Effective ways for creating OKRs to Drive Company Success

Creating OKRs (Objectives and Key Results) is a proven method to align employees’ efforts with your company’s mission. When done right, creating OKRs offers clear direction and measurable goals, improving productivity and success at both individual and organisational levels. 

According to research by Bain & Company, companies that set structured goals are 3.5 times more likely to outperform their peers. This speaks to the power of OKRs in driving performance.

By the end of this article, you’ll understand the best ways for creating OKRs that push your team to strive for excellence and ensure your company stays on track for long-term success.

What Are OKRs?

OKRs, or Objectives and Key Results, are a simple but powerful framework for setting and tracking goals that drive both individual and company performance. They help create a clear roadmap for what needs to be achieved and how success will be measured. But before diving into effective ways to creating OKRs, let’s break down what exactly they are:

Objectives: What You Want to Achieve

• Objectives are the high-level goals you want to accomplish.  
• They should be ambitious yet achievable, providing direction and focus.  
• Think of them as aspirational but concrete targets, such as “Increase customer retention” or “Expand product offerings in new markets.”

Key Results: How You Measure Progress

• Key Results are the specific, measurable outcomes that show you’re making progress toward your objective.  
• For each objective, you typically define 3-5 key results. These should be clear, time-bound, and quantifiable.  
• For example, if your objective is to “Increase customer retention,” a strong key result could be “Reduce churn rate by 15% over the next quarter.”

Difference Between OKRs and Other Goal-Setting Methods

Many companies mistakenly think OKRs are the same as traditional goal-setting methods like SMART goals or KPIs, but there are key differences:

• SMART Goals: While SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals are great for setting individual tasks, OKRs focus more on broader objectives that drive company-wide impact.  
• KPIs (Key Performance Indicators): KPIs are metrics that measure the ongoing performance of a business process, whereas OKRs are temporary targets set for a specific period (quarterly or annually) that push for significant growth or improvement.  

In fact, companies that adopt OKRs report greater clarity and alignment across teams, according to a report by Workboard.

Why OKRs Are So Powerful

• They create alignment across departments by ensuring everyone is working toward the same objectives.
• OKRs help teams stay focused on the most important tasks and avoid getting sidetracked by less impactful work.
• They motivate employees by providing a clear path to success, which leads to higher job satisfaction and overall productivity.

With the right OKRs, you’ll see not only better results but also a more engaged and driven team.

Why OKRs Matter for Employee and Company Success

OKRs are a strategic framework that directly ties the efforts of your team to the overall success of your company. When employees know exactly what they need to achieve and how it impacts the bigger picture, you get better results, more motivated teams, and a thriving business. Here’s why creating OKRs are critical to driving both employee and company success:

1. Alignment Between Individual and Company Goals

• OKRs ensure that everyone in your organization is moving in the same direction. By clearly defining objectives at the company, team, and individual levels, OKRs create a top-down alignment that keeps everyone focused on what matters most.
• Instead of scattered efforts, employees can see how their personal contributions directly influence broader business outcomes, leading to stronger engagement and ownership of their work.

According to a study by Betterworks, 89% of employees said OKRs make them feel more aligned with their company’s priorities.

2. Promotes Transparency and Accountability

• OKRs promote a culture of transparency. When objectives and key results are shared across the organization, employees can easily track progress, understand who is responsible for what, and see how other teams are performing. 
• This openness creates a sense of accountability. Employees aren’t just working for the sake of it; they are consistently measuring their progress against the key results that were set at the beginning of the quarter.

Transparency around goals has been shown to increase overall team productivity by as much as 25%, according to a study by Gallup.

3. Increases Employee Engagement

• OKRs don’t just dictate what needs to be done—they empower employees to take control of their own work. By understanding how their efforts tie back to company success, employees feel more motivated and engaged in their roles.
• This is especially true when objectives are set collaboratively, allowing employees to actively participate in the goal-setting process. When they feel their voice is heard, it boosts morale and gives a sense of purpose.

Research from Gallup shows that companies with highly engaged employees see 21% higher profitability and 17% higher productivity.

4. Focuses on Results, Not Tasks

• A common trap in traditional goal-setting is focusing on tasks rather than outcomes. OKRs flip this around by emphasizing results over activities.
• Instead of micromanaging how work gets done, OKRs encourage employees to focus on delivering measurable outcomes, which leads to more innovation and creative problem-solving.

