3.1.2 Setting Objectives
As described in Deciding on a Vision the product vision statement is a high-level goal of what you want to achieve. But a vision does not tell the full story. To go along with the vision, objectives need to be set so that success can be measured. A vision without clear objectives is usually a recipe for failure. To deliver a successful project, you should:
- Identify objectives so that you will know if what has been delivered is succeeding
- Set key results for each objective
- Make a plan so that you iteratively deliver improvements based on what has been learned
OKRs: Objectives and Key Results
OKR stands for Objectives and Key Results, and is a framework that was developed by Intel and has been adopted by several Silicon Valley companies such as Google and Oracle. OKRS are used to:
- Create cultures focused on key priorities
- Align and unite teams behind a single strategy; and
- Help individual employees understand how their work contributes to the overall objective of the organization
This guidance will help you to learn how to use OKRs as within your organization. Using OKRs will help your team and organization:
- Measure success: by having clearly defined objectives and metrics
- Be disciplined: by making it easier to say no, and making prioritization easier
- Communicate better: because your OKRs should be accessible, it means that every employee and stakeholder should know the objectives and metrics for success
- Be better aligned: when your team and organization know what the project is focused on and how it will measure success, it is easier for people to connect the project with the objectives of the organization
What’s in an OKR: the Objective
OKRs are made up of two parts: an objective, and key quantitative results used to measure if the objective has been met. Objectives are aligned with higher level organization strategic goals and should make sense alongside those of other teams. They are a one sentence qualitative goal for a set time period.
- Answer the question: “what am I working towards without focusing on the tasks that get me there?”
- Be qualitative
- Be inspirational or motivational
- Be ambitious and may feel somewhat uncomfortable
- Be memorable: simple, short and easy to memorize. Not boring!
- Be time bound
Example objectives can:
- Increase transparency of provider performance
- Increase collaboration with clients
- Increase the quality of our data
- Improved care co-ordination
Start with developing 3 to 5 objectives. Creating more can lead to over-extended teams and a diffusion of effort. Tips for setting objectives may include:
- Do not use expressions that do not push for new achievements, e.g., “keep hiring,” “maintain market position,” or “continue doing x.”
- Use milestones from a plan or communicate clear accomplishments, e.g., “ship feature Y”
- Use tangible, objective, and unambiguous terms. It should be obvious to an observer whether or not an objective has been achieved.
Key quantitative results are the second part of an OKR and are used to measure if the objective has been met or not and a time in which the objective should be met. Requiring a deadline for a key result encourages you to think about how your project will improve over time and supports an iterative method of delivery.
Key results should:
- Answer the question: “how do we know we have achieved the objective?”
- Be measurable: every key result should tie to measurable success criteria
- Be focused: do not make them a laundry list, have between 2 and 5 key results per objective
- Have a unique identification number for each key result for traceability
- Include metrics or milestones
Below is a table with example objectives including associated key results:
|1||Increase transparency of provider performance||1.1||Publish all existing provider reports on our website by the end of Q1|
|1.2||Publish at least 100 new provider transparency reports on our website by the end of Q1|
|1.3||Enroll at least 500 providers on the self-reporting transparency service by the end of Q2|
|2||Increase collaboration with clients||2.1||Ship the “virtual backpack” by the end of Q1|
|2.2||Reach at least 500 monthly active users of the virtual backpack by the end of Q2|
|2.3||Achieve a satisfaction rating of at least 4.0 by the end of Q2|
|3||Increase the quality of our data||3.1||Run regular automated data quality test suite by the of Q1|
|3.2||Reduce the percentage of failures in the data quality test suite by 50% by the end of Q2|
|3.3||Automatically publish all data quality test results by the end of Q1|
|4||Improved care co-ordination||4.1||Reduce by 50% the number of case transfers from one county to another county that result in escalation by the end of Q3|
|4.2||At least 100 caseworkers have sent secure case notes to clients’ teachers or doctors by the end of Q2.|
|4.3||Reduce by 50% the number of printed documents sent to court in [these counties] by the end of Q1.|
Tips for setting key results may include:
- Set 2 to 5 key results per objective
- Choose measurable milestones which, if achieved will directly advance the objective
- Describe the outcomes, and not activities. Avoid words like “consult,” “help,” “analyze,” or “participate.” Instead, describe the impact of these activities, e.g. “publish customer service satisfaction levels by March 7th” rather than “assess customer service satisfaction”
- Create measurable milestones that should include evidence of completion. The evidence should be easily available, credible, and easily discoverable
The table below provides some examples of what a well-developed OKR should be:
|Examples of Good OKRs|
|Improve internal employee engagement||Launch the new product successfully|
|• Average satisfaction score of at least 4.2 points||• Conduct 20 customer development interviews|
|• Conduct fun days with special events||• Do 2 training sessions on the product launch for the marketing team|
|• Implement OKRs in all areas of the organization by the start of the new fiscal year||• Assist the marketing team by reviewing there launch documents|
How OKRs are Different
In practice, OKRs are different from other goal-setting techniques because they allow for incremental, adaptive goal setting with shorter and frequent iterations. Because OKRs aim to set ambitious goals, they encourage teams to focus on big bets and accomplish more than they thought possible, even if the stated goal is not attained.
