In 1999, a venture capitalist named John Doerr invested $11.8 million dollar in a new company founded by a couple of Stanford grads. He brought with him a management tool that he learned while working at Intel, which he called OKR: Objectives and Key Results. The crux of the method is simple: create a high-level objective, then define no more than five Key Results to implement the objective and measure its success.

Though similar to KPIs and other goal-setting approaches, the OKR method has an important advantage: it connects the day-to-day activities that need to get done in any organization with the higher-level mission that will drive it forward.

The small startup John Doerr invested in back in 1999 was called Google, and today it is worth $280 billion dollars. That immense success, beyond even the wildest projections that its founders made back in 1999, is due at least in part to consistently setting and applying OKR.

Google still uses OKRs across its different sectors and activities. One of their current OKR looks like this:

  • Objective: Design products and services for circularity and reuse materials at their highest environmental and social value.
  • Key Result: 100% of Made by Google products launching in 2022 and every year after will include recycled materials, with a drive to maximize recycled content wherever possible. (Measure What Matters)

This particular objective has only one KR. It’s crystal clear to measure and put in place.

We at Zest started using OKR to hit ambitious targets in growth and revenue development. Everything goes fast in our field and we’re devoted to creating the best solutions for our clients. In the past two years we’ve grown from 18 to 35 employees, signed up hundreds of new users, and grown our audience. We want to go full throttle on creative, reactive solutions that truly help our clients.

We wanted the concrete benefits of SMART and KPIs, but in way that combines greater autonomy for your employees with measurable results.

Setting OKR  is a mental exercise that makes you hone in on what really matters and how you’re going to get it done. We’ve found them to be the best method for collective, ambitious projects that are strategically transverse.

John Doerr explains:

It’s not the sum total of tasks. It’s not the work order for the enterprise. It’s whatever we as a team agree deserves special attention, and it really matters.

This is our step-by-step guide to how to create and implement OKR in your business.

 

Step 1. Articulate your objective (O)

Your objective is your mission: what you want to achieve to move your business forward.

It’s an ambitious goal, and it should fit in one line.

Examples of objectives could be:

  • Launch a free version of our app.
  • Become a market leader in Northern Europe in the field of recruitment and human resources.
  • Create fascinating content that pushes us ahead of our competitors.

 

Step 2. Set 3 to 5 key results (KRs)

Translate your objective into your key results: concrete aims for your team that will let you measure your success.

For instance, if you’re aiming to become a market leader in your field, that could mean signing up 5 new clients and increasing revenue by 30% by the end of the year.

KRs should have a number attached to them. Examples of measures you can use include:

  • a date, e.g. your deadline for a new feature launch
  • a percentage, e.g. a click rate for a marketing email
  • a dollar figure, e.g. your revenue target for the next quarter
  • a subscriber number you want to hit
  • a sales target for a new product

Or any other figure that lets you measure whether this KR has been achieved.

Simon Raybould, an accomplished research scientist, is the author of the best-selling Presentation Genius: 40 Insights From the Science of Presenting. He teaches people how to make effective presentations that hit the right objectives at

Simon explains:

The fewer key results you have, the more effective it is. How you set those key results always depends upon the main objective.

If it’s about a new environmental protection law, success is measured as, everybody adopts the new law. If it’s about best practices, success might be measured as half of them adopt best practices. And then you might refine that as, 75% adopt it this month, 15% adopt it next month, and then the remainder you go talk to individually.

Keep track of the results so you can follow up afterwards.

 

Step 3. Get your team on board

At this stage, it’s critical to communicate KRs clearly to your team members. That lets managers decide how to tackle their work, and team members understand what’s expected of them.

Here, an easy mistake to make is to get bogged down in micromanagement. It’s crucial to give your managers some leeway in how they achieve their KRs. In fact, you can give your teams some say in how to translate their objectives into key results.

 

Step 4. Check in regularly with your team to ensure everyone stays on course

At Zest, we have monthly check-ins with everyone in our team to make sure they’re on track with their KRs. If a manager or team member hits a problem, they can let us know right away and we help them find a solution to move forward.

During the covid-19 pandemic, it’s essential to use the right solution so you can communicate remotely with your managers and employees. Learn more about check-ins with Zest.

 

Step 5. Complete your OKR, review, and reset

In the best case scenario, once you’ve completed your OKR, you achieve your goal. That success should put you ahead of where you were before — maybe further ahead than you thought was possible.

However, we all know that targets can be missed. If you didn’t achieve your goals, this is your chance to review and reset. What went wrong? How can we do better next time? As you use become more familiar with OKR, you’ll become an expert at setting them and deploying them in your organization.

As Simon Raybould explains, “It’s a process, not a product.” And at Zest, we have found that there’s enormous value in moving through the process to achieve your ambitious goals.

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