5. Drives Continuous Improvement

• OKRs are not meant to be set and forgotten. Regular check-ins, whether weekly or bi-weekly, allow for consistent review and adjustment of progress. 
• This creates a culture of continuous improvement, where teams can pivot if needed and learn from their successes and challenges.  
• As a result, companies using OKRs experience a more agile and adaptable workforce, able to meet the demands of an ever-changing business environment.

When effectively implemented, OKRs go beyond just boosting productivity. They create a highly engaged, aligned, and motivated workforce that’s focused on achieving both personal growth and company success.

Steps to Create Effective OKRs

Creating OKRs that drive success requires a thoughtful, step-by-step approach. While OKRs might seem straightforward, it’s easy to fall into common traps like setting vague objectives or unmeasurable key results. Below we’ve given you a clear, actionable guide to creating OKRs that will push your team to achieve meaningful outcomes while staying aligned with your company’s long-term vision.

Step 1: Define Clear Objectives

Your objectives should act as the north star for your team, guiding their efforts and giving them a clear sense of purpose. When defining objectives, remember:

• Make them aspirational yet achievable: Aim high, but ensure it’s within the realm of possibility. Ambitious objectives stretch your team without overwhelming them.
• Focus on high-impact areas: Your objectives should address your biggest priorities. Don’t try to fix everything at once, focus on what will move the needle for your business.
• Ensure alignment with company strategy: Every objective, whether for an individual, a team, or the entire company, should tie back to the broader company mission and goals. This ensures that efforts at all levels contribute to the bigger picture.

Example Objective: “Expand into new markets and grow revenue.”

Step 2: Set Measurable Key Results

Once you’ve nailed down your objectives, it’s time to get specific. Key results are what you’ll use to track progress. Each objective should have 3-5 key results that indicate success.

• Be specific and quantifiable: Vague key results like “Improve customer experience” won’t help. Instead, use measurable targets, such as “Increase customer satisfaction score from 75% to 90%.”
• Focus on outcomes, not tasks: Key results should measure the impact of your efforts, not just the actions you’re taking. For example, “Launch a new marketing campaign” is a task, while “Increase inbound leads by 30%” is an outcome.
• Set time-bound goals: Make sure your key results have a clear timeframe. This creates a sense of urgency and ensures consistent progress.

Example Key Results for the Objective “Expand into new markets and grow revenue”:  

• Launch in two new international markets by Q4.
• Achieve a 20% revenue increase in new markets by year-end.
• Acquire 5,000 new customers in each new market within six months.

Step 3: Ensure Alignment Across Teams

One of the main benefits of creating OKRs is that they help unify efforts across different departments. For this to happen, you need to ensure that OKRs are aligned from the top down.

• Cascading objectives: Start with company-wide OKRs, then cascade them down to teams and individuals. This ensures that each person’s OKRs support the overall business strategy.
• Encourage collaboration: Some objectives might require cross-functional teamwork. For example, launching a new product might involve input from marketing, product development, and sales teams. Make sure OKRs reflect this interdependence.
• Use OKR software: Tools like Asana, Weekdone, and Workboard can help teams easily track and share progress, ensuring transparency and alignment across the board.

Step 4: Review and Adjust Regularly

Creating OKRs at the beginning of a quarter or year isn’t enough—you need to keep them front and center. Regular reviews ensure that you’re staying on track and allow for adjustments if things aren’t going as planned.

• Weekly or bi-weekly check-ins: Make it a habit to review OKR progress at regular intervals. This could be during team meetings or through one-on-one check-ins with managers.  
• Track progress visibly: Use dashboards or other visual tools to display OKR progress. This keeps everyone accountable and aware of how close they are to hitting their targets.
• Be flexible when needed: Sometimes the market shifts or new opportunities arise. If a key result becomes irrelevant or unachievable, don’t hesitate to adjust. The aim is to achieve the objective, not stick rigidly to a plan that no longer works.

Step 5: Reflect and Celebrate Achievements

OKRs are as much about learning as they are about achieving. At the end of your OKR cycle, take time to reflect on the outcomes.

• Conduct a review session: Evaluate how well you performed against your key results. What worked? What didn’t? This reflection allows teams to continuously improve their approach to goal setting.
• Celebrate wins: When you hit a key result, acknowledge it! Celebrating even small wins keeps morale high and encourages ongoing engagement with the OKR process.
• Apply lessons to the next cycle: Whether you’ve met your objectives or fallen short, the lessons learned should inform the next set of OKRs. This ensures continuous growth and improvement.

These steps will help you create OKRs that not only set ambitious goals but also lay out a clear path for achieving them.

