How to write OKR objectives that focus your team and level up performance

Writing great objectives as a part of an Objectives and Key Results goal setting process (OKRs) can be daunting, especially if you're just getting started and have never done it before. Luckily, there are some tried and true methods for writing objectives that are sure to set you up for success. In this blog post, we'll share some tips on how to write objectives that will focus your team on the highest-value work and motivate them to continuously improve. We’ll also lay out the most common pitfalls companies run into when writing objectives, so you and your team can avoid them.

A brief intro to OKRs

But first, what the heck are OKRs?

OKR stands for Objectives and Key Results, and refers to the business strategy tool/framework that can be used in order to measure and track progress towards specific objectives.

OKRs have recently become very trendy in management and tech circles, but actually they build on very established practices going back to the middle of the last century.

In 1954, Peter Drucker first coined the term “Management by Objectives” in his book The Practice of Management. He defined it as “a system in which the objectives of an enterprise are defined and accepted, the plans for achieving them are developed, and performance is measured and evaluated periodically.” This system was later adapted by Andy Grove at Intel, who is credited with popularizing the use of OKRs as a tool for setting and measuring progress and success. Grove believed that setting clear and measurable objectives was essential for Intel’s success, and he implemented a system of quarterly OKRs to hold everyone in the company accountable to these objectives.

In the modern era, OKRs have been adopted by a number of high-profile tech companies, including Google and Kleiner Perkins. Google’s OKRs are famously rigorous, and they have been credited with helping the company achieve its remarkable growth. Kleiner Perkins, meanwhile, has taken a more flexible approach to OKRs, allowing the companies they invest in to tailor them to their own needs and culture.

The key benefits of using OKRs are that they can help to:

• Clarify and simplify your company’s overarching goals and objectives.
• Help teams and individuals stay focused on the most important work.
• Encourage and motivate employees to continuously improve.
• Facilitate better communication between managers and employees.
• Help you track and measure progress over time.
  

OKRs in action

Now that we’ve covered the basics, let’s get into how to write objectives as part of an OKR process.

In a nutshell, every OKR has two components:

• Objectives which are statements about exact goals that express the nature of the success that the organization is focused on achieving during a given time period.
• Key Results which are concrete, measurable things that would mean an objective if the team is able to achieve them.
  

In essence, Objectives are what you want to do, and Key Results are how you know you’ve done it.

In Allo, we also have Initiatives, individual action items and projects that are undertaken to help achieve the Key Result. But this is our innovation on the original OKR framework.

In this blog, we’re going to focus mostly on the Objective part of OKRs. They seem simple, but there are actually some subtle nuances here that a lot of organizations miss.

What makes OKR objectives different from other goal setting frameworks?

The key innovation that Drucker’s “management by objective” brought into business strategy was the focus on metrics and measurability, and in many people’s minds this is what OKRs are synonymous with. But they’re not the only game in town when it comes to numbers-focused goal setting. Two other business strategy tools that OKRs often get conflated with are SMART Goals and Key Performance Indicators.

There’s a lot of overlap here, but the OKR framework does some things that are unique and subtly important to its success. So understanding the differences is crucial to successfully implementing an OKR-based goal setting practice.  

SMART goals are a popular method for goal setting that was first coined by George Doran in 1981. The acronym stands for Specific, Measurable, Achievable, Relevant, and Time-bound. SMART goals are often used in businesses and organizations as a way to measure progress and ensure that goals are achievable. A well-designed OKR will probably also have these attributes. But OKR separates the strategic and qualitative bit (Objective) from the concrete and measurable bit (the KR), where smart goals lumps everything together. This makes coming up with OKRs a little bit harder, as there are more steps. But splitting it up this way often means the end result is often clearer and more actionable to the entire team.

KPI, on the other hand, is an acronym that stands for Key Performance Indicator.

A KPI is any metric a business uses to measure progress towards a specific goal. The origin of this term is unclear, but it has been in use for a long time and is an established part of business. KPI's are usually used to track progress towards specific targets, such as sales goals or production targets. They can also be used to compare performance between different departments or teams.

