A hands on guide on how to create alignment with OKRs

August is when the vacations end in Sweden. People get back to work recharged after a nice summer with lots of daylight and rest. As a leader, you should take the opportunity to harness this energy to plan and set the direction for the period ahead by getting your startup OKRs in order.

In this article, I will walk you through how you can use the famous OKR framework to align your team. Even though it originates from the tech industry you can use it to channel the power of any team!

I just concluded this process with my team with great results and I’m happy to let you in on my trade secrets that have been tried and tested many times. I have even created a template you can download to get started with your own OKRs.

Let’s get to it with a brief overview of what OKRs are and a note on strategic planning in general.

OKR:s captures your short-term strategy

OKR is short for Objective and Key Results. It has been fashionable to work with OKRs for quite some time now in the tech industry. There is a myriad of articles on the Internet about how they are supposed to be implemented. A good starting point is this article: “OKR vs KPIs, What is the Difference?”.

I’ve noticed there seems to be quite some difference in how to use OKRs. Some of the disagreement that seems to be out there are:

• Should the OKRs cascade from company objectives or be independent of higher levels in the organization if the team decides so?
• Should management set them and hand them over to the team or be set 100% autonomously by the team?
• Should the Objective be formulated as a SMART goal?
• Should KPIs:s and roadmap items be covered in the OKRs?

Since the concept has been heavily adopted by the Agile movement in which there are a lot of fundamentalists some voices seem to become quite strong in the debate.

Personally, I’ve used the OKR framework in several organizations, both in large mature organizations as well as in startups. To me, the exact format is not the most important as long as the team agrees. Don’t let the discussion of the format hijack the conversation.

The essence of strategy is choosing what not to do.

– Michael Porter

What you should focus on is creating alignment and clarity on what to focus on as well as who is accountable to make it happen. There is nothing magical about OKRs. Strategic planning has been around for thousands of years. It’s part of our DNA as we as a species are dependent on working together to survive.

But how do you actually take your team through the strategic planning then? It is actually not that hard. Let me walk you through the steps needed!

First understand the timeframe and scope for your OKRs

When setting goals you first need to decide on the timeframe as well as the scope. When it comes to timeframe I recommend dividing the year into two periods. One before summer and one after the summer. You want to tie into the natural cadence of people’s vacations during summer and winter.

Do not fall into the trap of doing the planning more often than twice a year as the planning sessions, follow-up, and retrospective, in the end, tends to take up quite some time.

As for scope, it is a bit trickier. OKRs are best used to move the status quo in areas important to your organization. You need to apply some judgment here. Don’t fall into a trap and put all your financial KPIs / targets as Objectives.

I’d also suggest not putting a list of features to be delivered if it’s a development team we are talking about. Instead, think about your most needed area of improvement and make sure these priorities will not change during the coming period.

If you are part of a larger organization making a change in ways of working is an excellent candidate to focus on. Make sure to get input all the way from the teams doing the daily work so it does not become a top-down management product. Examples of Objectives for a product development organization could be:

• Measure the value we deliver and communicate with the users
• Build performing teams that are stable and healthy
• Release with confidence and fix things that are broken fast

If you are a startup you could focus on meaningful learnings and traction. These are examples of decent Objectives:

• Establish the foundation needed to iterate on the product market fit
• Nail down our early adopter target group and their needs
• Deploy as small of a tech platform as possible that is optimized for agility

Aim for 2-3 Objectives. The fewer the better as this creates focus. The Objectives above are inspirational and provide direction but it will be hard to know if you have achieved them. This is where the Key Results come in.

Make sure your Key Results are crystal clear and measurable

You want to leave no room for ambiguity in the Key Results. The KR also serves as a clarification about what you actually mean by your objective. Ideally, your Objectives are stand-alone but sometimes the inspirational part makes them a bit vague.

When you formulate the KR:s you can use the trick to think ahead to your first follow-up meeting. When you sit there and talk about the progress, what will make it clear if you have progressed (or even achieved it)? Use the SMART model to make sure all the aspects are covered.

You should also think about if you want input-oriented KR:s or output-oriented KR:s. Input-oriented ones are centered around activity while output oriented are centered around achievements. Both have their pros and cons. A good rule of thumb is to gravitate towards input-oriented Key Results when the activities themselves are the important part.

Also, make sure to leave room to be creative on how to achieve the Key Results. It will allow the team to find ways to solve it that you didn’t think about beforehand. Don’t state how to achieve it, but what results you want. A great read on this subject is the book “The Art of Action”, by Stephen Bungay.

Some examples of good Key Results could be:

• At least one customer/user-centric KPI is visible and updated at least weekly for all to see by Day / Month / Year
• Qualitative feedback has been collected from the users at least 5 times by Day / Month / Year
• Put an MVP of the product in the hands of 50 real users by Day / Month / Year

Aim for a total of no more than 10 Key Results. 3-5 on each Objective depending on how many you have. Set the bar high enough so that if you are satisfied achieve around 70% of the KRs. This will provide enough stretch for the team as well as not be seen as impossible.

So now you know how to formulate good Objectives and Key Results. You also know that updating them about 2 times a year is a good cadence. But how do you actually get your team on board with the direction?

Conduct workshops with the team to create alignment and buy-in

I have found that 4 workshops á 2 hours each is enough to brainstorm about focus areas and converge on well-formulated OKRs with accountability. You will most likely have to do some thinking/work in a smaller group if your team is larger than 3-4 people. A schedule could look like this:

Use the whole group to generate ideas and give input. Let the discussion diverge to give room for a maximum number of ideas and aspects. Using breakout rooms with about 3-4 people in each is a good idea. Let them then present their thoughts to the larger groups.

Between the full team sessions, you should set up a smaller group to work on converting the ideas into concrete suggestions. You could do this part on your own but if you have people from your team in on this you will have supporters for the formulations. If you have vocal people in the team you know will raise objections it is a good idea to include them in the smaller group.

If you leave the sessions wishing you had just a little bit more time you are doing it right. Don’t fall into the trap of over-analyzing things.

Assign accountability for Key Results and follow up on progress regularly

Being clear on accountability and expectations is important as a leader. Since Objectives are more inspirational and talk about the direction you should not have specific accountability for them. It’s for the whole team to own. The Key Results on the other hand have clear definitions of what to achieve and should have accountability assigned.

You can work with different models to be clear of accountability and involvement. A popular one is the RACI model but there are others too. Simplicity is key here so a good format is to go with two roles:

• Responsible – All people are jointly responsible to make sure the Key Result is achieved. Usually, there is representation from relevant teams/areas where the work is to be conducted.
• Coordinator – The one person who will facilitate that the responsible people meet and move forward with the Key Result. In some aspects a bit like a Project Manager.

To make sure the work progresses you need to have regular follow-ups with the team. Having one hour every 3 weeks is a good interval. The Coordinators report on progress for the KR:s with support from the Responsible and the team agrees on a RAG status (Red / Amber / Green) as well as the progress made.

During the follow-up, it’s important to only focus on status and not solve problems. If you are familiar with the stand-up ceremony from agile practices you are in good shape.

Finnish of the period with a longer review session and a separate retrospective

After the half year is done you should have a review session with the team to pass the final judgment on the deliveries and your process. Make sure to have separate sessions to evaluate progress and to evaluate how you are working together as a team. Allocate 1.5 hours for each session and don’t have them back to back.

So there you have it, a tactical guide on how to use the OKR framework to align your team in one strategic direction. And remember to have fun! If you still think it sounds tricky feel free to reach out to me.