Startup Center — OKRs — Objectives and Key Results

While at Google, we lived by the OKRs (Objectives and Key Results). Each quarter, the company would develop the quarterly OKRs. Each department would then align their department OKRs to the company’s. From there, each individual team member would align their OKRs to the department’s. This transparency aligned the entire organization to move in the same direction to accomplish stretch goals.

John Doerr, one of Google’s initial investors, introduced Google to the OKR framework in 1999. John’s goal formula is:

I will ______________ as measured by ____________.

As it relates to the OKR format, this formula would look like this:

I will (Objective) as measured by (this set of key results).

Photo by Estée Janssens on Unsplash

OKRs at a glance

  • Objectives are ambitious and should be very hard to reach (Stretch Goals).
  • Each key result are quantifiable and should be given a grade.
  • OKRs are public within the organization for transparency and accountability.
  • The “sweet spot” for an OKR grade is 60% — 70%.
  • Low grades should be viewed as data to help refine the next OKRs
  • OKRs are not synonymous with employee evaluations.
  • OKRs are not a shared to-do list

Objectives

Objectives are descriptions of what you want to achieve. Pick 3–5 objectives. Too many will defeat the purpose of streamlined communication and alignment.

Key Results

A set of metrics that measure your progress. It is best to have around 3 quantifiable results per objective and they should describe outcomes, not activities.

Below is an example of an organizational OKRs that starts at the company level, then divisional level, then to the employee level. The divisional OKRs will align with the company OKRs and the employee OKRs will align with the divisional OKRs. (Some examples are from okrexamples.co/) With the resourceful startup method, you should have at least one Objective that automates something. For example, “Automate the entire sales process” or “Automate Customer Inquiries when issues are similar.”

Company OKRs Q1, 2018

Objective:

Achieve Record Revenue While Increasing Profit

Key Results:

  • Surpass quarterly revenue goal of $1,000,000
  • Start sales in 2 countries and achieve first quarter revenue totaling over $100K
  • Increase gross profit margin from 54% to > 60%

Objective:

Research and improve customer satisfaction

Key Results:

  • Exceed Net Promoter Score (NPS) of over 8.0
  • Get 1000 survey responses to annual satisfaction survey
  • Conduct 50 phone interviews with top customers
  • Conduct 15 phone interviews with recently churned customers
  • Present an action plan of 10 improvements for next quarter

Objective:

Achieve record metrics in all areas of marketing

Key Results:

  • Surpass 170,000 website visitors
  • Acquirer over 23,000 signups
  • Perform over 7,500 trials

From here, each division will develop their own OKRs based on the company objectives. For example, the sales department would take a company key result “Surpass quarterly revenue goal of $1,000,000” for the objective “Achieve Record Revenue While Increasing Profit “ and make it their objective. Marketing and customer service departments would do the same thing.

— — — — — — –

Sales Department Q1 OKRs

Objective:

Surpass quarterly revenue goal of $1,000,000

Key Results:

  • Increase call to conversion rates from 10% to 15%
  • Decrease average sales cycle from 15 days to 7
  • Participate in 4 national tradeshows and close 20%+ of the leads generated
  • Increase top of lead funnel by 30%

— — — — — — –

Marketing Department Q1 OKRs

Objective:

Surpass 170,000 website visitors

Key Results:

  • Optimize SEM to drive 10% more traffic while decreasing CPC by 5%
  • Write 100 SEO optimized and value filled blog posts and articles
  • Guest post 10 articles on top 5 industry specific publications

— — — — — — –

Customer Service Department Q1 OKRs

Objective:

Exceed Net Promoter Score (NPS) of over 8.0

Key Results:

  • Implement NPS widget on our site and send out one question survey after each closed service request
  • Increase average response time rates for customer inquiries from 1 day to 1 hour
  • Answer every customer phone call 24 hours per day

— — — — — — –

Individual Sale Rep Q1 OKRs

Objective:

Increase call to conversion rates from 10% to 15%

Key Results:

  • Make 80% of the calls during the hours with the highest probability of reaching prospects
  • A/B test call script and language for vms and calls
  • Increase daily call volume by 30%

— — — — — — –

Individual Marketing Rep Q1 OKRs

Objective:

Optimize SEM to drive 10% more traffic while decreasing CPC by 5%

Key Results:

  • Increase CPC for highest converting traffic keywords by 30% and optimize based on time, geo, device, and source
  • Decrease CPC for lower performing keywords by 35% based on time, geo, device and source
  • Add, test and iterate 3 new online advertising sources

— — — — — — –

Individual Customer Service Rep Q1 OKRs

Objective:

Increase average response time rates for customer inquiries from 1 day to 1 hour

Key Results:

  • Assign and respond to 100% of the service requests that come in within my working hours
  • Rotate and work different time zones 2 days a week
  • Develop 3 automations to streamline customer service workflow

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As you can see, this aligns the entire organization from top down. From company to division to employees, this tool dramatically increases communication, transparency and accountability.

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