Objectives and Key Results (OKRs) is a method for defining and keeping track of goals and their outcomes. They organize our goals by breaking them into high-level aspirations (objectives) and the measurable results that determine whether or not we’ve reached them (key results). OKRs are set at the company and individual level to help everyone see how their personal goals align with Obvious' goals, and also see how other people in the organization are working towards the same outcomes from a different perspective.
Objectives are the high level achievements you are shooting for, like:
Grow our audience in the Bitcoin community
Increase engagement with the content we produce
Improve the first time experience of using X (onboarding)
Speed up deploy process for our engineering team
Lower the average wait time for a support ticket response
Develop better networking skills
Key results are the measurable outcomes that define success for the objectives. Key results must be measurable on a scale from 0-10, so for the third example objective, the results might be:
Interview 20 users after they go through the onboarding experience (% completion)
Pick 3 places where we can make the biggest improvements and write specs for all three improvements by July 31 (-2 points for each day late)
Ship those improvements by September 15 (-3 points for each week late)
Increase conversion through signup process by 10%, starting at 50% (% completion)
Every team at Obvious sets their OKRs quarterly, writing them in the first week of the quarter and then evaluating them in the last week. At a startup it’s easy to focus on the immediate problems, but by setting our goals quarterly we ensure that everyone spends some time thinking about the challenges at least 3 months out.
Each team should set 3 to 5 objectives for the quarter, and each objective should have a maximum of 4 key results. Each objective also has a Description explaining what it means and an Alignment that explains how it aligns with company-wide goals. Each key result should explain how it will be scored at the end of the quarter.
OKRS should be talked about every week in 1:1s to consider how each objective is progressing, places where help may be necessary, and how well they reflect current objectives.
OKRs are scored at the end of the quarter, with a score generated for each Key Result. The average of the key results give a score for each Objective, and the average scores of the Objectives gives an overall score for the quarter.
A key result can be scored in any way that makes sense for the result, but there are a few common ways to score a Key Result:
% completion -- if the goal is to do some number of actions, or achieve some number of results (post 3 blog posts or get 300 views), then the Key Result can be scored according to the % that were completed. Posting 2 results out of 3 would earn a score of ⅔ x 10 (because 10 is the total possible number of points) or a 6.7.
Due date -- if a resource should be delivered on a given day, then a fixed number of points can be docked based on how many days late the resource is finished. The penalty should be set with the key result and should vary depending on how time-sensitive the result is. For instance, if my coworker needs me to finish something on time so that they can use it, then there should be a heavy penalty for being late. If the penalty for an item is -2 points per day, then finishing it 3 days late gives a score of 4.
Deviation -- if you are trying to hit a precise target, and do not want to go above or below it, then the score can be based on how far off you were.
The scoring method should be included with each key result. If two people independently evaluated your OKRs at the same time, they should be sure to get the same scores because the criteria for evaluation should be unambiguous.
OKRs should never be used in evaluating employee performance, and should be ambitious. An average score of 7 is ideal, and no one should ever get to a full 10. If they do, their goals were set too low.