An Objective is a description of a goal to be achieved in the future. An Objective sets a clear direction and provides motivation. In OKR methodology objectives should be hard to reach, but not impossible, goals.
A Key Result is a metric with a starting value and a target value that measures progress towards an Objective. While and Objective is like a destination on a map, a Key Result is like a signpost with a distance that shows you how close you are.
OKR delivery cycle is a time period used to add time constraint to your objectives. Cycles can be freely defined by your company. Typically a cycle lasts one quarter.
Example: 2018 1st Quarter
Objectives can be vertically or horizontally aligned. Alignment indicates support for another objective, usually owned by another team at your company. For example, a company objective to Grow business might be supported by Marketing team's objective Create more leads.
OKR owner is a team owns a particular objective. Objectives are generally large in scope and will have several people working on it in order to reach it. You can designate team responsibilities through objective owners.
Example: Product Engineering Team
Lead is a person who oversees this objective. Lead is a point person for any OKR related questions. Lead can be part of the team that owns the objective or someone completely outside the team.
Simple OKR let's you create OKR grade reports for submitting end-of-cycle OKR grades and notes. We advice you to submit one OKR grade report per team at the end of the OKR cycle.
Company level objectives represent your business strategy. Most organizations review their business strategy yearly. It's a good time then to pick couple most important things the company wants to achieve and set them as company OKRs.
A Company Objective should clearly describe a state in the future. It should indicate a direction you will take to get there.Inspirational
Company Objectives should evoke an emotional response. Objectives should inspire your entire company to take action.
Company Key Results should always contain a numerical value with a start and an end point.Ambitious
When setting a Company Key Result it's tempting to just extrapolate a target from a trend over time. Think bigger. What would be a 5x improvement, a 10x improvement? Aim high, but stay realistic.
Team OKRs are the things your teams or departments need to achieve to execute on your company strategy and make your Company OKRs a reality.
Creating Team OKRs should be a collaborative effort. When creating Team OKRs it’s important that your teams or departments have the autonomy to come up with their own suggestions and agree on them together.
Team Objectives should be aligned to Company objectives and support your company's ultimate goal. Team OKRs should be created after Company OKRs are setup.
Team OKRs should have a well defined scope in order to make them possible to achieve. Not clearly defined scope will create confusion among your teams and make them miss their goals.High Impact
Team OKRs should have a large impact on the company once achieved. If you achieve 70% or 80% of your target, the rest of the company should notice the impact.
Key Result metrics allow you to quantify key results and automatically track the progress of your Objectives. Simple OKR offers five types of metric types.
Milestone metric lets you track binary outcomes. You either reached your milestone, or you didn't. Use this metric when you can't express your key result as a numeric value. It is often the case when you are just starting out with OKRs and most of your key results milestones.
Baseline metric lets you capture a baseline value for a metric. Imagine a scenario where you want to track coupon redemptions with a goal to optimize coupon usage. When starting out, you may not have an available coupon redemption rate. You want to capture baseline value first before you can start work on improving coupon performance.
Positive metric lets you move toward a specific target value. Use this metric when more is better. An example could be "sign 100 new customers". Your target would be 100 customers, and starting value is probably 0. You can track the total number of customer signed throughout the quarter.
Negative metric lets you move toward a specific target value. Negative metric is similar to the Positive one; however, the metric value moves toward a smaller target value. Use this metric to track things such as risk and cost reductions. You can use this metric to track anything where you want to go from higher value to a smaller one.
With range metric, you can establish a range within which you want your metric to stay. You can use this metric to capture things like weekly resource utilization, or weekly spend.
OKR grading is an important step of the OKR process. Simple OKR let's you set an OKR grade on every Key Result from the Objective's page. Doing this let's adjust intermediary OKR grade as Cycle progresses.
Simple OKR also offers OKR grade reports. These reports can be created from the Cycle page. We recommend creating such reports at the end of the cycle. Every team should submit OKR grade report to capture final OKR grades and any additional notes. Grade reports let's you easily revisit final grades and notes at a later time.