The main difference between OKRs and KPIs is that while almost anything measurable that contributes to a company’s success can be tracked as a KPI, OKRs are only used to express the company’s highest aspirations and the metrics most relevant to achieving them. By attaching certain metrics to the objectives, OKRs naturally raise them to paramount importance, and cause the team to focus their attention and effort on projects that affect them. This makes OKRs more useful for focusing a company and driving improvement than KPIs on their own.

Getting started with writing OKRs

Okay, so hopefully by now you’re sold on why OKRs are such a powerful and flexible tool for company strategy, and you’re itching to start writing them out yourself.

That’s great! But before you do, take a step back. OKRs tend to work best as an encapsulation of the things the team already knows to be important and is working on. The most useful objectives, therefor, are usually not the ones that you just dash off yourself and communicate to the team. Starting with some group introspection and brainstorming not only helps the team to feel more invested in the process and connected to the result, but will often uncover promising ideas that would never have come up otherwise. It doesn’t just make your objectives easier to implement. It actually helps make them better

Allo can be a great tool for facilitating these kinds of brainstorming sessions, thanks to the collaborative canvases that underpin every part of our product. Start with small groups of no more than five participants and a canvas that’s blank except for some discussion questions. Ask people to take five minutes adding post it notes with answers to each question, then take at least another 20 minutes to discuss what resulted.

Here are some good high level strategy questions to ask:

• Where are we currently the strongest?
• Where are we currency the weakest?
• What do our competitors do better than us?
• What don’t they do that we could distinguish on?
• If this time next year we’ve completely dominated our industry, why did that happen?
  

Don’t rush to write objectives immediately. The answer to each of these questions doesn’t need to be an objective. And all objectives don’t need to be tackled at once. Once you’ve had a chance to step away, come back to the results of the session

Of the ideas that came out of these sessions, which 3-5 stand out as being the most important? Those should be the things you turn into your objectives for the quarter.

Making your vision concrete: writing objective statements

Now that you’ve got an idea of what you want to focus on, it’s time to turn it into your objective statements. You’ll want each plank of your strategy to have a separate objective that captures both what you want to achieve and potentially how you want to achieve it.

When writing objective statements, keep this advice in mind:

• Keep your objective statement short, sweet, and to the point. Elaboration can come later. The important thing is that the objective be something that can be understood immediately by the whole team. If people have to work to understand it, then it won't be motivating to them.
  
• Make sure it is aspirational and captures why the goal is important. It should be something that people can get excited about and that will inspire them to do their best work. Objectives that sound mundane lead to mundane results.
  
• Be realistic but ambitious. The objective should be something that is challenging but achievable. It should stretch people but not be so out of reach that it feels impossible.
  
• Use active language. Consider beginning with a verb. This will help to make the objective feel more immediate and actionable to people.

Types of Objective

Another thing that’s crucial to keep in mind when writing objective statements is that not all objectives are the same. There are actually three different types of objective in the OKR framework:

Committed Objective

Committed objectives are the objectives that you feel must be done. They’re mission critical, and not doing them would represent a huge blow or missed opportunity. For example, if you have to do a bunch of work to pass a regulatory audit this year so that you can win a big government contract bid, then this is a make-or-break project that would be appropriate to set as a committed objective.  Committed objectives are evaluated on a pass/fail basis. Either you hit all of the key result metrics and pass or you don’t.

Aspirational Objective

Aspirational objectives are your audacious goals for the given OKR period and will form the bread and butter of your OKRs. They should represent an evolution of your business or a significant improvement over baseline. Because these objectives should be a bit of a stretch, partial success counts here. If the organization only achieves about 70 percent of the KRs attached to this objective, that’s still a fantastic success and should be treated as such. The 40-60 percent success range is considered progress toward the goal, but warrants more attention to see how things can be improved. Only a score below 40 percent is considered a failing grade.

Learning objectives

Learning objectives are objectives that are about learning new information about your company and the market, rather than achieving some discrete result. KRs associated with a learning objective are more likely to be behavioral, and assess whether you’ve done enough research or achieved enough validation for a hypothesis to proceed, rather than concrete business value that’s being driven by the objective. Still, learning objectives are critical, because they form the baseline knowledge the company needs to innovate. One quarter’s learning objective very easily rolls into next quarter’s aspirational objective.

Keeping this straight, and being very explicit about which is which when communicating your goals to the team is very important.

