on October 20, 2021 (last modified on November 26, 2021) • 11 minute read
What do Google, Spotify, Twitter, and Walmart have in common?
They all use Objectives and Key Results (OKRs) for strategic goal-setting.
The objective in “OKRs” outlines the vision and communicates the “What.” The KRs are the “how” or the milestones that you need to achieve in order to hit your objective.
OKRs were popularized in the early 2000s after John Doerr, who wrote “Measure What Matters,” introduced them to Google.
These days, thousands of companies are using OKRs throughout their entire business or in individual departments, like sales and marketing.
We reached out and surveyed 29 companies to understand how they are using OKRs.
In fact, 80% of the companies we surveyed have been using OKRs for at least a year.
And, 66.7% are using both OKRs and KPIs in their business.
In this post, we’re taking a closer look at how these companies are using OKRs as well as sharing some best practices.
Given that OKRs were first used and popularized by the tech industry, it is not surprising that SaaS companies are some of the biggest adopters.
Some companies, including PeopleFinderFree, use a combination of OKRs and KPIs across their entire business.
“In terms of OKR reporting, I have implemented the best practice of getting buy-in,” says Eden Cheng. “It helped my organization by learning the method of writing and rolling out OKRs. This practice aided me a lot while utilizing OKRs for departments, executives, and all employees.
I have chosen OKRs for executives, which are mandated to get buy-in from the partakers. This superior practice allowed us to elaborate on why we have chosen OKRs as an effective HR communication method.
Also, we could illustrate how OKRs can promote organizational growth and diligently discussed how my agency and OKRs are aligned to individual OKRs and departments. A final review put forward OKRs as a powerful group to ensure everyone finds them reasonable and worthy.”
This process of rolling out OKRs added an extra layer of transparency and accountability for the team.
“I initially thought that OKRs are a highly intricate management tactic, but these are pretty straightforward to apply,” says Cheng. “It helped my company to set explicit goals and also helped measure the success of those mandated goals. Well, OKRs are a top-notch way of getting my team on track and aligning their work with the company’s fundamental objectives. So, with this formal introduction, I have successfully measured the OKRs’ success and utilized it to my organization’s maximum potential.”
Alicia Hunt of Koan agrees, “Measuring the success of OKRs should be relatively straightforward because when defining key results, it’s important to state these in a manner that’s very black and white.
Typically, a very definitive metric with a number that allows you to clearly identify whether or not the goal was hit.
But the real opportunity for OKR success is incorporating the opportunity for continual improvement. Powered by regular reflection and retrospectives, it helps bring to light what is working and what isn’t. Like any business process, OKRs should remain flexible and fit the culture and values of your organization.”
Similar to Cheng, Hunt also works for a SaaS company that rolled out OKRs throughout the entire business.
She adds, “When working towards strategic initiatives, it’s important to incorporate the OKR process into every team’s regular routines. Throughout the quarter, all employees should regularly measure and share their progress, through confidence scores and descriptive commentary on why they rated that score. At Koan, we call these reflections, where once a week, we have every team member review the progress that was made and share their confidence score on each Key Result. By making goals part of the regular conversation and giving everyone a voice, you’ll see how goals are really progressing, identify issues or concerns earlier, build accountability across your team, and ultimately make better decisions.”
Jimmy Doheny of Demand.io, which builds products for eCommerce businesses, agrees, “At Demand.io, we’ve been using OKRs for years and our approach has evolved as our team has grown. One of the best practices we’ve discovered is to have regular, transparent check-ins throughout the quarterly OKR cycle.
In a weekly meeting, we review both company and personal OKRs to share key updates and any changes. Additionally, this is a time to share challenges or roadblocks, getting the team’s insight towards a solution. This regular check-in keeps the team aligned as business goals evolve throughout the cycle, allowing the team to produce at a higher efficiency.
Then, at the end of the quarter, we have an OKR retrospective meeting to reflect on our biggest achievements and areas for improvement. Often this can be measured numerically (eg – surpassed new client goal by 25%), but it can also be more milestone-driven (eg – launched new product). By also focusing on areas of improvement, this forces us to think critically about areas we did not hit a certain goal, helping identify ways to better craft OKRs in the future.”
For other SaaS companies, they are just using OKRs in one department, such as marketing.
