What is OKR?
Objectives and Key Results (OKR) is a popular and effective method for setting objectives and goals and measuring performance. In this post you’ll learn how the system works, how to implement it in your company and how to use an OKR template in Google Sheets to help you do that.
The OKR management system was originally developed by former Intel CEO Andy Grove in the 1970s, but it became well-known after it was adopted by Google. Many people, including Google co-founder Larry Page, credit the OKR framework with having helped Google grow to the size it is today. Since then, the method has been implemented by many other Silicon Valley giants including LinkedIn, Twitter, Dropbox, Spotify, and Uber.
The OKR system helps companies to plan and evaluate organizational performance. You do this by setting clearly defined goals (objectives) and using measures to track whether these goals have been achieved (results). The OKR method is designed to help you:
- Align goals and focus across the entire organization
- Set goals at the individual, team and company level
- Reach ambitious goals – quickly
- Encourage innovation
With a focus on achieving concrete goals in short timeframes, the OKR framework has become popular among tech companies operating in a fast-paced environment. It’s ideal for startups and other teams who want to grow fast.
Having said that, it’s an effective and simple system that can be implemented anywhere, by anyone. Maybe you just want to organize your daily life as effectively as Google?
No matter what kind of plan, project or business you have, OKRs simply help you to get stuff done.
What’s the difference between KPIs and OKRs?
This question generates a lot of confusion. Are they the same thing? Not exactly. KPI – or key performance indicator – is another type of performance measurement, but KPIs are more focused on reporting results. These results are used to evaluate the success of a business or an individual project. In contrast, OKRs are goal-oriented. OKRs are also more specific and narrow, with results that can be measured in a numerical format.
Whereas KPIs tend to remain the same over long stretches of time, OKRs are focused on short-term goals. The progress of OKRs is tracked over a defined time period: usually a business quarter.
It can be a little confusing. The OKR method helps you to focus on the most important tasks right now. Therefore some of your KPIs (the most urgent ones) may be included in your OKRs!
How to use OKRs: Google’s secret weapon
You don’t have to be a Silicon Valley giant to implement the simple and effective OKR method. No matter the size of your organization, OKRs can help align goals, motivate your team and keep everyone on the same page. We’ve created a free OKR template for you to use in Google Sheets. But before you start working on the spreadsheet, let’s look at how you define objectives and goals.
Are objectives and goals the same thing? No – think of a goal as a destination, and objectives as the roadmap you need to achieve your goal. Objectives are the building blocks towards achieving goals.
Make your objectives SMART:
- S – Specific
- M – Measurable
- A – Achievable
- R – Realistic
- T – Time-bound
By choosing SMART objectives and sharing them with your team or organization, you avoid any potential confusion. You should thoroughly account for all of the top-level goals of the organization, and each objective should be assigned to a responsible person or team. On top of that, it is best to have as much detail as possible when dictating tasks so that nothing is missed, shelved, or put on the wrong employee.
As best practice, we recommend taking a top-down approach when setting objectives. So, first you should set company-wide goals, then divide responsibilities by department, followed by individuals.
Remember collaboration is key, and you may find that it is best to make people from different departments work on the same objective. When assigning objectives to employees it is important to get their buy-in. Therefore we don’t recommend that you dictate tasks and outcomes to your employees.
Instead, have each member of your team adopt an achievable piece of the project through consensus. Having everyone onboard during the objective setting process will foster a sense of ownership for individual work, along with a sense of cohesion and community towards the end goal.
OKRs are designed for employee management rather than employee evaluation, so they are not normally used to determine compensation or promotions, although they can be one factor in performance reviews.
Experts recommend limiting the number of objectives to between three and five – OKRs are designed to help you focus on priorities. It’s not about tracking every single task you do.
Key results are the specific goals that you must reach with each objective. For every objective, you should have three to five key results. You must be able to measure these results in a numerical way – e.g. 50%, 17 items, $40, 1000 new customers.
As an example, let’s say your objective is “to improve response time to customer queries”. The key result might be “to decrease the average response time from 24 hours to 12 hours”. Key results should be aspirational yet achievable. In other words, they should be sufficiently aggressive to motivate the team and push the individual to achieve them, but not so difficult that they can never be reached. The person assigned the key result is called the owner.
To sum up, key results are:
- Measurable (numerically)
- Limited to 3-5 per objective
- Challenging but achievable
- Specific outcomes (not a list of tasks)
- Assigned to “owners” (individual team members)
What’s an OKR template?
To help you set up an OKR system for your team, try our free OKR template in Google Sheets. With this you can:
- Keep track of your department’s objectives – in one place
- Monitor the progress of each key result – for each team member
- View actual progress – at a glance
- See total average progress vs. desired progress
In one single spreadsheet.
If you can use spreadsheets you already have all the skills you need to create your own OKR tracking system.
Using our ready-made standalone template, you just enter the data, and our spreadsheet template does the work. Easy. We’ve already written the formulas for you.
- Free Sheetgo standalone OKR template
- No need for special software
- Easy to use – in Google Sheets
How to get the OKR template in Google Sheets:
We’ve created a template for you in Google Sheets so all you need is a Google Account.
- Click on the link below to get a copy of the OKR template
- The template is saved to your Google Drive and it opens automatically
How do I use the template?
First of all you need to agree the OKRs with your team. Remember to check that they meet the SMART criteria we described above. The first tab in the spreadsheet template gives you full instructions, but we’ll cover everything here as well.
Go to the Team Objectives tab and select your desired time frame, e.g. 2019 Q4.
Enter your team objectives in the same tab.
In the Key Results tab, start with column A. Use the dropdown menu to choose which Objective the key result aligns to. In column B, enter the key result. Remember these need to be quantifiable and the key results must say how you will achieve the objective.
Assign the key result to an owner in column C. This is the team member responsible for this outcome.
Select the metric in column D. This is how you will measure that key result. For example, this could be “% of gross profit margin”, or “number of new signups”.
Fill out your start value, target, and current values in columns E, F and G. Your progress is updated automatically in column H.
Your OKR tracking system is ready. You now have a clear overview of the progress your team is making towards their OKRs – in one spreadsheet. Progress is calculated automatically and updated inside your visual dashboard. Just change the time frame using the dropdown menu to display the results for the desired quarter.
Looking for a more advanced solution?
Do you need to manage the OKRs from multiple different departments? Sheetgo can help. You can use our automated OKRs template.
By connecting spreadsheets, you make life simpler for your colleagues. And yourself.
Only the manager needs a full overview of every team’s progress towards their OKRs. Using Sheetgo connections, individuals or teams keep track of their progress in their own spreadsheet. This data is then transferred to the manager’s master spreadsheet. And the best part? The data flows automatically. This means:
- Team members update their OKR progress in their own spreadsheet
- Tidy and streamlined working practices
- Privacy – only the manager sees all OKR progress
- You get automated updates when you want them
Manage your HR department with spreadsheets
Everyone has free access to spreadsheets, and they are incredibly easy to use. Think about automated HR systems and reports, easy collaboration, and no need for inflexible and expensive software.
Sheetgo is a connection tool for Google Sheets spreadsheets. Sheetgo powers connections between these spreadsheets. This allows data to flow from one to the other, in an automated system.
This means that each department updates its separate OKR metrics, and Sheetgo automatically updates this information in the master spreadsheet. Check out your dashboard to get a visual overview of the progress your teams are making towards their OKRs. Find out more about it here.
You have connected spreadsheets with Sheetgo to create an automated OKR management system.