As we have seen, OKRs is a framework for creating focus on results, and naturally, there are guidelines on how to follow up and evaluate progress.
During the implementation of OKRs, each organisation needs to decide on a rhythm (cadence) that suits its internal processes and ways of working. A standard rhythm of strategic OKRs creation yearly and team OKRs each quarter has started to establish itself as more and more companies implement the framework.
An example of this OKRs rhythm can look like this:
– Towards the end of the year, the leadership gathers to develop OKRs for the upcoming year, with key results spanning the entire year (e.g., annual sales budget).
– At the beginning of the year, teams gather to set their goals for the quarter, based on the organisation’s annual goals. The ambition is to determine what the team needs to achieve in the quarter to bring the organisation closer to its annual goal.
– In cases where there are multiple levels of divisions and teams, they can set their OKRs in a top-down order, but teams further down in the organisation may set their OKRs before their division has set OKRs for example (as long as they can work towards the organisation’s common OKRs, it shouldn’t be a problem).
– Every week or every other week, OKRs are reviewed at the team level, documenting results and discussing reprioritization and resource allocation. The same exercise is also done at the leadership level to track how teams are progressing towards their OKRs.
– Mid-quarter, teams usually conduct a comprehensive review to assess status and score their key results. This is an important meeting to ensure focus and status – are we working on the right things, and are we making progress?
– At the end of the quarter, there is a final assessment of the quarter’s OKR scores and a retrospective discussion on what worked well and what didn’t in the OKRs process. This is done at both the team and company level to evaluate progress towards the annual goals.
– In many cases, some objectives are carried over from one quarter to another, but at the end of the quarter, new objectives and key results are set for the upcoming quarter.
– Towards the end of the fourth quarter, there is a comprehensive review of the organisation’s common (strategic) OKRs, while teams/divisions present their outcomes for the year.
Note that the above represents a full-scale implementation of OKRs throughout the organisation. Most organisations start with implementation at the leadership level or in a specific team. This allows for a gradual adoption of the rhythm, learning how OKRs work in the organisation, and seeing the value it creates before a broader implementation.
Scoring is a central part of OKRs, primarily focused on key results (in some cases, key results are aggregated to score an objective, and then scored again to score the entire OKRs set).
The purpose of scoring is to evaluate whether expected results are being achieved, if the focus is on the right things, and overall, if there is a need to reprioritize, skip a specific objective, or request more resources. Scoring also helps in setting key results by initiating discussions on how different outcomes should be scored. This can be straightforward when a key result is to achieve a specific number (e.g., what percentage did we reach?), but it becomes important when a key result is more binary, such as launching a product where points can be predefined for internal launch, beta launch, and full launch.
It is common to score both with numbers and ‘traffic lights’ (red, yellow, green). When scoring with numbers, it usually ranges from 0 to 1, where 0.3 represents minimal impact on the result, 0.7 is really good progress, and 1 is an exceptional achievement.
This type of scoring scale encourages ambitious stretch goals in setting key results, where a team should be satisfied if they achieve an average score of 0.6-0.7 on their OKRs.
organisations often find their own approach in this area. Remember that scoring is not about evaluation but an opportunity to adjust, focus, and improve.
A common question is how OKRs and scoring relate to performance reviews and compensation. The simple answer is a strong recommendation to separate the two. The main challenge is asking the organisation to set ambitious goals and then evaluate based on those goals – following the scoring system mentioned earlier, with an expectation of achieving only about 70% of the set goals.
Linking the two can easily lead to what is called “sandbagging,” where employees set cautious and easily achievable goals. This diminishes the power of the entire framework.
However, OKRs can be a tool in performance reviews and ongoing discussions about focus and how employees contribute to the team and organisation. As long as evaluation is not based on scoring, OKRs can be a powerful way to discuss individual contributions.
A model that occasionally emerges (including at Google) is a combination of OKRs as a strategic framework and committed results. It may seem contradictory after discussing OKRs, scoring, and performance reviews, but as long as the difference is clearly marked between regular OKRs and committed ones, it is a fairly elegant way to integrate the need for strategic focus with tracking business KPIs.
So, what can be a committed OKR? Think sales and cost goals, metrics that have significant consequences if the budgeted results are not achieved. The model of considering 60-70% attainment as a strong result and focusing on learning and prioritization does not fit here. Even though these committed OKRs may involve elements of stretch, the organisation needs to closely monitor that they are on track and take action if they fall behind.
In this case, a different scoring scale can be considered, where 1 represents the expected result. The team/leader negotiates this OKR with their manager, who provides resources, and the leader commits to delivering a specific result.
Naturally, these OKRs have higher priority and may be handled slightly differently in ongoing reviews and follow-ups.
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