Why use Company level OKRs?
The Objectives and Key Results (OKRs) framework is quickly becoming the standard way to set goals and track progress in organisations. One of the most important benefits of OKRs is the ability to turn a vision into a set of measurable outcomes for the quarter. High-level objectives are broken down into smaller, more detailed goals that allow people to get a clear North Star and measure their progress during the quarter.
Setting OKRs at a company level is an effective way for leadership to foster an outcome-driven culture where the team is empowered to decide the best way to achieve their goals. The conversations between management and individual contributors no longer revolve around the roadmap and implementation details. OKRs elevate the discussion to focus on the objectives, which enables teams to iterate faster on solutions.
A good OKR implementation will also encourage transparency and communication across the organisation, producing a fast feedback cycle between outcomes and outputs.
How to write your Company OKR
Step 1. Learn the difference between OKRs, KPIs, and projects
Before jumping into the OKRs process, it is essential to understand the difference between Objectives, Key Results, and other existing frameworks.
OKRs vs. Projects
Projects are mentioned here because a common mistake is to list them as Key Results. But a project is a deliverable (output), rather than a goal (outcome).
- Objectives: what do we want to achieve next quarter?
- Key Results: how are we going to measure progress?
- Projects/Initiatives: what are our best bets to get there?
OKRs vs. KPIs
There's some confusion about the difference between KPIs and OKRs because both concepts use metrics (and you'll often find KPIs in your OKRs).
But, these 2 frameworks serve a different purpose:
- KPIs: KPIs are a set of metrics used for monitoring the performance of an entire system.
- OKRs: OKRs are used to improve the performance of a specific part of a system.
What makes a good company OKR?
A good Objective should be inspiring and easy to understand by anyone in your org. You can be more specific in the Key Results, but the Objectives should give a clear idea of the expected impact at the end of the quarter.
A good Key Result should follow the rules of the SMART framework. In particular, it should be relevant to its parent Objective, measurable through the quarter, and time-bound. A good test is to ask, "would we do things differently if this KR goes off-track?". If the answer is negative, then you need to refine your OKR.
Finally, your projects are the things that will move the needle on your Key Results. They're bets that you make with the team. Some will work—double down on it. Some will fail, and it should be okay to stop and move on to the next idea.
Step 2. Pick 2-3 focus areas
The next step is to pick the right focus. One tool that can help here is the AARRR framework which divides your customer's journey into 5 stages:
- Acquisition: how many people find out that you exist?
- Activation: how many of them sign up for your product and become leads?
- Retention: how many leads come back to use your product again?
- Referral: how many users share your product with others?
- Revenues: how many users end up paying for your product?
For instance, a team can decide new users should get up & running quickly (Activation), and keep using the product once they get past the aha! moment (Retention).
You can use these 2 themes as a starting point for your Objectives, and then derive the corresponding Key Results.
Step 3. Write your plan
Once you've narrowed your focus, you can start writing your OKRs.
Agree on 2-3 Objectives before diving into the Key Results. You'll see some examples below, and here's a guide about writing OKRs if you're just getting started.
Example of Company level OKRs
Company OKR to successfully launch a new product
Successfully launch a new product
Generate $500k ARR in new revenue
Increase active user base to 10k
Achieve 70% week-4 retention rate from activated users
Generate 500 leads from press push
Company OKR to double leads through SEO
Double weekly leads growth through SEO
Increase organic search traffic by 20%
Increase organic leads by 40%
Improve organic click-through rate by 10%
Increase organic keywork coverage by 50%
Company OKR to improve customer satisfaction
Greatly improve customer satisfaction
Increase customer NPS score by 10 points
Reduce customer complaints by 25%
Increase customer retention rate by 5%
Increase customer satisfaction feedback by 20%
OKRs to accelerate the path to profitability
Accelerate the path to profitability
Increase our MRR by 20%
Reduce budget spent on SaaS subscriptions by 15%
Optimise paid marketing campaigns to achieve a 10% improvement in lead conversion rate
Increase customer lifetime value by 25%
OKRs to improve employee retention
Increase employee retention
Increase employee sastisfaction score by 10%
Reduce employee turnover rate by 8%
Increase employee engagement by 25%
Tracking your OKRs
Knowing how to write good OKRs is critical, but without good tracking in place, the OKRs will fade away and focus will be lost.
It's not just us saying that:
- Peter Kappus writes that "check-ins are the most important part of OKRs".
- Felipe Castro cautions people not to let their OKRs turn into New Year's resolutions.
- Christina Wodtke tells us that "cadence is probably the single most important thing".
The easier it is for a team to have weekly discussions around the OKRs, the better they'll execute. Here are a few best practices for tracking OKRs.
1. Do weekly check-ins
Quarterly OKRs should be tracked every week to be effective. Without a continuous reflection on progress, your OKRs won't be much different from having KPIs.
The check-ins process can be automated with a platform like Tability that takes care of reminders, and distribute updates to the teams.
2. Keep track of your confidence
Good progress updates should help everyone understand how far we are from our goal, but also how confident we are in achieving it. You can use a simple red/yellow/green color coding to indicate your confidence.
3. Make trends easy to see
Lastly, it's important to look at trends to avoid false positives. It's not rare for a team to have a hot start and then slow down mid quarter. This will be hard to see unless you can look at progress trends for individual Key Results.
What other success metrics can you use?
Now that you've got good Objectives, it's time to pick some key results and finding good metrics that work for your team can be tricky. Lucky for you, we've laid out all the best success metrics for your teams to use.
Here are a few to get you started:
Monthly Recurring Revenue (MRR)
MRR measures the recurring revenue generated by your products.
Customer Acquisition Costs (CAC)
CAC is the amount of money that you need to spend to acquiring one customer.
Customer Lifetime Value (CLTV)
CLTV gives you an estimation of the total revenue generated by one customer over the course of their lifetime as a paid customer.
This metric looks at the amount of months that a startup can last given the current spending and revenue.
Net Promoter Score (NPS)
NPS is seen as a general indicator of happiness for your customers. It measures how likely your users are to recommend your product.
Product/Market Fit score
The Product/Market Fit survey asks your user how disappointed they would be if your service no longer existed.
Daily/Weekly/Monthly Active Users (DAUs, WAUs, MAUs)
How many people are using your product every day/week/month.
What's the percentage of users that come back to your product every day/week/month.
The opposite of retention. What's the percentage of users that stop using your product.
How many people are recommending your product to their friends or colleague.
How do people interact with your content (it can be anything, from visits to specific sections to conversations in Intercom…)
How many signups turn into active customers.
Stop wasting your OKRs. Focus on the right work and accomplish your goals.