OKR scoring, also called grading, is a way to assess and measure an objective’s progress. This helps to keep objectives top of mind for teams and encourages discussion around why progress might be slow or stalled.
Ideally, companies use quarterly OKRs with 4-6 key results per objective. This ensures that the company’s most important goals are top of mind for all employees.
Originally developed by Intel CEO Andrew Grove, OKR is a goal-setting framework that helps organizations execute their strategy and achieve their desired outcomes. It is a goal management system that has helped companies like Google establish priorities, create internal alignment and increase accountability. It’s been used since 1999, first by Google and then more recently by companies as diverse as Linkedin, Apple, Anheuser Busch and Amazon. OKR is sometimes mistakenly referred to as “MBOs,” an acronym for Management by Objectives.
The key to effective OKRs is their clarity and focus. They should be inspiring and directional, motivating employees to push themselves beyond their current abilities – but only as far as is realistic for the organization or individual. It’s recommended that no more than 3-5 objectives are set per quarter, with one to three key results for each. This allows for a good level of focus and keeps goals from becoming overwhelming and unmanageable. They should also be clear enough that they can be easily understood and communicated.
2. Key Results
Unlike many other goal-setting methodologies, OKRs are both aspirational and practical, encouraging company, team, and individual-level accountability and transparency. OKRs also align with company strategy, clarifying what work is most impactful and how everyone can contribute to the overall success of their chosen playing field.
Originally conceived by Andy Grove of Intel and taught to John Doerr, OKRs (often referred to as MBOs or Management by Objectives) are an outcome-driven goal setting framework that encourages accountability, transparency and alignment across teams and organizations. A version of the SMART goals approach, OKRs are measurable, specific, action-oriented and time-bound.
Linked to each Objective, Key Results are the specific activities needed to achieve the Objective. They must be measurable and ideally quantifiable. Unlike tasks or to-do lists that are checked off, Key Results are aimed at producing actual, success-relevant outcomes, and they should roll up from lower-level contributing goals (via GQM) to the higher-level objectives. Each Key Result should be owned by the person or team assigned to it, with progress updated on a predetermined cadence.
It’s important to track progress on OKRs to ensure alignment and accountability. The best way to do this is by using a goal tracking software with a built-in OKR tool. Aha! Roadmaps comes with default fields for objectives and key results that you can use to articulate your goals.
Objectives should be ambitious and aspirational, but achievable. Ideally, you want to see about 10% of achievement on each key result every quarter.
As a best practice, you should only have three to five objectives with 3-5 key results per quarter. This will ensure your team maintains a steady rhythm of checking in and keeps their focus on the most important goals.
Each objective should have a grade, which is determined by grading the key results that the objective depends on. The grade for an objective is the average of its key results. Typically, the CEO will own the top-level objectives and have senior goal-setting teams to help choose them. Other departments and managers will have junior goals/contributing goals that are automatically cascaded from the top-level goals.
One of OKR’s superpowers is its ability to align teams. The framework helps departments and individuals focus on the most important priorities, ensuring everyone is working in tandem toward a common goal.
To achieve this, a team must think in terms of desired outcomes rather than tasks. This requires a shift in mindset that takes time to cultivate. However, it pays off in the long run, as focusing on outputs will keep everyone’s goals from devolving into simple task lists.
To further ensure alignment, a company must adopt a culture that encourages collaboration and communication. This means setting a cadence for strategic OKRs at the top level, tactical OKRs at the team level and weekly OKR reviews to discuss progress. During these meetings, it’s critical to highlight any dependencies between teams so that they can collaborate on ways to achieve them together. This helps eliminate redundancies and avoids work duplication. It also promotes empathy, as teams can see that their efforts affect each other.