THE

ULTIMATE
GUIDE TO OKR
Everything you need to know to get started
with Objectives & Key Results.

By Henrik-Jan van der Pol

Copyright 2021 by Henrik-Jan van der Pol

All rights reserved. No part of this book may be reproduced or used

in any matter without prior written permission of the copyright owner,
except for the use of quotations in a book review.

First edition: 30th June 2019

Published by Perdoo GmbH

www.perdoo.com
Contents
Introduction 4

A brief history of OKR 7

Benefits of OKR 8

Getting started 9

What are Initiatives? 16

OKR Software 17
Introduction

What is an OKR?
The acronym OKR stands for Objectives and Key Results, a
popular goal management framework that helps companies
implement and execute strategy. The benefits of the
framework include a better focus on results that matter,
increased transparency, and better (strategic) alignment. OKR
achieves this by organizing employees and the work they do
around achieving common Objectives.

An OKR consists of an Objective, which tells you where to go,

and several Key Results, which are the results you need to
achieve to get to your Objective. Initiatives are all the projects
and tasks that will help you achieve your Key Results.

The framework includes a number of rules which help

employees prioritize, align, and measure the outcome of
their efforts. OKR helps companies bridge the gap between
strategy and execution and move from an output- to an
outcome-based approach to work.

What is an Objective?
An Objective is a description of something that you’d like to
achieve in the future. An Objective sets the direction — like
a destination on a map. Objectives shouldn’t be technical
and shouldn’t contain a metric, so that everyone understands
where to go.

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What is a Key Result?
A Key Result is a measurable outcome required to achieve the
Objective. It contains a metric with a start and target value.
Key Results measure progress towards the Objective — like a
signpost that shows how close you are to your Objective.

What is an Initiative?
Initiatives are all the projects and tasks that will help you
achieve a Key Result. Imagine your organization is a car. The
Objective is your destination, the Key Results show if you’re
heading in the right direction, and the Initiatives are what
you’ll do to get your car moving.

Objective
“Where do I want to go?”

An Objective describes where you want to go and sets a clear

direction. Think of it as a point on a map, a destination like
New York.

Key Result
“How do I know if I’m getting there?”

A Key Result shows you how you’re progressing towards your

Objective. Think of it as a signpost with a distance marker.

Initiative
“What will I do to get there?”

An Initiative describes what you’ll do to achieve your Key

Results. Think of it as a description of what you’ll do to get to
your destination.

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 Objective Key Result Initiative

Aligned ✓

Ambitious ✓

Directional ✓

High Impact ✓ ✓

Inspirational ✓

Measurable ✓ ✓

Specific ✓ ✓

Time Bound ✓ ✓ ✓

Understandable ✓

Within Circle of Influence ✓ ✓

Within Control ✓

Example Objectives Example Key Results Example Initiatives

Crush the competition Acquire 3 small players Secure budget approval

through acquisitions in our industry from shareholders

Be a top place to work Reach top 10 in Fortune Hire a People & Culture
in the U.S. 100 best places to work Manager

Optimize the sales Increase opportunity Launch a new

funnel to close more win rate from 12% to discounting model
deals in less time 20%

Create a more goal- 100% of employees are Invite all employees to

oriented culture contributing to an OKR Perdoo

Empower our support Reduce ticket escalation Create Q&A document

team to be more self- by 15% for top 20 escalated
sufficient issues

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A brief history of OKR
OKR has a long history that can be traced back to 1954 when
Peter Drucker invented MBO or Management by Objectives.
In 1968, Andrew Grove co-founded Intel and — while CEO at
Intel — he further developed MBO into the OKR framework as
we know it today. In 1974, John Doerr joined Intel and learned
OKR during his time there. Doerr went on to join Kleiner
Perkins Caufield & Byers — one of the first major investors in
Google — and became an adviser to Google in its very early
days. Doer introduced OKR to Google’s founders, Larry Page
and Sergey Brin, who then implemented OKR at Google (which
still uses it today).

Peter Drucker Andy Grove John Doerr John Doerr invests OKR SaaS are
develops MBO founded Intel joins Intel in Google on the rise

1954 1968 1974 1999 2015

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Benefits of OKR

Business impact

Current research shows that when comparing groups of

employees who used OKR against those that don’t, those that
used it proved much more effective at their jobs, resulting in
better performance and increased sales. In fact, the group
who didn’t use OKR actively asked to be involved in the
process in future cycles. A full rundown of the ROI of Goal
Management can be found here.

