Ultimate Guide to Objective and Key results – OKR Meaning and Examples
Do you dread setting goals for your organization as you don’t see useful […]
Companies often face challenges in effectively aligning their company-level objectives with the goals of individual teams.
Silos and mismatched efforts can arise when there is a lack of clarity on how company OKRs should translate into actionable goals at the team level.
In this blog, we tackle these issues head-on. We provide actionable insights to bridge the gap between company and team OKRs.
Understand the details of rolling out company and team OKRs and their differences. Know how to avoid common mistakes and communicate the value of aligning these goals to the team.
What is the main difference between Company and Team OKRs?
The key difference between Company and Team OKRs lies in their scope and focus. Company OKRs set the overarching vision and priorities, while team OKRs are more tactical and focus on critical initiatives each team must undertake in the next cycle.
For example, a company OKR may be “Launch 5 new products this year.” The product team would then develop specific OKRs around releasing Product A in Q1, increasing conversion rates for Product B by 20%, etc. The marketing team’s OKRs would center on promoting the new products through various campaigns. And so on.
What are the different levels of OKRs?
By aligning OKRs at different levels, you create a cohesive framework that ensures everyone is working towards the same strategic objectives. It also allows more clarity and accountability at each level of the organization.
1. Company-level OKRs
They focus on the big picture and communicate what the organization aims to achieve within a certain timeframe, usually a quarter or a year. They’re typically set by the leadership, and teams align with them.
For example, a company-level objective might be to increase market share by 10%, with key results related to customer acquisition metrics or product expansion.
2. Department or Team-level OKRs
They break down the larger company objectives into smaller, actionable goals that are relevant to the functions and responsibilities of each team.
Department or team-level OKRs should support the overall company objectives while also addressing the unique challenges and opportunities within each department.
For instance, a sales team might be focused on increasing revenue by a certain percentage, with key results related to customer retention and upselling opportunities.
3. Individual-level OKRs
These OKRs should directly contribute to the team and department goals, which in turn support the company’s overarching objectives.
They help employees understand their role in achieving broader organizational goals and provide clarity on what is expected of them.
Individual OKRs should be challenging yet achievable and should align with the employee’s role and responsibilities.
For example, an OKR for a marketing specialist might be to increase website traffic by 20% with KRs related to SEO performance.
Company OKRs vs. Team OKRs
Here is a comparison table for Company OKRs versus Team OKRs.
| Aspect | Company OKRs | Team OKRs |
| Hierarchy | Top-level objectives set by the company leadership | Contribute to company OKRs and set by the teams |
| Stakeholders involved | CEO, Executive Team, Board of Directors | Team Leads, Department Heads, Team Members |
| Prerequisites | Strategic planning process, SWOT Analysis, Organizational vision and missions, etc. | Company OKRs and understanding of team capabilities |
| Alignment | Aligns with company vision and strategic priorities | Aligns with company OKRs and contributes to them |
| Timeframe | Often set annually or quarterly | Same as the company OKRs or shorter |
| Measurement | Metrics tied to overall company success | Metrics tied to team performance and contribution to the company |
| Flexibility | Less flexible due to impact on an entire organization | More flexible to adapt to team dynamics and goals |
| Example | Company-level OKR Objective: Increase market share by 15% in the next fiscal year Key Results:
The company OKR set the priority for everyone to increase the market share. The goal owners include senior leaders and managers. | Sales Team OKR Objective: Support the company’s market share growth objective Key Results:
The sales team OKRs align with and support the company OKRs. The goal owners include team leaders, department heads, and team members. |
How to roll out the company and team OKRs?
You must know it is a skill to write meaningful goals and align company and team OKRs to enable high performance in your team.
These steps will help you bridge the gap between company and team OKRs so that everyone understands their roles and responsibilities well.
1. Educate teams on the OKR framework
Schedule training sessions or workshops to educate teams on the OKR framework, including its principles, benefits, structure, and best practices.
This could involve collaborative meetings, email updates, or presentations by senior leadership.
Provide examples and case studies to illustrate how OKRs work and how they contribute to organizational success.
2. Set and communicate company OKRs
Identify and articulate high-level objectives that reflect the strategic priorities of the organization. Facilitate collaborative sessions with key stakeholders to define and finalize company-level OKRs.
For example, a company may set a goal to increase market share by 20% in the next fiscal year.
Ensure that OKRs are measurable, achievable, and time-bound. Encourage input from cross-functional teams to promote buy-in and alignment.
Clearly communicate the company’s objectives to all employees to ensure alignment and understanding across the organization.
3. Have teams draft their OKRs
Guide teams on how to draft effective OKRs that align with company objectives. Teams should focus on setting no more than five key objectives to maintain clarity and focus.
For instance, a sales team might draft OKRs related to increasing sales leads, improving conversion rates, and expanding into new markets.