Common Mistakes to Avoid When Setting OKRs

To ensure your OKRs drive success, avoid these common mistakes:

1. Setting Too Many OKRs: Focus on 3-5 objectives to maintain clarity and avoid overwhelming your team.
2. Making Objectives Too Vague: Specificity is key. Instead of “Improve customer experience,” try “Increase customer satisfaction score by 10 points.”
3. Confusing Key Results with Tasks: Key results should focus on measurable outcomes, not activities.
4. Setting Unrealistic or Easy Goals: Balance ambition with realism to motivate your team.
5. Failing to Align OKRs Across Teams: Ensure that each department’s OKRs tie back to company-wide goals.

How to Measure the Success of OKRs

Measuring the success of OKRs is a crucial part of the process. It allows you to understand how well your team or company is progressing toward its objectives, identify areas for improvement, and ensure that you’re on track to achieve your goals. To effectively measure OKR success, follow these steps:

1. Set Clear, Measurable Key Results

• The first step to measuring success is making sure that your Key Results (KRs) are specific, time-bound, and measurable. This clarity allows you to track progress objectively. For example, instead of a vague key result like “Improve team performance,” you should aim for something like “Increase team productivity by 15% within Q3.”

Pro Tip: Use quantifiable metrics whenever possible, such as sales numbers, user engagement percentages, or customer satisfaction scores, to ensure that you can objectively measure progress.

2. Track Progress Regularly

• OKRs aren’t meant to be reviewed only at the end of the quarter. To ensure success, you need to track progress continuously. This could mean weekly or bi-weekly check-ins to assess how close you are to achieving your KRs. Regular tracking ensures that you can make adjustments when needed, rather than waiting until it’s too late.

Tip: Use a project management or OKR tracking tool to keep everything in one place. Platforms like Asana, Monday.com, or Google Sheets can help teams stay aligned on OKRs throughout the quarter.

3. Assign Owners for Accountability

• Each OKR should have a designated owner—someone responsible for driving it forward. When clear ownership is established, it fosters accountability and encourages individual and team responsibility for success.

Why it matters: Without assigning ownership, it’s easy for tasks to fall through the cracks, leading to unfulfilled objectives. Having a clear owner ensures someone is always steering the objective toward completion.

4. Measure Progress on a Scale

• Most companies use a scale of 0 to 1 to measure OKR success. Achieving a score of 0.7 to 1 means the OKR has been completed. Anything below 0.7 may indicate that the OKR was not fully achieved, while a score of 1 means the objective was met or even exceeded.

Scale interpretation:

•   0 to 0.3: Little to no progress made.
•   0.4 to 0.6: Some progress was made, but key goals were missed.
•   0.7 to 1.0: Significant progress; OKR achieved or overachieved.

5. Review and Reflect

• Once an OKR cycle is complete, it’s important to review and reflect on the results. Whether the objective was fully met or fell short, conducting a thorough review helps identify successes, failures, and areas of improvement.

  Ask questions like: 

• What worked well?  
• What could have been done differently?  
• Were the key results too ambitious or not challenging enough?

Example: If your objective was to “Increase website traffic by 20%,” and you achieved a 15% increase, you should assess what strategies worked and where you could improve to reach that additional 5%.

6. Align OKR Success with Company Goals

• Ultimately, the success of an OKR isn’t just about completing key results; it’s about whether those key results helped drive the broader company objectives. For example, if your goal was to increase customer satisfaction but your sales didn’t increase, it’s worth revisiting whether you focused on the right metrics.

Pro Tip: Always ensure that OKR success is tied back to the company’s long-term strategic goals. This keeps everyone aligned and ensures that the OKRs are contributing to overall business success.

7. Celebrate Successes and Learn from Failures

• Finally, don’t forget to celebrate successes. Recognizing when a team achieves its OKRs motivates them to continue striving for excellence. Similarly, when OKRs aren’t achieved, learning from the experience is critical. Whether through team discussions or individual reflection, analyzing what went wrong and making necessary adjustments for the next cycle ensures continuous improvement.

By consistently tracking progress, assigning accountability, and aligning OKRs with broader business goals, you can successfully measure and improve the outcomes of your OKRs.

Conclusion

Creating effective OKRs is a vital component of driving both employee and company success. By defining clear objectives, setting measurable key results, and maintaining alignment with broader business goals, companies can foster a results-driven culture. 
To streamline OKR implementation, consider using NotchHR’s performance management tools. They offer goal-tracking features that keep your organisation aligned and productive. Learn more about how NotchHR can help you succeed today.