Anatomy of an OKR

Our twins came home from their first day of 7th grade last week excited to announce that this year they would get to dissect something in science class. They told my wife and I that while last year the class used sharks, evidently the smell was so overpowering that this year sharks were probably off the table (literally and figuratively). Still - they were pretty sure they were going to get to dissect “some kind of fish.” I failed to understand how that would be an improvement for the aroma, but I didn’t want to dampen their enthusiasm. So, in honor of this excited group of future doctors and vets and scientists, let's all hold our noses, put on our rubber gloves, and explore the inner workings of the OKR.

This post will be split into two pieces. In the first we’re going to share two examples, and discuss how Objectives and Key Results work best for us. While there’s a lot of content available on how to write effective OKRs, I’ll try to focus on our specific learnings and best practices from the last few years.

After reading this, be sure to come back in about a week for part two, in which I’ll discuss the other elements which I’ve found critical to complement our Objectives and Key Results and allow us to best activate the OKRs’ superpowers.

Throughout these two articles we will refer to two OKRs - one aspirational and one committed - as examples.

Aspirational OKR

Aligns To:	Build an intuitive platform which maximizes monthly engagement
Team:	Marketing, Customer Support, Account Success, Software Development	Aspirational
Objective:	Increase average monthly activity per user by 15% for Q4 vs. Q4 in Prior Year	Target Date
Key Result 1	Publish at least one blog post per month highlighting under-utilized features (Marketing)	12/31/22
Key Result 2	Launch in-app guides providing application walk-throughs and identifying key features to the users for at least 50% of existing enterprise customers (Customer Support)	6/30/22
Key Result 3	Initiate email outreach sequence to at least 25% of users on the platform focused on driving usage (Account Success)	9/30/22
Key Result 4	Launch to production user-experience improvements to reduce steps and friction in ordering process (Software Development)	6/30/22

Committed OKR

Aligns To:	Improve Department Efficiency
Team:	Reduce weekly time for the Accounts Payable run by at least 45 minutes by converting entirely from check to electronic ACH payments	Committed
Objective:	Increase average monthly activity per user by 15% for Q4 vs. Q4 in Prior Year	Target Date
Key Result 1	Deliver written communication on the transition to vendors and collect payment information	1/31/22
Key Result 2	Install software required for automated emailed remittance advice	1/31/22
Key Result 3	Load customer payment information into banking platform	2/28/22
Key Result 4	Beta test electronic payments with limited number of invoices	3/15/22
Key Result 5	Define and document separation of duties between setting up and releasing payments	3/31/22

Objectives:

As I help our team create their OKRs each quarter, the two questions I expect to be answered within an Objective are:

What is the benefit you are trying to create?
How will you know when you get there?

When I review our departments’ first drafts of Objectives each quarter, one of the common issues I encounter is that the Objective describes what the team wants to do, not what they want to achieve by the end of the period. In other words, they are Key Results masquerading as Objectives. The roadmap below is illustrative of the process I use when working with our teams to move from the weak early draft to a well-defined OKR.

Weak	Better	Best
Communicate platform benefits to users	Increase user activity	Increase average monthly activity per user by 15% for Q4 vs. Q4 in Prior Year

In the comparison above, the Weak Objective offers a soft and unmeasurable activity with the hope of a result. Drafts like this aren’t wrong - this team member is correct in hypothesizing that increasing awareness of the benefits of the platform would have a positive impact on user engagement (and, as a result, revenue). But this draft describes the “how”, not the “what” of the activity.

In the Better Objective, the writer identifies the outcome of communicating the platform benefits. A communication campaign to existing users isn’t a result in itself - it is a tool to accomplish something, in this case, to increase user activity.

Moving from the second to the final stage requires adding more of the specifics of the benefit that you’re seeking. Without clearly identifying what “done” is for the OKR, it’s difficult to know when you’ve reached your destination. David Bowie once said “I don’t know where I’m going from here, but I promise it won’t be boring,” which is probably an exciting way to live life but a bad way to set quarterly business targets. Instead, the achievement of an Objective should be clear and obvious even to someone outside the project.

