The OKR (Objectives and Key Results) framework is an approach used by companies that sets goals to improve alignment, engagement, and performance. OKRs became well-known after being used by Google and Intel and are now widely accepted across various industries, especially SaaS businesses.
The OKR framework allows teams to set goals in well-defined focus areas based on measurable results, and use them to track their progress toward those goals. The biggest benefit is having a transparent view of your progress by doing regular check-ins and being aligned on the overall direction.
Let’s break it down. The acronym OKR stands for Objectives and Key Results and includes two main components: an Objective and Key Results associated with that objective.
An Objective is a qualitative statement that defines the desired outcome.
For example, an objective of the customer success team might be to improve customer satisfaction.
Key Results are quantifiable milestones that track the achievement of the Objective.
For example, the key results for the objective described above might be “Reduce Average Response Time to 2 hours” and “Decrease Customer Churn Rate by 20%.”
Combining a qualitative Objective and quantitative Key Results keeps you focused on measurable results and makes tracking progress easier.
A KPI (Key Performance Indicator) is a measurable value that helps a company evaluate their success and make sure they are meeting their targets.
So how do KPIs differ from OKRs? Both OKRs and KPIs are used to measure performance, but their purpose is different.OKRs are used to define and work towards ambitious company goals by launching strategic initiatives that make that possible. KPIs, on the other hand, are used to monitor ongoing performance and make sure your business results are on track.
You would use KPIs to measure the effectiveness of a project. You would use OKRs to know when you have achieved or made progress on a larger company goal. By integrating both, you can get a comprehensive view of performance and progress.
If your goal as a company is to be agile, using OKRs can be a positive change. With OKRs, SaaS businesses can set clear goals and quickly adapt to changes while trying to achieve them. For example, a company may want to improve customer retention, accelerate product development, or expand market reach. Using OKRs gives them a structured approach they can use to work towards those goals.
The OKR framework is based on teams working together towards a common goal. Defining OKRs connects teams and allows team members from different departments to collaborate on a specific mission. This encourages cross-functional collaboration and creates a horizontal workflow instead of operating in traditional team silos. This cross-functional collaboration is a key aspect of how OKRs can unite efforts across the organization.
OKRs limit the number of focus areas and encourage companies to prioritize what really matters. Less is more when it comes to setting objectives. This gives teams more space to focus on high-impact initiatives, helps them prioritize resources, and generally results in better results at the end of the year.
Regular tracking and reporting on OKR progress makes it easier to measure performance, ensuring that individuals and teams remain accountable for their contributions. Having goal owners fosters a sense of ownership and ensures that there is a clear point of responsibility, driving commitment to achieving the set objectives and promoting proactive problem-solving.
OKRs promote out-of-the-box thinking. Quarterly planning under the OKR framework becomes more focused and mindful, no matter if your focus is on developing new features or adjusting pricing strategies. Teams do not work in isolation but come together to align on key OKRs and work towards them instead. That kind of alignment allows for seamless quarterly planning and helps identify the things to focus on in the upcoming quarters.
To determine if the OKRs are the right choice for your team, try evaluating key factors related to organizational readiness and capability.
The OKR Framework involves both top-down and bottom-up goal creation. It starts with the organization setting a clear mission and ultimate goal.
1. Establishing the Mission and Vision
First, the company defines an ultimate goal and mission. This gives clarity to subsequent planning and goal-setting activities and provides a clear direction going forward.
2. Developing Long-Term Strategy
Next is creating a long-term strategy with strategic pillars, which essentially lay out a plan for the organization’s direction in the next 3-5 years. The pillars are broader company goals and priorities that will help navigate the company toward its mission.
3. Setting Annual OKRs
The strategy is then broken down into annual OKRs, which are the priorities that need to be achieved this year to successfully implement the long-term plan. They are specific, measurable goals that align with the strategic pillars and serve as a roadmap for achieving the mission the company has set in the first step.
4. Defining Quarterly OKRs
Next, teams define quarterly OKRs that contribute to achieving annual OKRs. Each quarterly OKR has one or several initiatives with actionable steps the teams focus on. Each OKR has a goal owner who takes accountability and ownership of that goal and leads the planning on how to reach it.
