Great news! My son’s team finally won a soccer tournament after 3 years! On a more related note to this blog, I’m pleased to share the latest preview of my upcoming book. The book will feature case studies detailing real-world stories with OKRs. My last blog features a draft of chapter 1. This post previews chapters 2 and 3. Before diving into chapters 2 and 3, let’s revisit the definition of OKRs. 

OKRs Defined

OKRs is a critical thinking framework and ongoing discipline that seeks to ensure employees work together, focusing their efforts to make measurable contributions that drive the company forward.

Chapter 2 Preview: Examples of OKRs

The best way to learn the language of OKRs is to see some good examples of OKRs that follow best practices. I’d love to include a dozen examples of OKRs. It’s easy to find examples of OKRs from Sales and Marketing. So, to make this a bit more interesting, let’s look at examples from other teams. Teams like Business Operations, People Operations, and Engineering.

Example 1: Business Operations

This set of OKRs includes 1 objective (O) and 3 key results (KRs):

O: Create a metrics-driven culture where everyone can connect and quantify their contributions at work.
KR: 20 team leaders define 3 objectives, each with a key result associated with a company-level goal in a shared Google Doc by end of December.
KR: CEO-approved OKRs for 20 teams by Jan 15.
KR: Progress documented on all KRs including explanations in cases where no progress was made by end of Q1 2015.

Example 2: People Operations

This set of OKRs includes 2 Os. The first objective has 2 KRs and the other objective has 3 KRs:

O1: Performance Management: Complete a review process for every individual that is not only efficient, but also enables everyone to do a better job.
KR: 40 performance reviews completed and delivered by end of June.
KR: Get at least 1 positive documented response from 10 employees to the open question “Describe a specific. example where the performance management (review/OKRs) enabled you to do a better job by end of July.

O2: Employee Satisfaction: Measure and Improve Employee Satisfaction.
KR: Improve 1-question employee satisfaction score by 5% compared to June 2014 baseline by end of Q3.
KR: Improve 1-question Employee Net Promoter Score by 5% as compared to June 2014 baseline by end of Q3.
KR: Improve “How likely you are to be working here” survey score by 5% as compared to June 2014 baseline by end of Q3.

Example 3: Engineering Team

While the Engineering team had several objectives, I’m including the most interesting objective and its 3 KRs here as an example.

O: Sales Support: Measure and improve engineering’s support of sales.
KR: Document all engineering engagements with $100k+ prospects.
KR: Obtain a baseline on the technical pass rate metric by end of Q2.
KR: 60% of account managers in 1 region trained and certified on product X selling technique by end of Q2.

Chapter 3 Preview: Types of OKRs

With the examples of OKRs in mind, we’re ready to zoom in on Key Results. I spend most of my OKRs coaching time defining and refining Key Results. This is something I LOVE TO DO! It’s always surprising to me how valuable it is to define measurable results to define achievement of an Objective. My clients find it useful to know that Key Results can take three distinct forms. These include: 1) baseline metric, 2) target metric, and 3) milestone.

1: Baseline Metric Key Result

An Accounts Payable department in the early stages of deploying OKRs realizes that the number of invoices received is a key indicator. The number of invoices can help measure the company’s efficiency and scalability objective to reduce G&A as a percent of revenue. However, no one is currently tracking the number of invoices processed. So, a key result takes the form:

KR: Count and report the number of invoices received each month in Q4.

This is a baseline metric key result. It is considered very important to track, but there’s no historical data available. In this case, setting a target value for the key result is generally not required. In general, targets should only be set once we establish a baseline.

2: Target Metric Key Result

There are three types of target key metric results: 1) positive target metric, 2) negative target metric, and 3) threshold target metric.

2.1 Positive target metric

The VP of People Operations has 40 total employees on her team. Since everyone is required to complete and document performance reviews by the end of June, a key result takes the form:

KR: 40 reviews completed and delivered by end of June.

This is a target metric since it specifies a numerical value target. It is a positive target metric since it is good to go in a positive direction. That is, 39 is better than 1.

2.2 Negative target metric

The VP of Accounting produces financial statements each quarter with a total of just 12 material errors over the last 10 quarters. This translates to an average of 1.2 material errors per quarter. The CFO feels 1 is a good target and 2 errors is acceptable. However, 3 or more material errors in one quarter is not acceptable. The VP wants to ensure reports meets accurate standards, so a key result takes the form:

KR: No more than 2 material errors in quarterly financial statements in FY 2015

This is a target metric since it specifies a numerical value target. It is a negative target metric since it is good to go in a negative direction. That is, 0 is better than 2.

2.3 Threshold target metric

The VP of a consulting team provides services billed on an hourly basis. The VP wants her team to be billing at least 60% of their time each month in order to be cost-effective. She calls this metric “consulting utilization rate.” She knows that her team needs time for internal meetings and non-billable activities. Once a utilization rate surpasses 90%, it negatively impacts job satisfaction. While it’s great to be below 60%, it’s bad to go over 90%. So the key result takes the form:

KR: Maintain a monthly consultant utilization rate between 60% and 90% in Q4.

This is a threshold target metric. It specifies an acceptable low numerical value and an acceptable high numerical value that serve as thresholds for defining the metric’s target range.

3: Milestone Key Result

The VP of Sales is responsible for opening a new office in Australia to establish a presence in the region. The VP is not responsible for opening multiple offices, only one. The key result takes the form:

KR: Open a branch office in Australia with at least one full-time staff member at the office during business hours by end of Q4.
This is a milestone. It cannot be set up as a metric. Consider breaking milestone key results into smaller steps such as:

• Sign lease to secure office space
• Hire full time office manager
• Translate product pricing to Australian currency
• Etc.

Anyone have a key result that doesn’t fit into one of the 3 types detailed in this blog? Interested in learning more about how to best deploy OKRs? Request an OKRs Book preview.

Update for 2016

I once planned this OKRs book would hit the market in 2015. However, the book got delayed. Wiley published my OKRs book (co-authored with Paul Niven) in September, 2016. Objectives and Key Results: Driving Focus, Alignment, and Engagement with OKRs is now available on Amazon!