Cultural benefits
The biggest impact of using OKR in most organizations
without goal management already in place, is a cultural shift
from output to outcomes. OKR creates focus, accountability,
transparency, and alignment within an organization. The
results of all this is an increase in performance and employee
engagement.

Strategic Focused Engaged

Alignment Execution Employees

OKR helps managers OKR helps focus only on People achieve remarkable
and employees align what’s most important results when they’re
all their efforts, making by prioritizing only the engaged with a purpose.
sure that everyone in the work that has the biggest OKR helps communicate
organization is moving in business impact. the bigger picture in a way
the same direction. everyone understands.

8
Getting started

Preparing for OKR

Before you start using OKR it’s important to have a clear
understanding of the challenge you want it to solve, and the
benefits you expect it to bring.

For most organizations, OKR solves the challenge of

implementing and executing strategy in a way that’s clear
to all employees, transparent and measurable. For it to be
successful, the implementation and management of OKR
should have an owner within the organization. This person
is usually called the “Ambassador”. The Ambassador’s role is
to ensure that everyone who will be using OKR, is properly
trained, engaged, and has ongoing help and guidance when
they need it.

OKR is a framework, but it’s also a learning process that often

involves a fundamental shift in how people think about and
measure the work they do, moving away from a focus on
output and towards a focus on outcomes.

Finding the right OKR cadence

OKRs are usually created on 2 cadences: annual and quarterly.
Company Objectives are typically set annually whereas
individuals and teams set their OKRs quarterly.

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Company OKRs are purely directional and therefore a longer
time span makes sense. Team OKRs are tactical and therefore
quarterly makes more sense: the corresponding shorter review
cycles enable organizations to change direction if tactics are
not driving progress towards the Company OKRs for the year.
More info on how to find the right OKR cadence can be found
here. If you’re working at a fast-moving company with shifting
goals, this post explains how OKR can keep you on track
when your business goals are shifting.

Vision
5-10 years

Strategy
1 year

Tactics
1 quarter

Execution

Initiatives
Today

Creating your ultimate goal

Most organizations have a mission and vision but often
these are difficult to understand and can be confused with
one another. We recommend turning your mission and vision
into an ultimate goal. Your ultimate goal defines what it’s
“ultimately” all about for your organization. It’s your North Star
to which all other goals align.

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Your ultimate goal should aim for a point at a considerable
distance in the future; 10, 15 even 25 years is reasonable. A
good example of an ultimate goal is when John F Kennedy
decided that America should put a man on the moon, and
coined the term “Moonshot Goal”.

Having a single ultimate goal gives you the focus that your
entire organization needs. For example, in 1958 NASA had 8
top-level goals including “The establishment of long-range
studies of the potential benefits to be gained from, the
opportunities for, and the problems involved in the utilization
of aeronautical and space activities for peaceful and scientific
purposes.”. By 1961, thanks to Kennedy, NASA had only one
ultimate goal; “Before the decade is out, land a man on the
moon and return him safely to earth”. This video explains how
to turn mission and vision into your ultimate goal.

Example of an ultimate goal

Ultimate goal

Make humankind interplanetary (SpaceX)

Become be biggest airline of Europe by offering the lowest

fare possible (RyanAir)

Build the most customer-centric store that sells everything

(Amazon)

Help ambitious organizations grow faster (Perdoo)

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Setting company OKRs
Company OKRs set the direction for the entire organization.
Because company OKRs are directional, they usually have a
time span of 1 to 3 years. Your company OKRs reflect the 3 or
4 things your organization decides it must achieve in the next
12 months.

It’s important that everyone in your organization has a chance

to give their input when you’re deciding what you want to
achieve in the next 12 months. We recommend starting with
an OKR workshop where all key stakeholders responsible
for company strategy first ask for and then gather, input
from employees on what they think top priorities should be.
This input can then be then discussed in relation to existing
company strategy and broken down into 3 to 5 OKRs. This
can be done using post-it notes, collaborative documents, or
even a whiteboard. The objective of the exercise is to come to
an agreement on what the organization should have achieved
by the beginning of the following year.

