Objectives and key results (OKRs)
Why OKRs?
We need to make sure that we have some way to all go in the same direction. We use OKRs for this. OKRs are there to help us focus. They enable us to reach our end goal, our purpose, as fast as possible.
What are OKRs?
OKRs were invented by Intel, then introduced at Google, and now most startups in Silicon Valley use them. OKRs stand for Objectives and Key Results.
The Objective is always:
- Qualitative (as in not something you can measure)
- Ambitious (not easily achieved)
- Time bound (we use 3 months)
- Actionable by the team (it has to be something we can impact)
The Key Results are always:
- Measurable and Quantifiable (We can measure if we get closer to our goal)
- Achievable (so not too ambitious)
- Objective (we only look at the impact we have had, not the effort we put in)
The OKRs help us connect our every day projects and tasks to the long term purpose.
So in 30 years, we want to have helped everyone reach their full potential. To do that, in 10 years we need to be at X, and to reach that, this year we need to at least do Y. That Y will be our yearly objective. Because the world changes faster every day, it doesn't make a lot of sense to make long term plans for our strategy. Therefore, we try to look three months ahead at most. We ask ourselves: "What can we do in the next three months to have as much progress as possible on reaching Y?" That becomes the quarterly Objective.
For example, in 10 years, we want to be the best social learning platform globally. So next year, we need to be the best in the Netherlands. We will state our Objective as: Become the best social learning platform of NL.
But what will make us the "best"? How will we know that we have achieved our goal? How will we measure if we are making progress? This is where the Key Results come in. We can say that the best to us means the social learning platform with the most features. Or the most users. Or the most content. Or the fastest growth.
In this case, the Key Results would be:
- KR: Added ten social learning features
- KR: Doubled the amount of users
- KR: Tripled the amount of content
- KR: The number of returning users grown with 100% month over month (MoM)
To see if we are actually achieving those results, we need to know the Baseline. The baseline is the way we performed on a metric before we started this quarter. So how many features did we have? How many users do we have? How much content do we have? And how fast are we growing the number of returning users now? If you don't know the baseline, you can't know if the KR you have set is achievable and ambitious. It has to be not too easy, and not too hard. That means it must be in the sweet spot between the two. Usually the KR is right if it makes you feel a little uncomfortable. If you feel confident it is too low, if you feel scared, it's too high. An ambitious KR forces you to rethink the way you work. Maybe our models, our flows, or our processes need to change to achieve it. Maybe we need to hire 20 people, or automate the work of 10.
The companywide OKRs are set by the Lead Link of Alignment. (S)he usually collects input from created and assigned "advisor" like roles. A draft version of the OKRs is published, and all Lead Links of the circles get to give feedback. After this the OKRs are published on Sputr and discussed in 🏫Town hall meeting (FTHM) and the Lead Links translate the companywide OKR to something their circle can impact. This way every circle tries to contribute to the OKR. You could even make OKRs for your roles, but it is not required.
You should link to the OKRs in your ' Why nows ' to make sure that what you are focussing on is the right project.
Grading the OKRs
The OKRs are graded bi weekly in the tactical. When grading, you simply look at the score of the metric. You calculate how far you have come compared to the baseline and the KR, and you assign a score between 0 and 1. Because a good KR is ambitious, you will likely end up around a 0.6 or 0.7. Higher means you weren't ambitious enough, lower means that it was too difficult. When grading the score, only the actual impact you have had counts. "We did a lot of work, shipped a lot of things, and put in a lot of effort" all doesn't count towards the score. It is objective, and only the measurable result counts. You can automate the calculation if needed like done below.
The grading can never be a discussion because it is based on objective data. But by doing it collectively, it will lead to tensions over the progress that has been made. The secretary will note the score and the changes since last week (or last two weeks) in the OKR in Asana.
At the end of the quarter we evaluate the final score, publish what we learned on Sputr , and use it to improve our OKRs for the next quarter.