OKRs can help teams and individuals get outside of their comfort zones, prioritize work, and learn from both success and failure. It’s important to remember that OKRS are used for learning and improvements, and not employee performance. In general, OKRs are:
- Simpler: to enable frequent goal setting cycles (Intel used to set OKRs every month), the process is extremely simple. Actual OKRs should be simple and easily understood.
- Shorter: Instead of using an annual static planning process that is not revisited, OKR uses shorter goal setting cycles (quarterly, monthly), so planning can be dynamic and adapt faster to change.
- Open Source: OKR is an open source framework. Companies are free to adapt it to their culture and context, creating what they need.
- More ambitious: Goals are encouraged to take the team out of their comfort zone and make them rethink the way they work to reach maximum performance.
Grading and Tracking OKRs
Once OKRs have been developed they should be graded. OKRs are usually graded on a scale of 0.0 to 1.0. A grade of 1.0 means that the objective was fully achieved. Individual key results are graded and then, using a rough average, correspondingly the objective is graded. This is “rough” because sometimes there’s weighting of different key results. Sometimes key results can be either 0 or 1. If the key result was to “launch a new widget marketing campaign” the end result could be that it was launched or it was not.
Other key results can be more granular. If the key result is to “launch six new features” and only three new features were launched, the OKR would be graded as 0.5 since only half where delivered. Grading in this manner is not a science but it’s important to be honest, transparent, and consistent with the grading process. The following scale can be used to assist in OKR grading:
|OKR Grading Scale|
|Stretch target that feels nearly impossible to achieve||What we hope to achieve; difficult but attainable||Almost what we hope to achieve, but not quite||What we know what we can achieve with minimal effort||No progress; an unacceptable result that requires explanation|
When grading OKRs some things to consider are:
- The sweet spot for OKRs is somewhere in the 60-70% range. Scoring lower may mean that the organization is not achieving enough of what it could be. Scoring higher may mean aspirational goals are not being set high enough. For example, at Google, their expectation is to get an average of 0.6 to 0.7 across all OKRs. If your organizations is new to OKRs, “failing” to hit goals set at 1.0 can be uncomfortable.
- OKRs are not performance evaluations. OKRs are not a comprehensive means to evaluate an individual (or an organization). Rather, they can be used as a summary of what an individual has worked on in the last period of time and can show contributions and impact to larger organizational OKRs.
- Publicly grade organizational OKRs. Organizational OKRs should typically be shared and graded annually in addition to quarterly. In a company-wide meeting at the start of the year, grades for prior OKRs and new OKRs should be shared for the year and upcoming quarter. Then it is recommended to meet every quarter to review grades and set new OKRs. At these meetings, the owner for each OKR (usually the relevant team leader) explains the grade and any adjustments for the upcoming quarter.
- Check in throughout the quarter. Before assigning a final grade, it is helpful to have a mid-quarter check-in for all OKRs to give individuals and teams a sense of where they are. Just like an end of quarter check-in can be used to prepare ahead of the final grading.
Goals that have not been achieved in the previous cycle should be reevaluated so they can be included in the next cycle or, if not necessary any more, discarded.
There are various ways and tools that can be used to assist in developing and tracking of your OKRs. The simplest, however, may be through simple spreadsheet or scorecard. It is recommended to see what current tools the organization has before proceeding down any path.
Updated: September 22, 2017