Updated: Nov 1, 2021
Company leaders implement OKRs to have clear planning, alignment and tracking of progress, but often underestimate how regular OKR reviews create valuable team routines. OKRs (Objectives & Key Results) is a powerful review method if the data is set-up in a collaborative way and maintained and tracked regularly.
Set-up OKRs & how to calculate them
After basic set-up & process OKR trainings, leaders and teams are enabled to develop inspiring & meaningful Objectives and outcome-oriented & clear Key Results. However in our implementation experience, we see that most teams do not align at the beginning of the quarter or semester on how to measure or calculate the OKRs against a percentage range.
That leads to a lot of confusion and misunderstanding if we either score against an absolute target value or an achievement range. Some clients even have competing data sources, which need to be aligned before the tracking cycle.
Examples how to calculate numerical OKRs:
Set up a range from As-Is to To-Be value, e.g.
Retention rate should improve from 10% - 16% from 1 July to 30 Sept. or
Customer base should grow from 10K to 16 clients.
Therefore 6% or 5K clients represents the 0 - 100% range to measure, e.g. 12% retention or 2K customer increase means 33% achievement.
We could also measure against an absolute value without a starting point which is a bit more abstract and not so clear for team level.
Decrease delivery speed to 30 minutes by end of Q3, i.e. if we are in 40 min, we achieved 66%
For both schemes we advise to use absolute values rather than percentages if possible for a clear communication and better inspiration and alignment. Furthermore we need to define if the values need to be measured against a monthly benchmark or towards a linear / non-linear monthly result. e.g. July needs to be 12% retention rate therefore end of July we achieve 100% with 2% uplift. It depends if you want to track monthly achievements or the uplift and trajectory during the quarter.
Examples how to measure against achievements and work outcomes:
To measure if the work is fully done, we can use outcome related OKRs which can be measured binary on 0 - 1 achievement rate.
Finish and roll-out the new payment system
Set-up and run quarterly employee surveys
However most roll-out take a full or even multiple quarters and leaders and teams want to see if any progress is made, which could be measured by deliverables or milestones, ideally set-up at the beginning of the OKR tracking cycle:
Finish and roll-out the new payment system measure on milestones:
Develop payment system
Test payment system
Launch payment system
Implement & train users
For easy tracking we would recommend 3 to max. 5 deliverables and weight them
equally as in this example each by 25% achievement, of course you can also weight them according to preferences, but remember we want not to overcomplicate OKR tracking.