Setting team and individual OKRs

Team and individual OKRs express what tactics the teams
and individuals will deploy, and what results they will need
to achieve in order to help the organization realize its long-
term Objectives. Everyone has a busy schedule and urgent
things will constantly pop up, but whatever is reflected in
your OKRs deserves priority over everything else. This is also
why it’s crucial to update OKRs regularly to see how you’re
progressing on what you’ve agreed is most important. That’s
why it’s so important to always bring up your team OKRs in
your weekly or bi-weekly team meetings.

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OKRs give every team and individual a sense of direction
and accomplishment. But they are also a reason to say “No”
to things that fall outside of the scope of the OKRs. If every
team creates their OKRs as if these were the only things they
will be working on that quarter, it will ensure a successful OKR
program whilst helping the organization realize its strategy.

Key characteristics of Objectives

Aligned
Group Objectives should always align to the Company
Objectives and support your organization’s Ultimate Goal.
Group Objectives should always be created once Company
OKRs have been agreed upon.

High impact
Group Objectives should always be the things that, if you
achieve them, will have a huge positive effect on your entire
organization. Achieving Group Objectives, just like Company
Objectives, should be cause for a celebration!

Time bound
Keeping Group Objectives within a short and strict time frame,
encourages focus and allows you to review them in cycles.
This not only helps you quickly identify what’s working and
what isn’t, it also allows you to change course in a new cycle
if your Group Objectives are not contributing to your Company
OKRs.

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Key characteristics of Key Results

High impact
Group Key Results should reflect a big change, something
that, if you achieve 70% to 80% of your target, the rest of
your organization will notice. Make them tough. If they’re easy
to achieve they’re not challenging enough.

Specific
Group Key Results should be focused and have a clearly
defined scope. While Company Key Results cover broad
metrics, Group Key Results should measure more granular
progress, like sales of a specific product.

Within influence
Group Key Results should always be things you measure that
you don’t do, but you can influence. Writing 10 blog posts
is a bad Key Result, it’s something you do. Achieving 1000
views on a blog post you wrote is a good Key Result, as it’s
something you can’t control but you can influence.

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Key characteristics of Initiatives

Specific
An Initiative must always be specific. Its scope must be clearly
defined, and the owner of the Initiative must know what to
do. It cannot be vague like an Objective can be. An Initiative
must, therefore, contain verbs which are unambiguous, such
as establish, write, launch, visit, release, etc. Objectives can
contain less specific verbs, such as improve, increase, and so
on.

Within control
You should have full control over your Initiatives, which means
that it will be in your power to complete them. This means
there should be no dependencies on something or someone
else. It also means that you can be held accountable for not
completing your Initiatives; it will be more difficult to hold
someone accountable for not achieving his or her OKRs (as
they will not have full control over the latter).

Example Example Example

Objectives Key Results Initiatives

Develop a lighter Reduce fuel pump Build fuel pump

engine weight by 10% prototype

Make search more Reduce page load Run a regular

responsive speed to 1 second performance report

Increase sales of Sell $1 million worth Add 10,000 books to

non-fiction books of educational books our online store

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What are Initiatives?
Initiatives describe the work required to move the needle for
your Key Results. In contrast to Key Results, which clearly
measure progress toward an Objective, Initiatives are just
hypotheses for what work might deliver the biggest impact.

Initiatives are tasks, projects, or similar activities related to

an OKR without impacting the Objective’s progress. Regularly
checking in with your Key Results will help you decide
whether your Initiatives have delivered the desired results
or not. If they haven’t, you should think about changing your
Initiatives.

The benefit of setting OKRs and Initiatives is that there is a

clear separation between outcomes (Key Results: what did we
achieve?) and outputs (Initiatives: what did we do?). You can
commit to the same OKR while staying agile on an operational
level by using Initiatives.

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OKR Software

Get started for free

At Perdoo, we believe in truly democratizing the concept
of OKR and want to liberate companies from the hassle of
tracking OKRs in spreadsheets. We already offer most of our
content for free. Now we’ve decided to go even a step further
and offer our software for free as well.

Go to perdoo.com to sign up for a free account!

Our free account includes all core functionality and allows you
to track an unlimited number of goals.

Get your free Perdoo account

Questions?
Contact us via [email protected] and we’ll get back to you
asap.

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