This blog examines how OKRs (Objectives and Key Results) bridge the gap between strategic goals and daily execution. By defining clear objectives and measurable key results, OKRs align team efforts with organizational priorities.
We break down OKRs into their essential components—ambitious objectives and specific key results—and outline a 3-step process for putting them into action: build the strategy, execute, and adjust as needed. The blog provides examples of translating high-level OKRs into actionable items at different organizational levels, showing how this approach clarifies goals and drives effective execution.
1. What is an OKR?
We often hear the saying, "The Only Constant in Life Is Change." Change is an inevitable 3orce, taking place either voluntarily or involuntarily and its driven by external factors, circumstances, or efforts of individuals or groups.
OKR stands for Objectives and Key Results. It is a goal-setting framework used by organizations to define and track objectives and their outcomes. OKRs are designed to align team efforts with the overall goals of the organization, ensuring that everyone is working towards the same priorities.
OKRs are used by companies like Google, Intel, and many others to drive performance and growth.
Components of OKRs
Objective (O)
A clearly defined goal or what you want to achieve.
Objectives should be ambitious, qualitative, and time-bound.
Example: "Improve customer satisfaction.
Key Results (KRs)
Specific, measurable outcomes that indicate progress towards achieving the objective.
Each objective typically has 2-5 key results.
Example: "Increase customer satisfaction score from 70% to 85% by the end of Q4."
How OKRs Work
Setting Objectives: Leadership or teams set ambitious objectives that align with the company’s vision.
Defining Key Results: For each objective, measurable key results are defined to track progress.
Tracking and Reviewing: Progress is regularly reviewed (often quarterly), and adjustments are made as needed.
Benefits of OKRs
Alignment: Ensures everyone in the organization is working towards the same goals.
Focus: Helps prioritize what’s most important.
Transparency: Makes goals and progress visible across the organization.
Accountability: Encourages teams to take ownership of their results.
OKRs are used by companies like Google, Intel, and many others to drive performance and growth.
Sample Organization Level OKR
Objective:Reduce maintenance costs of solutions by 2025.
Key Results:
Decrease maintenance costs by $500,000 by Q4 2024.
Achieve a total reduction of $1.2 million in maintenance costs by Q2 2025.
Reach a $2 million reduction in maintenance costs by the end of 2025 through optimization and cost-saving initiatives.
Management is now tasked with translating strategic OKRs into actionable deliverables for execution. For teams to meet the Key Results (KRs) defined in OKRs, these must be broken down into specific backlog items. Agile teams excel when OKRs are transformed into backlog items such as Epics, Features, and User Stories.
2. Connecting Strategy with Execution
3. Three-Step process for realizing OKRs
Step: 1 : Build the Strategy
Step: 2: Execute the strategy
Step 3: Pivot or Perceive
4. Let us apply 3 Three-Step process on organization-level OKRs
Organization Level OKR
Objective:Reduce maintenance costs of solutions by 2025.
Key Results:
Decrease maintenance costs by $500,000 by Q4 2024.
Achieve a total reduction of $1.2 million in maintenance costs by Q2 2025.
Reach a $2 million reduction in maintenance costs by the end of 2025 through optimization and cost-saving initiatives.
Divisional / Portfolio OKR
Objective 1:
Significantly reduce production issues and enhance system stability.
Key Results:
Decrease the number of production issues from 90,000 to 50,000.
Achieve a cost saving of $1 million through the reduction of production issues.
Modernize high-issue applications to further reduce production issues, targeting a cost saving of $0.35 million.
Objective 2:
Optimize resource utilization by eliminating inefficiencies.
Key Results:
Sunset all applications and databases that have not been used in the last 5 years.
Achieve a cost saving of $0.5 million through the elimination of unused resources.
Objective 3:
Empower customers with self-service tools to reduce support escalations.
Key Results:
Invest $100K in a new production support system with knowledge bases (KBs) to enable customer self-service.
Reduce production issue escalations and achieve a cost saving of $0.15 million.
Team / Program Level OKRs
2. Objective: Optimize resources by eliminating unused applications and databases.
Key Results:
Sunset all applications and databases that have not been used in the last 5 years.
Achieve a cost saving of $0.5 million through the elimination of unused resources.
Decrease the number of production issues by 15000
3. Objective: Enhance system reliability by modernizing problematic applications.
Key Results:
Identify and modernize applications with a high volume of production issues.
Reduce the Production issues by 25000
Achieve a cost saving of $0.35 million by reducing issues through modernization efforts.
4. Objective: Empower customers to resolve issues independently by implementing a new production support system.
Key Results:
Invest $100K in a new production support system with knowledge bases (KBs) to enable customer self-service.
Reduce the production issues by 10000
Reduce production issue escalations and achieve a cost saving of $0.15 million.
6. Objective: Optimize resources by eliminating unused applications and databases.
Key Results:
Sunset all applications and databases that have not been used in the last 5 years.
Reduce the production issues by 30000
Achieve a cost saving of $0.5 million through the elimination of unused resources.
Visualize large OKRs as backlog items to clarify organizational goals for the development team
5. Summary
This process creates a direct link between strategy (OKRs) and execution, minimizing any uncertainty regarding team activities and organizational goals. Additionally, it allows for the development of milestones driven by objectives rather than traditional stage gates.
Bridges the gap between what teams are doing and what management expects.
Nice Article. But some of KRs are appearing as tasks, set of activities.