Clear Review has joined Advanced - Discover our full suite of powerful and innovative people management solutions

Find out more
Back to Overview

OKR Craze: The Ultimate Practical Guide for HR

OK Rs beach

If we had a pen­ny for every time a HR per­son came to us and said Our CEO read Mea­sure what mat­ters’ by John Doerr and wants us to start using OKRs” we wouldn’t even need to be in the soft­ware busi­ness. Clear Review could retire to sit on the beach and sip on margaritas.

Doing a quick search on Google­Trends real­ly brings this OKR boom to life. Over the last five years, search fre­quen­cy for OKR’, has been climb­ing steadi­ly – worldwide.

So it’s no sur­prise that HR is being asked to imple­ment this new way of objec­tive set­ting by their senior lead­ers. This arti­cle will break down all the basics of OKR’s so you can con­fi­dent­ly assess and imple­ment a new way of objec­tive set­ting in your organization. 

Back­ground and under­stand­ing the basics:

What does OKR stand for?

OKR stands for Objec­tives and Key Results. Objec­tives are over­all goals and Key Results are the mea­sure­ments or mile­stones you need to achieve in order to hit the over­all objec­tive. It’s a way to break down a larg­er goal into its small­er components.


Objec­tive: Imple­ment OKRs into our organization 

Key Results:

1. Research and under­stand how OKRs work

2. Test OKRs in HR team for 1 month

3. Find tech­nol­o­gy that sup­ports OKR set­ting and tracking 

4. Train and roll out to the wider organization

Who invent­ed OKRs?

OKRs were invent­ed by Andy Grove, co-founder of Intel in the 1970s using the base mod­el of MBOs (man­age­ment by objec­tives, cre­at­ed by Peter Druck­er in 1954). It wasn’t how­ev­er until the book Mea­sure What Mat­ters’ by John Doerr, pub­lished in 2017, that OKRs real­ly became main­stream. Doerr him­self was taught the OKR method­ol­o­gy by Grove and was the per­son who intro­duced it to Google.

What is the point of OKRs?

As with any goal or objec­tive set­ting method­ol­o­gy, the point of OKRs is to be able to increase the chances of achiev­ing what mat­ters to your orga­ni­za­tion. OKRs are par­tic­u­lar­ly strong at focus­ing and align­ing peo­ple as well as intro­duc­ing — right at the set­ting stage— a clear way to mea­sure success. 

What is the OKR methodology?

At the most basic lev­el, OKR method­ol­o­gy breaks down large objec­tives into mea­sur­able mile­stones. How­ev­er, there are three things that make OKRs dif­fer­ent from nor­mal’ objec­tive setting. 

  1. They need to be set and reviewed reg­u­lar­ly, Doerr sug­gests month­ly or quar­ter­ly at least.
  2. OKRs should be most­ly divorced from com­pen­sa­tion with the focus being on dri­ving per­for­mance itself, rather than on the mea­sure­ment of per­for­mance to dri­ve reward.
  3. OKRs should be aligned and trans­late com­pa­ny goals into team and indi­vid­ual goals.

What is the dif­fer­ence between KPI and OKR?

KPI or Key Per­for­mance Indi­ca­tor is usu­al­ly a pure mea­sure that is used for fore­cast­ing. An exam­ple of a sales KPI might be Num­ber of Meet­ings Sched­uled’ which is an indi­ca­tor of future rev­enue. KPIs tend to not explic­it­ly attach them­selves to the over­all objec­tive Rev­enue goal’ and are used to mea­sure rather than to set out actions. 

OKRs start with your Rev­enue goal as the objec­tive and then set Key Results, which would be the actions or mile­stones that need to hap­pen to reach that goal. OKRs are KPIs with a wider context.

Set­ting and mea­sur­ing OKRs:

How do you write good objec­tives and key results?

A sim­ple struc­ture should help with writ­ing good objec­tives and key results. There are 4 key areas to con­sid­er when writ­ing objec­tives and key results.

  1. Objec­tive – This is the goal itself. It should be easy to under­stand and should feed into an over­all com­pa­ny or team objective.
  2. Key Results – Key results come in two forms. They are either deliv­er­ables or mile­stones. A deliv­er­able is some­thing that needs to be done/​delivered in order to reach the objec­tive and a mile­stone is an indi­ca­tor of progress.
  3. Dead­lines – OKRs have to be time-bound. Most orga­ni­za­tions that we know set and com­plete their OKRs on a quar­ter­ly basis, so your dead­lines for each Key Result and the over­all OKR need to reflect that. You can choose if you want one dead­line for the over­all OKR or if you would like to add in dead­lines for Key Results too.
  4. Col­lab­o­ra­tors – Is this goal some­thing you can achieve your­self? Writ­ing down the people/​departments that you need to involve to achieve the OKR is essen­tial at the plan­ning stage. This helps to cre­ate trans­paren­cy and buy-in ahead of start­ing on the objective.

How mea­sur­able should OKRs be?

If at the end of the month or quar­ter (when you review your OKRs) you aren’t sure if the OKR was achieved, your OKR was not spe­cif­ic enough. In the cre­ation stage ensure that you know how you will be able to mea­sure the suc­cess of both the objec­tive and the key results. There are cas­es where objec­tives might not be mea­sur­able so this means the key results have to be, either in mile­stone or deliv­er­able forms.

How many OKRs should you have?

OKRs are there to help organ­i­sa­tions focus their efforts in short 1 – 3 month sprints. John Doerr rec­om­mends to keep things sim­ple and to have 5 – 7 objec­tives with 3 – 5 key results. More could mean you’re either bit­ing off too much or are being too gran­u­lar, and less could mean that your objec­tives are not spe­cif­ic enough.

