRs important?

Organizations should implement OKRs to overcome the issues of miscommunication and goal misalignment. It helps in aligning organizational and individual goals and creates a purpose-driven culture. Some of the most prominent benefits of OKRs include:

  • Clear direction to employees and leadership.
  • Focus on individual and organizational goals.
  • The ability to track the progress of different goals.
  • Goal-setting leads to higher engagement and productivity.
  • Increased transparency, accountability, and dependability in the organization.
  • Leads to better resource allocation and utilization.
  • Ability to track individual performance.
How to Use OKRs?

There are two approaches used for setting OKRs.

  • The Top-down approach, in which the organizational objectives are cascaded down to different departments, and in alignment with them.
  • The Bottom-up is the opposite of the top-down approach. Here, different teams and employees create their own OKRs and try to convince top management to adopt them. The approach usually requires leadership's rationale and forward-thinking for adopting OKRs.

Most of organizations use a mix of both approaches, it is important to follow the OKR process to get substantial results from it.

The process consists of the following steps:

  • Understanding the ultimate goal an organization wants to achieve is crucial.
  • Creating an OKR scoring method to effectively calculate the completion of an objective.
  • Communicate OKRs to the workforce so that they can write OKRs for themselves based on organizational goals.
  • Tracking OKRs through weekly check-ins and quarterly or annual reviews.

Learn more about the essential guide to OKRs.