4. Review and align team OKRs
Collaborate and negotiate on the final OKRs for each team to ensure alignment with company objectives. Provide feedback and guidance to adjust team OKRs as needed to ensure alignment.
For example, if a marketing team’s OKRs are not directly contributing to the company’s goal of increasing market share, they may need to revise their objectives.
5. Develop OKR execution plans
Work with individual teams to develop execution plans aligned with the company’s strategic objectives. Decide on the cadence of OKR check-ins, OKR owners and contributors, OKR best practices, Best OKR software to use, etc.
Assign ownership and responsibilities for each OKR and define specific actions and timelines for achieving key results.
6. Track progress and conduct check-ins
Implement a system for tracking progress towards OKRs, such as using OKR software.
Conduct regular check-in meetings to review progress, discuss any challenges or roadblocks, and make necessary adjustments to execution plans.
Create a safe environment for your people to share their concerns. Use these check-ins to support, celebrate successes, and motivate teams.
7. Refresh in each cycle
At the end of each OKR cycle (for example, quarterly or annually), refresh company and team OKRs for the next cycle.
Evaluate the effectiveness of current OKRs in driving desired outcomes and consider feedback from teams and stakeholders.
Adjust OKRs as needed to reflect changes in business priorities or market conditions.
8. Learn from your mistakes and fix alignment
Continuously monitor and evaluate the effectiveness of OKRs in driving alignment and achieving desired outcomes. Learn from any mistakes or misalignments and make necessary adjustments.
Conduct comprehensive reviews at the end of each OKR cycle to assess overall performance and identify improvement areas.
For instance, if a team consistently fails to meet its OKRs despite efforts to align with company objectives, it may indicate a need to reassess the team’s capabilities or the feasibility of its goals.
Why company and team OKRs must be aligned
The company OKRs provide the strategic framework and direction to the whole organization. Team OKRs break these down into bite-sized objectives that can drive day-to-day work.
Team OKRs turn high-level vision into practical execution on the ground level. They enable every team to move the needle on top-priority goals through concrete, day-to-day actions.
You can see the above alignment with the following OKR example.
Company-level OKR
Objective: Increase Annual Recurring Revenue (ARR) by 30%
Key Results:
- Achieve a 20% increase in new customer acquisition
- Improve customer retention rate by 15%
- Expand product offerings to target at least two new market segments
Sales Team OKR
Objective: Drive new customer acquisition of 20%
Key Results:
- Close 50 new enterprise-level deals
- Increase average deal size by 25% through upselling and cross-selling strategies
- Achieve a 20% increase in qualified leads generated through targeted marketing campaigns
The Sales team OKR directly ladders up to the company OKR of growing revenue. By getting bigger deals, increasing deal size, and increasing qualified leads, the team is positioned to impact the company’s overall revenue goal directly.
Company and team OKRs must be aligned to ensure that the efforts of individual teams directly contribute to the overarching goals and the organization’s success.
When they are aligned, everyone is working towards the same strategic objectives in their day-to-day work, promoting cohesion, focus, and collaboration.
Why use OKRs to set goals for the company, not individuals?
This question might seem counterintuitive as it is recommended to create OKRs for everyone and align them with the business, but there is a usual problem in setting OKRs.
The problem
Individuals tend to create OKRs that seem essential to them but don’t really contribute to the company via team OKRs. Let’s understand this with an example of a Sales team.
For example, if individual sales representatives are left to set their own goals, they might choose targets based on their personal performance metrics, such as the number of sales calls made or emails sent.
This approach may not align with the broader company goal of increasing ARR. For instance, a salesperson might set a goal to make 100 sales calls per week, which is easy to measure but does not directly contribute to the company’s revenue if the calls are not converting into meaningful leads or deals.
The solution
Instead of allowing individuals to set isolated goals, the Sales team should establish shared objectives aligned with the company’s objective of increasing ARR.
For example, the team could set an OKR to increase qualified leads generated through targeted marketing campaigns.
This objective drives collaboration among the team members and aligns individual efforts with the overarching business goal.
Key results could include metrics such as the number of qualified leads generated from marketing campaigns or the percentage increase in lead conversion rates.
By using OKRs to set goals for the team and company, rather than just individuals, the focus shifts from individual outputs to collective outcomes, enabling collaboration and alignment and ultimately driving success for the company.
Conclusion
In conclusion, mastering the creation of meaningful company OKRs and linking them with team OKRs is crucial in strategic business planning and execution.
By grasping the relationship between company and team OKRs, you can formulate more impactful objectives that drive alignment throughout your organization.
If you’re looking for help in creating powerful business and team-level OKRs, working with OKR consultants can make a world of difference.
These OKR experts have the know-how and experience to help organizations create and implement OKRs that are customized to their specific goals and requirements.
