Cheat notes: OKR fundamentals

Anatomy of OKR framework

Example -

Objectives Key results Score Initiatives

Grow our Add 500k additional new users 0.5 Task A
Singapore user in Q1 Task B
base

Increase user retention from 0.5 Task C

50% to 60% Task D

Objectives -
● Objectives help us answer the question - “Where do we want to be by the end of our
OKR period?”
● Objectives should be qualitative and inspirational.

Key results -
● Key results help us answer the question - “How do we know if we are getting close to our
objectives?”
● Key results should be quantitative

Score -
● Score is a combination of progress on Key result and confidence of achieving that
progress
● Score is typically assigned on a Key result level
● Score at the start of the period is typically 0.5 - assuming that there is 50% confidence of
achieving 100% progress on that key result
Initiatives -
● Initiatives help us answer the question - “What are we going to do to achieve our key
result and eventually, reach our objective?”
● Initiatives are the list of actual tasks performed by teams to reach that particular Key
result

Hierarchy of components
● There can be multiple Key results within an objective
● There can be multiple Initiatives within a Key result
● Therefore, hierarchy of OKR components is as follows -
○ Objectives > Key results > Initiatives

OKRs place in the big picture with other planning tools

 ● OKRs are most useful at the execution level in an organization.
● OKRs can take cues from Mission, Vision, Strategy and Roadmap. It can then be used
to set up short-medium term goals/ objectives.

How often should you review OKRs -

● Frequency with which OKRs should be reviewed is inversely proportional to the maturity
of your market, business, team and process
○ If you are in a nascent market (with low maturity), you should review OKRs more
frequently (at a higher cadence)
○ If your business is very new (low maturity), frequency of OKR review should be
higher (high cadence)
○ If your team is new to the OKR process (low maturity), you should have a higher
OKR review cadence.
● Organizations can also adopt a dual cadence approach where in they can have different
cadence for OKR review at different levels.
○ For example - Organization level OKRs can be reviewed once a year and each
team within the org can review and update OKRs every quarter.