5. Aligning Teams
Once the goals are set, it’s important to ensure that all teams involved fully understand the objectives and the reasoning behind them. Teams must be aligned in terms of expected outcomes and their role and contribution to achieving those goals. To maintain that alignment and focus, teams must perform regular check-ins and updates that keep everyone on the same page.
6. Implementing Initiatives and Action Plans
Finally, teams define several quarterly initiatives and action plans to work toward their quarterly OKRs. Initiatives have to have clear and detailed tasks and steps that must be taken to achieve the OKR in question. To stay on track, goal owners must maintain regular communication with team members involved, perform monitoring and implement potential adjustments to the strategy.
A couple of years ago, our go-to success measuring mechanism was using KPIs to track the success of individual metric values.
Once we committed to using the OKR framework at Databox, we strategically thought out our mission, which is to “help millions of businesses leverage data to improve their performance.” and then aligned our OKRs to that.
In 2024, we set 4 main OKRs:
Acquisition: Grow customer acquisition rate in our core customer segment (Partners, MBs) and begin to establish ourselves as the market share leader of BI for MBs.
Upgrades: Create more value for and improve the monetization of our core customers.
Retention: Improve customer retention through product adoption, improved (internal and external) training, and reduced bugs/product confusion.
A-Team: Foster a high-performing team culture through activities that impact the retention of our employees.
We used an acronym, AURA, to help the team remember and connect with our OKRs. Aura is defined as “part of a hidden anatomy that reflects the state of being and health,” which we believe is a perfect way to drive commitment and understanding of the importance of these concepts with the team.
We decided to focus on three user-oriented metrics, which help us prioritize and decide on projects that align with our OKRs. Whenever we evaluate new projects, we consider which OKR they will support and how they contribute to our overall goals. Our fourth OKR, A-Team, focuses on our people rather than direct business success. It highlights the importance of creating a high-performance environment, retaining top talent, and ensuring that our team is motivated and aligned with our objectives, all of which are crucial for maintaining a strong company culture.
These 4 objectives support our company’s overarching mission and build transparency and alignment as they spread the idea of working towards the same purpose across organizations. Inside each OKR, we have determined primary and secondary key results and owners who are responsible for driving results and reporting on progress in these areas.
The key to successfully using OKRs is for all levels of the company to work towards the same goals. To make sure we’re consistently driving progress toward our goals, we’ve established a regular cadence of meetings and reviews:
This meeting schedule helps us stay focused and agile. A source of inspiration through this journey included the book Measure What Matters by John Doerr, which offers valuable insights and best practices for optimizing the implementation of OKRs in any organization.
In the past, we noticed our teams sometimes operated in silos, focusing on individual KPIs without a cohesive direction. By shifting to OKRs, we’ve unified our efforts around shared objectives, ensuring that every team’s goals contribute to the broader company mission. To achieve the goals we set, our teams must sync frequently, collaborate effectively, and rely on each other for support. OKRs encourage this high level of coordination and ensure that every individual’s goals support the company’s OKRs, providing clarity about the value they bring to the company and directly contributing to our business success.
Implementing OKRs has been a valuable experience for Databox, but it also had its own set of challenges. As we’ve grown and refined our approach, we’ve learned important lessons on how to optimize the framework for our needs.
Here are a couple of main takeaways.
When setting the company’s direction, it’s best to keep the decision-making process lean. Too many people involved can complicate things, so it’s better to have a select few steering the company’s overall strategy—like a CEO or founder.
Setting fewer OKRs can often be more effective. In our case, after an ambitious start in 2023, we quickly decided to streamline our focus. In 2024, we’re concentrating on three metrics that impact our users and one that impacts our company. This narrowed focus allows us to align projects more closely with our objectives. We always ask ourselves: Which OKR does this project support? We’re confident our execution of OKRs will be even better in 2025.
To ensure progress, we hold monthly alignment and planning meetings to consistently report on whether our projects are on track and discuss the activities planned for the following month. Ongoing reporting keeps everyone accountable and prevents any surprises when reviewing the numbers at the end of the quarter.
At Databox, adopting the OKR framework has significantly transformed how we set and achieve our goals. Focusing on aligning our GTM and Product & Engineering teams opened up more opportunities for cross-team collaboration and allowed us to make our OKRs actionable and achievable. It also helped us prioritize projects that drive meaningful progress for Databox.
This alignment can help us be more successful and enable us to keep making data-driven decisions that benefit the entire organization.
Content writer at Databox
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