Author:
Gail Thomas

Since Andy Grove’s system of Objectives and Key Results (OKRs) was first adopted by Google and memorialized in John Doerr’s book, “Measure What Matters”, the methodology continues to help leaders and organizations worldwide to achieve their most audacious goals. Yet occasionally, we find ourselves wondering “wait, what exactly does that word mean?”

We decided to take a step back to the basics: definitions. Here you will find a glossary of definitions for terms which are commonly used in the OKR world. Keep coming back here as we add new definitions to the “ABCs of OKRs.” Enjoy!

A

Accountability - OKRs are a tool to create ownership over the goals being set. Because they are written and tracked regularly, OKRs provide a practical reference point for progress or falling short of a target. OKRs differ from other goal-setting systems in that they clearly define the mile markers (Key Results) along the way to the “finish line” (Objective).

Align - Bringing visibility to and uniting teams in support of common goals. Setting OKRs at various levels of an organization surfaces a company’s top priorities. This transparency increases the likelihood for success. OKR Superpower #2 is Align.

Alignment - A state where managers, teams and individuals clearly link their day-to-day activities to the organization’s goals. OKR Superpower #2 is Align.

Aspirational OKRs - A common category of OKRs, the other two being Committed and Learning. This type pushes us to be audacious. They require teams to stretch well past the usual to make them happen. For this reason, they’re harder to accomplish, but they are useful because they push teams to think and act differently and get outside our comfort zones. The idea is that if we organize around reaching 100% of an Aspirational OKR, we may only make it to 70%. But 70% of a big, audacious goal gets you much farther than just 10% of a mediocre goal!

B

BHAG - The acronym for “Big Hairy Audacious Goal” — huge and daunting — like a big mountain to climb. This memorable phrase comes from Jim Collin’s book, Good to Great.

Bottom-up OKR - Any OKR that is formed in response to an OKR set at a higher level in the organization. With clear information and communication flowing from an organization’s top layer to the entry level and visa-versa, the ideal result is engagement and alignment. The best OKR implementations use a 50/50 mix of top-down and bottom-up approaches. An example would be a car dealership whose top-level Objective is to become the leading electric car dealership in the region. A service technician at the dealership in support of that OKR sets an Objective to “Run a month-long mobile servicing pilot,” along with a set of related Key Results.

Business As Usual - The day-to-day or routine operations and activities of an organization or team. Even though routine activities are often challenges, they are not the same as OKRs. Instead, OKRs describe what change is needed, and how we want to do things differently. That’s why OKRs are the antithesis of “business as usual.” The acronym “BAU” is often used for “business as usual.”

C

Cascading - The process by which higher level OKRs are used to guide teams and individuals as they create their own OKRs. This process creates alignment throughout the company. An example would be a company-wide Objective: Become the leading electric car dealership in the region with a Key Result to Makeup 60 percent of all-electric cars in the region. Cascading down, the sales manager’s might turn that Key Result into his Objective with his own Key Result: Increase the number of cars sold by 55 percent over the last year. In turn, the sales associate could then make that Key Result into his Objective.

CFRs - This abbreviation stands for Conversation, Feedback and Recognition, and represents all the interactions that give OKRs their human voice and ensure that OKRs do not live in a vacuum. OKRs and CFRs are mutually reinforcing, with CFRs happening throughout the OKR cycle — including in one-on-one meetings: in-person, over video chat, or even in regular email updates. CFRs catalyze transparency, accountability, empowerment, and teamwork at all levels of an organization. At the end of an OKR cycle, they facilitate going beyond the grading of OKRs to dig deeper into why something was or wasn’t achieved.

Committed OKR - A common category of OKRs, the other two being Aspirational, and Learning. Unlike an Aspirational OKR, these OKRs are the goals we all agree need to be achieved. Without them, we don’t have success. We’ll prioritize everything to make sure this OKR is successful by the end of our 90 days.

Continuous Performance Management - This is an alternative to annual reviews. Feedback is provided continuously throughout the year through structured quarterly check-ins and improving how our 1:1s are conducted. Continuous Performance Management creates space for critical questions: planning and reflecting on OKRs, manager-led coaching, bi-directional feedback, and career conversations.

D

Directional Alignment - One of two types of OKR alignment: Directional and Explicit. Directional Alignment tends to be more “fluid” than Explicit alignment, as it means using higher level OKRs as a guide for developing your team or individual OKRs. It works well when an organization wants to empower its teams to use their creativity and expertise to achieve organizational OKRs. An example would be: a SaaS team has a top level OKR/Objective to “Reach meaningful scale by achieving 5,000 software subscriptions/month.” The Business Development team might create an OKR to “Find 1-3 Acquisition Channels.”

E

Equity Pause - A process step during OKR-setting when teams and individuals ask if their OKRs are inclusive. This naturally requires analyzing if you are making space for everyone’s voice, or if the direction and goals reflect an unconscious bias toward one group over another. If OKRs are deemed exclusionary or biased, this is the best time to revise them to be more inclusive. The concept was developed by the 228 Accelerator as a part of the Equity Meets Design framework. We learned about this concept from the Creative Reaction Lab.

Explicit Alignment - One of two types of OKR alignment: Directional and Explicit. Explicit Alignment tends to be more”rigid” than Directional Alignment, as it entails using a measurable Key Result from a higher level OKR as the basis of your team or individual Objective, then writing your own set of Key Results to support it. Also called “inheriting” a Key Result. It often works well when an organization needs laser focus or is navigating a crisis. An example would be: a SaaS team has a top level Key Result to “Achieve an NPS (Net Promoter Score) above 90.” The Marketing team inherits this as an Objective, and develops a set of Key Results for it: “K1: Ensure every set of forms is reviewed within 12 hours. K2: Ensure every email is reviewed within 12 hours.”