The Best Objective answers this second question by specifically defining the goal of 15% year over year growth in per account activity. Keep in mind that while quantitative targets can be the easiest way to eliminate ambiguity, qualitative goals that capture clearly understood milestones can also be effective.

Key Results:

Similarly, I repeat the same two guiding principles each time I work with someone on their key results.

Key results need to be specific and measurable
If all of the key results are completed, the objective should be achieved

Our experience has been that Key Results take the longest time to get right, especially in the early days of implementing OKRs. The “what” and the “why” are often intuitive, and frequently build upon a prior period’s work as part of a longer-term goal. But we typically draft, throw out, re-draft, reflect, and draft again while trying to finalize the “how.”

While Key Results defined by quantifiable activity are often clear, qualitative activities can be challenging to make measurable. Just like describing your work experiences on a resume, the strongest Key Results signal measurable activities. The table below has some of the action verbs I see in the first draft of OKRs alongside my recommendations for stronger alternatives.

First Draft	Better	Why
Create	Document	Circulated written procedures or results are clearer deliverables
Review	Implement	Stronger commitment to change
Discuss	Submit	Meetings and brainstorming sessions are merely tools to reach an objective moment of delivery

Even with a set of measurable or quantifiable key results, it is often difficult to feel confident that they will take you to your targeted objective. With certain projects, the incremental steps of a project plan often are easily translated to key results. For example, the conversion of the weekly payables process discussed previously in the Committed OKR has easily defined requisite activities. When we completed these key results, we knew we’d end up on a Friday hitting “send” within our banking platform to deliver electronic payments.

In contrast, we have found a greater challenge when identifying the complete set of Key Results required to reach a quantitative improvement in a KPI. In the Aspirational OKR, we were targeting previously unreached levels of performance, for which the required activities weren’t always obvious up front.

To identify the most likely Key Results to take us to our goal, we started by identifying the drivers of underutilization in our platform. We applied judgment to qualitative and quantitative data from a number of sources to understand why our users elected for a different tool than our application to solve their immediate needs. This included conducting customer interviews, comparing variances in engagement rates among segments of users, and reviewing data revealing at which step orders initiated were abandoned before completion. While we believed these resulting key results were identified to specifically address those issues and drive improvement in our identified KPI of activity per user, we acknowledged that we lacked assurance that completing the Key Results would take us to the Objective.

Your Turn!

Start with the Objective - Of the two eponymous parts of the OKR, focus first on getting the “what” correct. If you are consistently answering the two identified questions for your Objectives, you at least will be setting defined goals that are clear to your team and easy to share across the organization.
Define your Checkpoints - if the Objective is your destination, the Key Results are your directions. Imagine life before Google Maps (easier for some of us than others). We’ve all had that friend who told you about some great new restaurant, but couldn’t remember street names and offered only vague and easily misunderstood landmarks to try to guide you there. Suddenly you’re eating dinner at 10:30 because you’ve been driving circles just to find the best undiscovered Korean-Cuban fusion in the city. Don’t be that friend. Set specific and measurable Key Results.
Learn to Live with Uncertainty - Frodo didn’t know the way to Mordor when he left the Shire and you’re unlikely to perfectly identify the path you must take to reach your stretch goals. Do not let this paralyze you from starting your journey to seek meaningful change and improvements. Instead, build well defined Key Results by relying on the available data and your best judgment, and then adjust along the way. Remain transparent with your team about the changes (even better - let them help you identify the change in your roadmap) and you will find yourself much closer to your goal than you thought you could ever be.

Finally, if the smell of formaldehyde hasn’t made your eyes water yet, join me in about a week to learn about some of the less heralded, but critically valuable, parts of the OKR anatomy.