For example, Nicole Kahansky of Hypercontext says, “One thing that’s worked really well for us is keeping our OKRs for the quarter at the top of our team meetings. Oftentimes, OKRs are set and then forgotten. And when they’re forgotten, they’re hard to achieve! By keeping them at the top of our weekly team meeting agenda, we’re able to review them each week and track our progress within the agenda — keeping everything in one, easily accessible place.”
In addition to keeping OKRs top of mind, it is crucial to make them easy to measure.
Kahansky adds, “Setting measurable key results is an important part of tracking your success — after all, that’s what they’re there for. To us, success is reaching 70% of our objective. For example, if we want to double website traffic to 20,000 visitors/week, while our ultimate goal is of course to reach 20,000 visitors, reaching 70% of that would still be considered a success. This allows us to set competitive goals that are also realistic.”
In addition, we’ve seen a growing number of ecommerce businesses start using OKRs, especially in sales and marketing.
“When it comes to OKR reporting, my best advice is to create a concise and well-thought-out plan,” says Stacey Kane of EasyMerchant. “Create a simple visual outline of what you want your status update to be and your milestones within the report. This should even include what callouts or other graphic elements will go on the page with the corresponding information section.”
Kane is using OKRs for her sales goals.
She adds, “I measure the success of my OKRs by tracking the goals, reviewing where I have come from, and then seeing what my next steps are. How did I move closer to that goal? What helped me get there? What didn’t help me get there? By using this approach, you will learn more about yourself and your process/tactics for reaching your OKRs.”
Natalia Brzezińska of PhotoAiD uses OKRs for marketing.
She recommends, “As for the OKR reporting, the best advice that came to my mind is, “don’t wait till the last minute if you can improve something sooner.” I mean that a too-strict approach to OKRs might not be effective. The setting, let’s say, quarterly objectives should not be equivalent to tracking and reporting OKRs four times a year.
If you’re a manager, you’ve got an insight into how your team is performing. Surely you can see some trends on a daily or weekly basis. Waiting until the end of the quarter to report an issue you have been aware of for a long time is counterproductive.”
Brzezińska uses a color-coding system to check in on progress at strategic points throughout the quarter.
“We measure OKRs by coloring them red or green at the end of each quarter. If the OKR is 100% done, then it is green; otherwise, it is red. There is also yellow in the middle of each quarter when we are halfway, but we know that we can finish a given OKR 100%. Thanks to verifying OKRs in the middle of the quarter, we know where our focus should be to make all OKRs green at the end. If we have not started something or we think that we will not be able to do something, the red color may indicate what we should focus on for the OKR to be green at the end.”
OKRs aren’t just for tech and ecommerce businesses. Many service businesses, like marketing agencies, can benefit from using them.
For example, Ashley Eggens of Think Orion says, ”Most of our OKRs are quantifiable. We are a digital agency so they’re mostly traffic stats of our clients’ websites, or for our internal projects. They should be at least more than 75% to be considered acceptable. Else, we investigate the roadblocks and make changes to the OKRs for the next quarter.”
Eggens’ agency stays on top of its goals with weekly updates.
”The best advice to report on OKRs is to update the progress on OKRs every week. We have a system where we can update the activities done, add numbers, and select the percentage of completion of OKRs. We have made it a practice to add comments and update the percentage every week. This keeps the OKRs updated timely and gives a clear picture of the work you have to put in to meet ends.”
Paige Arnof-Fenn of Mavens & Moguls agrees, “OKRs are useless unless you regularly check on them. That’s why I recommend monitoring/providing updates on the actual achievement of the OKR at least quarterly is best.”
She adds, “The objective should be specific, concrete, and inspirational. What will a satisfactory improvement look like and how will it be measured? The supporting key results should clearly describe outcomes, be time-bound and measurable.”
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CocoFinder is another example of a service business that uses OKRs across the entire organization.
Harriet Chan says, “When working with OKRs, the ability to measure value is critical. You have to measure the impacts your goals have on the organization. When you have the key results, you need to understand how they benefit the company.
For instance, if you are a tech company and you release a certain feature, you need to answer why you need the feature. The reason can be to win new customers or to increase sales, etc.”
Chan and the CocoFinder team measure if they hit their OKRs based on impact.
“We measure the success of our OKRs by the impact they have. For instance, if our goal was to earn more customers, we have to identify the number of new customers won, and the amount of revenue they bring.”
In sum, OKRs can work across a wide range of businesses from SaaS and eCommerce to agencies and professional services.
It takes most teams a couple of tries to get OKRs right. However, the key is to make your OKRs specific, concrete, and measurable.
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