OKR

What it means

OKR is a goal-setting method: the objective is qualitative ("shorten the monthly close"), and two to five key results are the measurable outcomes proving it was achieved ("close by the 10th in every month of the quarter").

It differs from KPIs in purpose. A KPI measures the ongoing run of the business and stays the same; an OKR describes a change the company wants within a specific period and is replaced afterwards.

An OKR is not a roadmap. A roadmap says what the company will build or introduce and in what order; an OKR says what measurable outcome that is supposed to deliver. A new reporting tool is a roadmap item, cutting the time it takes management to get the monthly figures is a key result, and it can be achieved by other means than a new tool.

How it works in practice

The cycle is usually quarterly with a short review. Few objectives work best - three for the company and three per team is the most that can genuinely be tracked alongside daily work.

In a small company OKRs work well as the link between the budget and what people actually have to do, and as a way to hold one version of the priorities with stakeholders rather than three.

A short weekly check-in works well: each key result owner records the current figure and one sentence on what is holding it back. Everyone sees the status on a single dashboard, so the end-of-quarter review holds no surprises and objectives that turned out to be unrealistic can be adjusted openly and in time.

What to watch out for

OKRs are not tied to bonuses - doing so turns an ambitious objective into a cautious one and the method loses its point. It is equally wrong to write a key result as a task ("implement the system"); a result should be measurable, not tickable.

A key result for which the company has no data source ends up scored by guesswork at the end of the quarter. If the goal is to shorten the time customers take to pay, reporting has to be able to calculate that time at the start of the cycle; otherwise one impression is compared with another and the method loses credibility.