OKRs in Clarity: Being Successful with Agile Strategy

In order to successfully implement OKRs, one of the most important things to have is the courage to fail. Set ambitious goals that inspire creativity, innovation, and change. OKRs should not include what you would achieve regardless. Yet, they shouldn’t be unattainable either. A good rule of thumb is that if you reach 70% of your target, you’ve done a really good job. And most importantly, celebrate successes! Accomplished key results reflect a feat of strength. This should be noticeable.

In the past, “strategy” meant drawing up a detailed action plan to achieve a goal and following it as closely as possible over a period of years. Nowadays, this approach no longer works. Our world is developing so quickly in all areas that a plan would have to be constantly corrected.

OKR therefore offers an agile strategic approach that thrives on regular reviews of success and failure. It is no longer necessary to carefully plan the path to achieving a goal because we assume that we will know a better way in a few months’ time anyway. Instead, only the most important next step is formulated as a short-term goal – these are the OKRs.

The three-month timeframe has proven itself in practice – long enough to really make a difference and short enough to remain flexible. Trends can be identified at an early stage and any necessary course corrections can be initiated in good time. Avoid planning OKRs for several periods in advance in order to retain the necessary flexibility.

Strategy development takes place at management level. However, OKR as a method for strategy implementation should not be understood as exclusively top-down. Instead, OKR offers the opportunity to involve the company’s base in the strategy work and to benefit from the operational expertise of employees. Involve employees closely in the design of objectives and key results. The commitment of the entire team is the decisive success factor for achieving objectives.

Establish OKR in your meeting culture and share regular status updates. In this way, the method increases employees’ identification with the goals and sharpens their focus on the purpose (“What is the purpose behind my tasks?”) – both important factors for the intrinsic motivation of employees and conducive to achieving the overarching overall goal. Make your OKRs easily accessible and findable for everyone.

Don’t make a list of everything that needs to be improved. Decide which one thing you really want to tackle now!

OKR is intended to help drive individual topics forward while consciously eliminating other topics. This is not about classic prioritization, where all other topics remain in a hierarchical backlog – no, it’s really about removing all topics except OKR from the backlog! Only if there are no hidden side issues can employees fully focus on achieving the objectives.

Too many objectives in a team at the same time indicate that there is insufficient focus or that your objectives are too fragmented. We recommend only one objective per team per quarter.

OKR is an important building block in the agile strategy toolbox. However, it is no substitute for a missing overarching strategy.

OKRs are short-term milestones and can only be meaningfully formulated if it is clear where the company wants to go in the medium and long term. The formulation of OKRs therefore requires other elements in your strategy framework (e.g., purpose, vision, mission, MOAL) that can be used as a guide for the OKRs.

For the introduction of OKR, you need a driving force with methodological expertise within your own ranks – an OKR champion or OKR master. This role drives the introduction forward with full conviction and at the same time brings the necessary methodological knowledge to the team. If the driving force or the know-how is missing, the OKR introduction may be doomed to failure and quickly lead to frustration for everyone involved.

Ideally, the OKR champion is a neutral person and not a team member themselves. This allows them to concentrate fully on moderating the OKR process without being involved in the content. However, a team member can also take on the role of OKR champion. It is important that the method is applied correctly, that the team is open to the method, and that there is a shared commitment to the objectives.

A correctly defined OKR sets the direction, but does not define the path. It describes the field of action in which the team is responsible for developing and testing measures. The key results should therefore not contain any recommendations for action, but only define the desired effect on the target group. The way in which this effect is achieved is then in the hands of the implementation team.

Example: As a KR, do not specify that employees should “Carry out 5 additional quality checks per day”. Instead, set the following target: “Reduce quality-related customer complaints by 50%”.

OKR is an agile method based on trial and error and the development of minimum viable products (MVPs). The intermediate results are analyzed on a weekly basis, new measures are defined and then tested.

In order to be able to see each week what effect the most recently implemented measures have had, the key results must reflect the impact of the actions with as little delay as possible. This requires early indicators (also known as “lead measures”), such as “number of visitors to our website” or “demand for demo appointments”. This is the only way to achieve a steep learning curve, draw the right conclusions, and optimize the procedure accordingly.

An example of how not to do it: The “number of contracts concluded” measures the change in customer behavior (outcome). However, in some sectors, it can take one to two years before a contract is concluded. It is therefore a late indicator (also known as a “lag measure“), where the effect of an action only becomes visible after a significant delay.

OKR is a method for implementing strategic changes (change-the-business), not for measuring performance in day-to-day business (run-the-business).

Instead, the performance of day-to-day work (run-the-business) can be measured using KPIs. These indicators are chosen for the long term, are permanently valid, and provide insights and control over the general health of the company. They help to sound the alarm if something goes wrong in the core business and performance does not meet expectations.

In contrast, OKRs are aimed at strategic changes. The objectives and key results are formulated so specifically that they are only relevant for the current period. In the next period, they are replaced by new objectives and key results. This focus on new objectives and metrics in each period enables a targeted focus on the currently most important change (change-the-business).

A good balance between change-the-business and run-the-business is needed to be successful. Therefore, you should not choose between using OKRs and KPIs, but use both – but each for the right purpose!

In order to successfully carry out strategy work with OKR, the teams in your company must have the freedom to define goals independently and implement changes. This is the only way to unleash creative potential and increase the necessary commitment. Top management provides medium and long-term strategic goals for orientation, but the teams can decide for themselves how they contribute to these goals based on the OKRs (= short-term goals).

In practice, this autonomy is often not given or is limited. On the one hand, top management sometimes finds it difficult to relinquish responsibility and refrain from issuing specific instructions. On the other hand, it can also be due to the structure, for example if changes are organized centrally (e.g., in the PMO) and teams are only responsible for operational implementation. One conceivable solution would be a cross-functional constellation of the OKR team consisting of project and PMO team members. Alternatively, you can also decide to only use OKR in teams that have the freedom to participate in change processes.