How to create your first OKRs plan

Sten Pittet - CEO
STen Pittet

See a simple step-by-step approach to create your first set of OKRs.

Video tutorials

Here's a video version of this tutorial.

Before OKRs: getting the right culture

The Objectives and Key Results framework can be a powerful tool for outcome-driven teams. But, it can also have a disastrous effect on morale if it's used in the wrong context.

This is why you'll need to assess things first:

  • Is there a clear vision?
  • Are people encouraged to take risks?
  • Do you have a customer-centric approach to solving problems?
  • Does the team have ownership?

No need to have all the answers right away, but you need to ensure that you'll invest in having the right environment for OKRs to succeed.

If you need some guidance, we have a list of 50 tips for outcome-driven teams that can help.

Finally, before we jump into the goal-setting process I'd like to establish a list of DON'Ts:

  • Do not use OKRs for performance management. It's about alignment, focus and team execution—not bonuses.
  • Do not do individual OKRs. Focus on the company and the teams instead.
  • Do not make your OKRs people-centric (OKRs of the CEO, then CXOs, etc...). People-centric OKRs are usually skewed towards what's good for a manager, instead of what's good for your customers.

Now that we've established the basis, it's time to build plan!

Step 1. Keep it lean

Start small with a group that is happy to champion OKRs in your org. It doesn't have to be the leadership team, but it has to be a group that has bought into the value of OKRs. There will most likely be some skeptics, and it's best to start with a small pilot while you learn.

You also do not need to have multiple layers of OKRs the first time. It's okay to start with a single OKRs plan for the company. Then, you'll be able to involve more teams the following quarter by sharing your experience.

Recommendations:

  • Duration: set goals for the quarter, not the year.
  • Frequency: your plan should be tracked weekly.
  • Size: Limit yourself to a 3x3 format (Objectives x Key Results), or even 2x3 if you can.

Step 2. Identify your Objectives

"Alignment before metrics", is a statement that you need to keep in mind when you're using OKRs. It's easy to get sucked into debates around the Key Results, but these won't matter if your Objectives are wrong.

You need to start by identifying the Objectives that you want to achieve for the quarter. There are different ways to do that, but you'll find below a method using the AARRR funnel and Product Lifecycle.

What's the AARRR funnel?

The AARRR funnel is a simple framework that divides your customer's journey into 5 steps:

  • Acquisition: how many folks find out about you?
  • Activation: how many of these folks try your product?
  • Retention: how many of these folks keep coming back?
  • Referral: how many of these folks invite their friends and colleagues?
  • Revenue: how many of these folks turn into paying customers?

Here's how the process goes:

  1. Identify 2 stages of the funnel that you'll need to focus on next quarter.
  2. Turn the stages into proper statements explaining clearly the desired impact.
    Eg: "Retention" can become "Our users stick to the product", and "Revenue" can be "Our growth is on par with a series B startup".
  3. Test the Objectives with the team.
    Does everyone understand what they mean? Are they not too generic or too specific?

There's a general mapping of priorities depending on the stage of your business.

An early-stage company pursuing product/market-fit will most likely focus on Retention and Activation. Then, once they know they have something that people want, they'll switch their attention towards distribution via Acquisition and Referral efforts.

You'll notice that I suggested picking only 2 stages of the funnel for a 3x3 plan. It's because you'll have greater focus by having multiple Objectives for the same stage, rather than trying to tackle every part of the AARRR journey. Your Product team can work on Retention via features, while your Customer Success team address Retention via guides and demos.

Sample plan

You'll find below a sample plan to help you with your own process. We'll assume here that we're a startup building our MVP.

---

Objective 1: we have a product that customers love

Objective 2: our users are happy with the onboarding

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Step 3. Set your Key Results

Once you know your Objectives, you can start listing your Key Results underneath. Your KRs should follow the SMART rules:

  • Specific: be clear about the goal.
  • Measurable: you should be able to observe progress every week.
  • Attainable: it's okay to stretch things but you need realistic targets.
  • Relevant: your KRs should relate to their Objective.
  • Time-bound: there's a clear timeline to achieve your goal (already covered by the duration of your plan).

Once you have a list of KRs you can do a simple test by asking the following question: "would we do things differently if this KR is off-track mid-quarter?" If the answer is no, then discard it—it's just noise in your OKRs plan.

The hard part of setting Key Results is often to keep them measurable, especially if your project is not shipped yet. If that's the case, then you should do your best to find another proxy metric that can help you raise your confidence.

Tip: think about pairing your KRs to make sure that you do not get bad side effects. For instance, you can balance a goal around signups with a different goal around retention.

Sample plan

You'll find below a sample plan to help you with your own process. We'll assume here that we're a startup building our MVP.

---

Objective 1: we have a product that customers love

  • KR 1: our NPS is above 60
  • KR 2: we have 250 weekly active users

Objective 2: our users are happy with our self-serve onboarding

  • KR 1: 80% of new leads are able to complete their onboarding
  • KR 2: 75% of the users are happy with the onboarding

---

Step 4. List your initiatives

Before calling the OKRs plan done, I would highly recommend to list some of the big initiatives that can help you make progress on the Key Results. This is a simple way to double-check that you haven't listed projects as KRs, and it will help everyone to start connecting their North Star to their activities.

Don't overdo it! You're not trying to build the entire roadmap, but rather to have some general idea of what your plan can look like in terms of outcomes and outputs.

Sample plan

You'll find below a sample plan to help you with your own process. We'll assume here that we're a startup building our MVP.

---

Objective 1: we have a product that customers love

  • KR 1: our NPS is above 60
    Initiatives: build [top voted feature], tackle [top voted bug], etc...
  • KR 2: we have 250 weekly active users
    Initiatives: implement [core retention feature], launch beta on Product Hunt, etc...

Objective 2: our users are happy with our self-serve onboarding

  • KR 1: 80% of new leads are able to complete their onboarding
    Initiatives: publish guides and tutorials, add in-app help, etc...
  • KR 2: 75% of the users are happy with the onboarding
    Initiatives: conduct onboarding interviews, identify top 5 improvement opportunities, etc...

---

Step 5. Start tracking your plan!

Setting OKRs might be the hardest thing about OKRs, but tracking them is the most valuable. Make sure that you have a simple way to keep track of progress every week—and a platform like Tability can help you automate a lot of the process. Creating OKRs can be hard, especially when it's your first time doing it. In this post, you'll find a simple step-by-step process to come up with your first set of Objectives and Key Results.

✨ Struggling to track your OKRs? Tability can help ✨

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