Understanding OKRs in Depth

Objectives and Key Results (OKRs) are a popular framework for teams to plan and measure their success. It starts with leaders at all levels setting high-level, inspiring goals called “objectives.”

Next, teams identify their users and the behavioral changes they aim to achieve. These measurable outcomes are called “key results,” which assess how well teams are meeting their objectives.

This approach emphasizes the impact of work over micromanaging daily tasks. It connects top-down strategy with bottom-up commitments to intermediate goals, focusing on the value of tasks rather than their specifics.

However, where OKRs often fall short is at the individual contributor level. Requesting employees to set their own objectives and key results can lead to one of two issues:

• Binary Goals: Employees create measurable but superficial goals that don’t reflect meaningful growth or improvement.
• Safe Targets: Employees may opt for easily achievable targets rather than taking risks on more ambitious goals.

In a 2020 Harvard Business Review article, Jeff Gothelf highlighted problems with individual OKRs:

1. Employees often create simple, measurable goals that don’t reflect meaningful growth.
2. They may choose easy targets to ensure success, avoiding more ambitious goals.

Gothelf argues these approaches fail to capture real improvement or encourage risk-taking.

Here is a real life example of what he meant:

In early 2024, I collaborated with a tech startup implementing Objectives and Key Results (OKRs) as their new performance management framework. This transition involved all employees, from leadership to individual contributors, developing personal OKRs aligned with the company’s goals.

To illustrate, one of the software engineers established the following OKR:

Objective: Improve the security of our application by the end of Q2 2024.

Key Results:

1. Identify and fix 10 critical security vulnerabilities.
2. Achieve zero security incidents reported in user feedback after the update.
3. Complete a security audit and implement recommended improvements.

Another example from a customer support team member:

Objective: Enhance customer satisfaction through improved support interactions by the end of Q2 2024.

Key Results:

1. Reduce average response time to customer inquiries by 50%.
2. Achieve a customer satisfaction score of 95% or higher in post-interaction surveys.
3. Implement a new ticketing system that decreases ticket resolution time by 30%.

While these goals appear valid at first glance, they fall short of measuring genuine improvement in the application’s security posture or the quality of customer support.

Effective key results should reflect changes in the target audience’s behavior rather than merely documenting activities.

In both cases, the proposed key results focus on tasks to be completed, not on the value they create. Finishing these tasks doesn’t necessarily show that skills have improved or that the company or customers are benefiting.

Better key results would measure the actual impact of the work, not just the work itself.

To truly measure impact, the OKRs should focus on outcomes that demonstrate tangible improvements in security or customer satisfaction.

For instance, the software engineer’s key results could include metrics on reduced successful breach attempts or increased user trust in the platform’s security. Similarly, the customer support team member could focus on metrics like increased customer retention rates or higher product adoption due to improved support experiences.

The key challenges with implementing effective OKRs lie in setting goals that are truly aligned with the broader product or initiative, rather than just an individual’s own work.