February 26, 2019
How to write great OKRs—IT companies
In this article, we will provide examples of OKRs for an IT company implementation and detail certain best practices for you.
OKRs were developed by Intel, an IT company, and made famous by their implementation at Google. Google used a combination of aspirational and committed OKRs. Aspirational objectives are more audacious, requiring the organization to stretch for achievement.
OKR example–IT company
Below is an example of an IT company’s aspirational OKR:
Corporate aspirational OKR: Double our global business
Achieve 100% year-to-year sales growth
Launch the new product architecture
Delight our customers
Build a world-class engineering team
Key result #1: Achieve 100% year-to-year sales growth–assigned to VP of sales
Hit our global sales target of $100 Million in Sales
Increase the average deal size by 30%
Reduce churn to less than 5% annually
Key result #2: Launch new product architecture –assigned to VP of engineering
Have engineering team contribute X story points
Design five tests with QA
Upgrade our database and complete data migration
Key result #3: Delight our customers–assigned to customer success team
Interview 20 customers per month and get feedback
Achieve an NPS of 9.0 from our customers
Increase customer retention to 98%
Key result #4: Build a world-class engineering team–assigned to human resources team
Offer a $500 reward for referrals to A-Players
Hire five referred engineers with exceptional references
The above examples illustrate how the key result of a company-level goal can cascade to become an objective at the department level, which in turn is supported by its key results. These key results would then cascade to become the goals of team leaders and individual contributors.
OKR best practices for IT companies
It is said that OKRs is a simple methodology with a simple language. There are no hard and fast rules, and there is no GAAP (generally accepted accounting principles). In application, OKRs are common sense principles, adaptable and flexible.
Borrow from best practices liberally, combine goal-setting, monitoring, and measuring to your unique situation, and create your own bespoke blueprint.
There are best practice considerations before a company even begins to implement the protocol. First, executive sponsorship and executive commitment are crucial. If absent, don't execute the methodology.
OKRs should be translated from your mission, vision, and strategies. The development phase is the perfect time to reinforce these values. Once OKRs are determined, they need to be communicated throughout the organization.
For example, if your mission is to “help companies execute better through collaboration” a corporate objective may center on improving the user experience.
Quantifiable (use numbers)
An objective is a qualitative goal designed to propel the organization in the desired direction. A key result follows SMART goal setting.
Typically, the objective part of an OKR is expressed in words, not numbers. Key results delve into the numbers and metrics, much like a KPI (key performance indicator).
As indicated in our example above, the VP of sales’ key results are:
100% increase in sales
Increase the average deal by 30%
Reduce churn to less than 5%
Cadence: how often should you set OKRs?
The default answer is quarterly. We think it is better to set a quarterly OKR to ensure that everyone follows the rhythm of checking in, and that about 10% achievement is occurring during each of the 13 weeks.
Limit OKRs to 3-5 objectives (per department, team, or individual) and 1-3 KRs per objective
Any more and your people could lose focus or become disengaged. No one should have more than 3-5 objectives per quarter, with 1-3 key results per objective.
The number one must do is frequent check-ins. We strongly recommend you conduct regular check-ins with teams and contributors, assessing their progress throughout the quarter. This practice allows you to identify any problem areas or at-risk key results, and to take real-time corrective action.
In the example above, regular check-ins for the customer success team may identify a key result, such as the NPS score at risk. By identifying the issue on a real-time basis, the team can address obstacles to achieving the key result.
You don’t have to initiate a formal OKR scoring system initially, although scoring allows you to learn more about your business.
For an IT company, scoring could help to identify disconnects between the engineering and QA teams, which need to be remedied before the next quarter’s OKRs. Learning and improving performance are two of the hallmarks of an OKR implementation.