Getting the mix right

While every objective is important in its own right, getting the mix right is critical to having OKRs that will be challenging and transformative, yet motivating and achievable. Here’s some best practices to follow as you write your OKR objectives:

• Choose no more than 3-5 OKRs each period. You might be tempted to make everything you possibly want to get done in a quarter into an objective OKR. But one of the main benefits of OKRs is how they cut through the noise and focus teams on the things that make the biggest difference to the business' success and evolution. By only raising the most important work to the level of an objective, you turn your OKRs into a useful north star for your team that helps them to prioritize their own day to day work.
• Aim for a mix of OKR types, weighted toward the aspirational. Aspirational goals should be the bulk of your objectives, as this encourages the team to stretch and grow, rather than focus on more mundane work. You should always have at least one learning goal to ensure you're laying the groundwork for future innovation.
• Only set committed OKRs if absolutely necessary. If an objective is more of a guideline than a hard target, it doesn't need to be committed. In fact, committed objectives can actually demotivate team members if they feel they're unable to meet the targets. The more OKRs you are committed to, the more conservative your team is likely to be about them. In extreme cases, your team will begin to "sandbag" by underpromising during the process of setting OKRs so they can appear to over-deliver with standard work. This looks good on paper but it doesn't actually drive your organization to evolve.
• Set the broad objectives for the company, but let teams and individuals come up with their own OKRs in support of those objectives. One of the main benefits of OKRs is that they help teams self-organize and have ownership over their work. But it can’t do this if leaders micromanage the process. And that’s not to mention that it can lead to a sense of learned helplessness among team members, who may come to feel that they can't contribute or make a difference. So, while it's important for management to set the tone and provide some direction, it's just as important to step back and let teams figure out how they can best contribute to the company's success.

The 6 most common mistakes companies make with OKRs

Writing good objectives isn’t impossible. It just takes careful thought and diligent attention to language. That said, there are a few subtle mistakes we see companies make again and again which make OKRs less effective and harder for teams to employ.

Avoid these 6 common pitfalls and you’ll be way ahead of the game as you move forward with your OKR goals process:

1. Making a KR an objective & vice versa: A key result (KR) is a measure of progress towards an objective. An objective is a specific, measurable, attainable, relevant, and time-bound goal, expressed in qualitative terms. One of the most common mistakes that companies make when setting OKRs is to just make the metric itself the goal. But this is too reductive and less actionable, because it  doesn't capture why the metric is important in the broader sense. By the same token, an objective masquerading as a key result is likely to be pretty useless, because it can't help the team to gauge their success in any objective way.
   
2. Focusing on how rather than what: When writing an OKR, it is important to focus on what you want to achieve and how you want to measure progress, rather than on what you do to succeed. The how should be left to the individual or team responsible for achieving the objective. They'll be best able to
   
3. Not being clear about what kind of objectives you’re setting. You should always clearly communicate to the team whether an objective is a committed objective, a learning objective, or an aspirational objective, because they'll need to approach each of them differently. If they assume that they have to achieve measurable business results to succeed at a learning objective, or that every aspirational objective is committed, OKRs will end up paralyzing rather than liberating.
   
4. Not thinking cross-functionally: Another common mistake is to assign a single objective to each function— splitting it up into a "sales OKR" or a "marketing objective." While it is important that each objective have a person or team bottom-lining it, objectives are most powerful when they encourage teams to break down silos. Try to think of objectives that are broad enough to span several departments, or which different functions can contribute to in different ways.
   
   
5. Waiting too long to revise: OKRs are goals and guidelines for action. They're not laws set down in stone. An OKR should be revisited on a regular basis to ensure that it is still relevant and achievable. If an OKR is not achieving its desired results, don't wait until the end of the quarter to course correct.
   
6. Not being ambitious enough: An OKR should be ambitious and challenging. It should push you and your team to achieve more than you thought possible. If you look at an objective and you feel nervous, but not terrified, you're probably on the right track!

Conclusion

I hope we’ve been able to impress on you in this blog both the power of effective OKR goals, and the many nuances that go into getting them right.

The takeaway here is that writing objective statements is harder than it seems at first.  But by following the tips in this post, you should be well on your way to writing objectives that will focus your team on the highest-value work and motivate them to continuously improve.