An introduction to OKR

OKR is a scalable goal tracking system that aligns company, team, and personal goals to measurable results. It guides everyone to work together in the right direction and drives constant progress.

What is the history of OKR?

Though it can be traced back to Peter Drucker’s Management by Objectives, the OKR framework that we know today was developed by Andy Grove and first rolled out at Intel.

This goal-setting system gained popularity after it was implemented at Google in 1999 by John Doerr. Now, many successful agile companies like Atlassian and Amazon have followed suit.

What are the components of OKR?

OKR has two main components, which are Objectives and Key Results.

1. Objectives

These are qualitative descriptions of what you want to achieve. Objectives are high-level statements that can motivate (or challenge) your agile teams to deliver their best.

Best practices when setting Objectives:

• Each team should have five objectives at most.

  • Objectives are qualitative and aspirational, not granular outcomes.

  • If you’re just starting your OKR practice, start with “roofshot objectives,” AKA goals that are hard but achievable. Success means achieving 100% of those goals.

  • As your OKR practice matures, graduate to “moonshot objectives,” AKA stretch goals that are beyond what’s deemed possible. Success means achieving 60% – 70% of the OKRs.

2. Key results

These are the quantitative metrics used to measure if you’ve achieved your Objectives.

Best practices when setting Key Results:

• Key results are quantitative and measurable, not to-do lists.

  • Each objective should have five key results at most.

Here’s an example of an OKR for a SaaS vendor:

Besides Objectives and Key Results, other components of an OKR are Initiative, Grade (or Score), Period (or Cadence), and Owner.

1. Initiatives

The projects or activities that can help you deliver Key Results.

Best practices when setting Initiatives:

• You may regard your team’s daily tasks as initiatives. For example, if you manage projects in Jira, then Jira issues are the initiatives.

  • If the initiatives aren’t helpful in delivering key results, modify them.

2. Period or Cadence

Period is how often you evaluate and grade OKRs during a cycle and create new ones.

Best practices when setting Periods:

• OKR may have dual planning periods: an annual cadence for company goals and a quarterly cadence for team and individual goals.

  • Conduct weekly check-in sessions to track goal progress.

  • Within less mature organizations, a custom shorter period (e.g., two months) is highly recommended.

3. Grade or Score

OKRs are usually graded on a scale of 0.0 to 1.0, with 1.0 being that an Objective is fully achieved.

Best practices when setting Grades:

• The ideal OKR grade is 60% – 70% (or 0.6 to 0.7).

  • Consistently scoring lower or higher than the ideal grade means that the objectives are either unclear or not ambitious enough, respectively.

4. Owner

Assign an Owner to every Key Result to foster accountability, transparency, and proper alignment.

Best practices when assigning an Owner:

• Every OKR must have an owner.

  • Though employees can collaborate on OKRs, there’s just one person responsible for reaching the goal.

  • Your company’s OKR framework must be owned by someone. This person (AKA the Ambassador) is responsible for its ongoing maintenance and management.

  • The Ambassador can be one of the department managers, HR personnel, or even external consultants as long as they’re the OKR Subject Matter Experts.

Why is OKR perfect for agile teams in Jira

Though there are other methods to measure progress (i.e., KPI, SMART, MBO), OKR could be the right goal tracking system for your agile teams in Jira if these issues happen frequently:

• Difficult to prioritize projects because teams have different priorities and there’s no streamlined business goal setting.

• Frustrating risks and blockers pop up even when retrospective and sprint planning are done.

• Lack of transparency to monitor progress even with features like Jira Roadmap and issue status. These features are great for monitoring the progress of projects or tasks, not objectives.

• No one knows who’s in charge of what. Jira assignee is only good for knowing the one responsible for an issue, not an overall goal.

• Poor cross-team collaboration.

• Staff don’t know how completing their Jira issues contribute to overall company goals.

• Staff are demotivated and it shows when checked against Jira metrics (e.g. decrease in average velocity).

• Lack of visibility into how project and team goals affect company growth. Even if there are organizational goals, they’re monitored in a different system like Confluence or Excel.

When implemented properly, the OKR framework can deliver 5 key benefits: focus, alignment, commitment, tracking, and stretching (F.A.C.T.S.). Now let’s see what F.A.C.T.S. means for individuals, teams, managers, and the company.

By following best practices when setting OKRs for your agile teams in Jira, you and your organization can enjoy the benefits listed above.