Team vs indi­vid­ual objectives?

If you are tru­ly rolling out OKRs on a com­pa­ny-wide lev­el, then there will be three lev­els of objec­tives to con­sid­er — orga­ni­za­tion wide, team-wide and indi­vid­ual. Some teams may not need indi­vid­ual OKRs as they are the col­lab­o­ra­tors on the key results. The need for indi­vid­ual OKRs is often dic­tat­ed by the type of work the per­son does.

HR spe­cif­ic process­es and OKRs:

How do I keep peo­ple account­able when it comes to their OKRs?

OKRs should be part of a wider con­tin­u­ous per­for­mance man­age­ment approach and rep­re­sent actu­al pri­or­i­ties. If you set your OKRs well, they will become a part of every­day work. OKRs shouldn’t be an end of quar­ter tick-box exer­cise, they should be dis­cussed reg­u­lar­ly in check-ins so you can iden­ti­fy block­ers and also re-eval­u­ate if they are still rel­e­vant. Using tech­nol­o­gy to track progress and gain vis­i­bil­i­ty will increase accountability.

Last­ly ensur­ing that senior lead­ers buy into the method­ol­o­gy, fol­low-up and respect the OKRs that are set will inevitably increase the take-up and account­abil­i­ty across the organization.

What is the best OKR software? 

Don’t get car­ried away with the pseu­do-sci­ence of OKR-spe­cif­ic soft­ware. The ben­e­fits of OKRs come from set­ting clear objec­tives and actu­al­ly being able to take action and mea­sure progress. 

We like Clear Review for the objec­tive set­ting func­tion­al­i­ty, but there are lots of tech­nolo­gies out there you can use — Word, Trel­lo or more spe­cialised tech. Remem­ber the best tech­nol­o­gy is a tech­nol­o­gy that peo­ple want to use. It needs to be sim­ple, some­thing that you can log into and just use and one that is flex­i­ble enough to meet what your teams need. 

Book a free demo of Clear Review

Should OKRs be tied to pay and reward?

Extrin­sic moti­va­tors i.e. pay, have his­tor­i­cal­ly tak­en prece­dence in work­places because they appear eas­i­er to con­trol and influ­ence. Dan­gle a car­rot of more pay and prospects if peo­ple per­form well and pro­duc­tiv­i­ty should increase. Right? Sad­ly not. Research (and bit­ter expe­ri­ence) has shown us that this rarely happens.

We need to look to intrin­sic moti­va­tors. Dan Pink’s 2010 best-sell­ing book Dri­ve” set out an approach to intrin­sic moti­va­tion based on three elements:

  • Auton­o­my – the desire to direct our own lives
  • Mas­tery – the urge to get bet­ter at some­thing that matters
  • Pur­pose – the yearn­ing to do what we do in ser­vice of some­thing larg­er than ourselves

Increas­ing these will be far more effec­tive than tying OKRs to Pay and Reward. Luck­i­ly OKRs them­selves already work quite well to those 3 ele­ments and you can use OKRs them­selves to cre­ate more auton­o­my, mas­tery and purpose.

eBook: Pay and Reward without Annual Appraisals

Should we cas­cade down or align up objectives?

When look­ing at OKR method­ol­o­gy you can eas­i­ly think that the answer is cas­cade down. In real­i­ty, OKRs are more of an align up’ sys­tem where the com­pa­ny is trans­par­ent about its objec­tives to teams. Teams, there­fore, cre­ate OKRs to con­tribute to the com­pa­ny objec­tives and indi­vid­u­als con­tribute to the team. Indi­vid­ual team/​com­pa­ny cir­cum­stances will have to be tak­en into con­sid­er­a­tion here, how­ev­er, it real­ly doesn’t mat­ter if it’s top-down, bot­tom-up or side­ways as long as it works for what you need.

Who OKRs are not suit­able for?

One thing that OKRs are not is a task list. OKRs are gen­er­al­ly more suit­ed to peo­ple whose work is more project or cam­paign-based. Think marketing/​cre­ative teams, prod­uct, engi­neer­ing. If your work is a nev­er-end­ing ham­ster wheel of tasks i.e. inputting data into a sys­tem OKRs might not be as appropriate.

You might set sales tar­gets for the quar­ter and break them down into mile­stones per month but that is hard­ly an action­able objec­tive. It is an out­come rather than an action. In sales, you could break this down to talk to x peo­ple’, book x demos’ etc. But the last thing that you want is to cre­ate arbi­trary OKRs for indi­vid­u­als just because.

In our expe­ri­ence, it is dif­fer­ent in many messier’ (than tech) sec­tors such as hos­pi­tal­i­ty, retail, pro­fes­sion­al ser­vices and the pub­lic sec­tor. OKRs adop­tion in these sec­tors has been more lim­it­ed. And, we find, where they have adopt­ed OKRs”, they have done so with a sleight of hand, using a more lib­er­al def­i­n­i­tion of OKRs for the depart­ments that do not lend them­selves to total objec­tiv­i­ty. We applaud this nuanced approach; per­for­mance man­age­ment is an art, not a sci­ence, and we think it is appro­pri­ate for a com­pa­ny to fit a method­ol­o­gy to their modus operan­di and com­pa­ny culture.

Want to see how OKRs work in Clear Review?

We incorporate OKRs into a wider performance management system that includes feedback, coaching conversations and engagement.

Schedule a Demo
How managers can get visibility when their teams are remote
Visibility on performance is an essential part of performance management. But with more teams working remotely, productivity, performance and morale can be low. How can HR and managers get more visibility on remote employees?
Read article