Objectives and Key Results (OKR)

What objectives and key results (OKR) are

Objectives and key results (الأهداف والنتائج الرئيسة), abbreviated to OKR, are a framework for setting goals. The framework links one clear qualitative objective to a limited number of numerical results, and those results are how anyone can tell whether the objective has been reached.

Two things are joined in the definition. The objective is qualitative: it is stated in words and describes where the organisation wants to arrive. The results are numerical: each one is stated as a figure. The results are attached to the objective for a stated purpose, which is to show whether it has been attained, and the number of results attached to one objective is kept limited.

The two components of OKR

• The objective. It is a sentence that describes what the organisation wants to reach. The sentence has to be understood by whoever reads it, without any explanation from the person who wrote it. A reader who needs the author to say what the objective means has been given a sentence that does not yet meet the condition, because the objective is meant to carry its meaning in the words it is written in.
• The key results. They are three to five results, and each of them can be measured. Every key result has a starting figure, a target figure and a date. The starting figure records where the measure stands when the period begins, the target figure records where it is meant to stand, and the date fixes when the target falls due. Each key result is a single goal, so its wording can also be checked against the conditions of SMART goals.

A hypothetical example shows the two components together. The objective is “A new employee starts work without waiting.” Its key results are these three:

• cut the time taken to set up access permissions from seven days to two days;
• complete employee onboarding for every new hire within the new hire’s first week;
• raise new hires’ satisfaction in the first month survey from 60% to 80%.

The objective in the example is a sentence that a reader understands without explanation: it describes a state in which a new employee does not wait to begin work. Its key results express that state in figures. Access permissions fall from seven days to two, a reduction of five days. In the survey, satisfaction rises from 60% to 80%, an increase of 20 percentage points. Onboarding, for its part, is given the first week as the limit within which it is completed for each person appointed.

How OKR differs from key performance indicators

A key performance indicator measures ongoing performance that the organisation wants to keep within a certain range. It is a measure of health, not a goal for change. The question it answers is whether performance is staying within that range, and the measuring continues for as long as the performance it measures continues.

A key result, by contrast, is tied to an intended shift within a defined period, and it ends when that period ends. Where an indicator watches a level that is meant to hold, a key result names a movement from a starting figure to a target figure, and the key result does not carry on past the period it was set for.

The distinction has a consequence when an organisation decides which of its measures to set as key results and which to keep as indicators. An organisation that turns all of its performance indicators into key results loses the distinction between what it wants to change and what it wants to maintain. Every measure is then set up as something to be moved, including the measures that were only meant to stay within their range.

The mistakes that empty OKR of its meaning

Four mistakes can leave the framework in place while emptying it of its meaning.

• Writing tasks instead of results. It puts an activity where a result should be. “Launching the new system” is a task; the result is what changes after the system has been launched. A task is complete once it has been carried out, whether or not anything changes because of it. A result is the change itself, stated with a starting figure and a target figure.
• Setting too many objectives. It means setting a large number of objectives in the same period, and a large number of objectives in one period means there is no priority at all. A priority is something placed ahead of other things. When every objective is given the same period at the same time, none of them is placed ahead of the rest.
• Linking the figures directly to reward. It gives the person who sets a figure a stake in it. When a financial payment depends on the figure, whoever sets the target has an interest in choosing one they can be sure of reaching. The framework then turns away from the ambition it was set up to serve. The target is still written down and may still be reached, but it was chosen because it was safe to reach rather than because it was ambitious.
• Setting the framework once. It describes a framework with no periodic review during the period. Without that review, the framework becomes a document that is opened at the start of the period and again at its end. Between those two points the key results are not looked at, so nothing that happens during the period is checked against them.

Where OKR sits in performance appraisal

The framework is better kept separate from the appraisal decision and from the reward decision. Its purpose is to direct effort and to reveal early what has stalled, not to rank employees.

Directing effort means pointing the work done during the period at the objective and its key results. Revealing early what has stalled means that a key result which is not moving towards its target figure shows up while the period is still running, at a point where effort can still be redirected towards it. Ranking employees is a different use, because it places people in order against one another.

The separation does not prevent what has been achieved under the framework from being one of the inputs into an appraisal, provided that it is not the only input. The results reached in the period can be taken into account when performance is appraised, alongside the other inputs that the appraisal draws on, but the appraisal does not rest on them alone.

This is an explanation of the concept, not legal advice.