F

Focus - The center of attention. Using OKRs, teams are able to prioritize their time by setting only a handful of OKRs. This enables drilling down on and aligning with the organization’s top priorities. OKR Superpower #1 is Focus.

G

Grading OKRs - At the end of an OKR cycle, teams determine whether an OKR was accomplished, and to what degree. This process should be done objectively. These scores should be used to reflect on the past quarter, as a way to set up for the next one.

I

Input Goals - One of three ways to define a desired end state: inputs, outputs, or outcomes. An Input OKR (or Key Result) is based upon things that you can control, such as testing three marketing campaigns, relaunching a website or reducing the weight of a component. If your Objective is to elect a candidate, the input goal could be to “knock on at least 10,000 doors.”

K

Key Result -The “KR” in OKRs, these are written benchmarks or measurements which lay out “how” an organization, team, or individual plans to accomplish their Objective. Effective KRs should be specific and time-bound, aggressive yet realistic. Most importantly, KRs are measurable and verifiable — they track progress towards the Objective. Completing a Key Result is not subjective. At the end of an OKR cycle, you either meet the performance benchmark or you don’t. Key Results work as a set, must be tied to a specific Objective, and are used to guide actions throughout each cycle. There should be no more than five Key Results per Objective.

L

Laddering OKRs - When teams or individuals below the executive level set their own OKRs which may not align directly with the direct manager’s OKRs, but do align with the company’s overarching objective.

Learning OKR - A common category of OKRs, the other two being Committed and Aspirational. This type encourages teams to test a hypothesis or study a new approach by exploring an unproven theory or strategy. They are useful for defining success when the outcome is uncertain or undefined.

M

Measure What Matters Book - The #1 New York Times Bestseller book written by venture capitalist John Doerr which reveals how the goal-setting system of Objectives and Key Results (OKRs) has helped companies achieve remarkable growth, using examples from tech companies like Intel and Google to nonprofits like the Gates Foundation and ONE. The first edition was published in 2018, and the second addition is expected out in 2021.

Measurement - According to Oxford Dictionary, “The act or the process of finding the size, quantity or degree of something.” This is a vital component of Key Results, as it allows you to set exactly how you will determine whether (or to what degree) you have accomplished the desired outcome. For example, a team’s Objective to”Win the Super Bowl’’ might set their Key Results to be: 1) “Passing attack amasses 300+ yards per game, 2) Defense allows fewer than 17 points, and 3) Special-teams unit ranks in top 3 in punts return coverage.”

Metric - According to Oxford dictionary, “A system or standard of measurement.” A required feature of a good Key Result, it is a specific, numerical reference point that determines the degree to which a goal was achieved. Depending on the industry or circumstance, it might be a number, figure, statistic, or a rating.

Moonshot - This refers to a goal that is so big, that it may seem impossible to achieve at first. The intention is to set the bar so high that, even in failure, the team makes more progress than they would have with a more realistic target. Norman Vincent Peale once said, “Shoot for the moon. Even if you miss, you’ll land among the stars,” a philosophy Larry Page often adopted at Google too.

O

Objective - The “O” in OKR — the written statement of “what” you (an organization, team, or individual) want to achieve over the next cycle, typically 90 days. It describes a future state that seems almost unachievable, and aligned with a company’s overall mission and goals. Objectives are significant, short, concrete, action-oriented, and inspirational. The three types of Objectives (and OKRs) are Committed, Aspirational, or Learning.

OKR Coach - An expert who trains and supports management and teams in using the OKR and CFR methodology and process. This guidance often includes hands-on assistance with crafting, implementing and refining OKRs, as well as explaining how to conduct CFRs. Additional resources are available here and here.

OKR Superpowers - OKRs give organizations five strong advantages or attributes which help drive a company’s success. Specifically, these OKR advantages, which set them apart from other goal-setting systems, are: 1) Focus, 2) Align, 3) Commit, 4) Track, and 5) Stretch. Together, John Doerr refers to these “Superpowers” as F.A.C.T.S.

OKRs - O” stands for Objectives and “KRs” stands for Key Results. OKRs are a collaborative goal-setting methodology used by management, teams and individuals to set challenging, ambitious goals with measurable results. OKRs are how you track progress, create alignment, and encourage engagement around measurable goals.

Outcome Goal - One of three ways to define a desired end state: by inputs, outputs, or outcomes. An Outcome OKR (or Key Result) is the most powerful as it tends to describe the desired end result itself, rather than what you do to get there. Outcomes are also more complex than inputs or outputs as they address an underlying challenge more directly — reflecting a before and after. Crafting a great Outcome Key Result can require extra time for reflection, but the conversation that this provokes is often very enlightening. Examples include increasing a renewal rate by 10% or winning an election.

Output Goal - One of three ways to define a desired end state: by inputs, outputs, or outcomes. An Output OKR (or Key Result) is the effects of your inputs, such as increasing sales revenue, reaching a performance benchmark or achieving a 63% subscriber renewal rate. Effective Outputs embed the actions (inputs) within the goal. If your Objective is to elect a candidate, the Output Key Result could be to “get 20,000 people to commit to voting for her.”

T

Tracking - Monitoring or following OKRs to ensure that they are working and achieving the desired results is key to the success of the methodology. OKRs aren’t meant to sit on a shelf, they should be checked on a regular basis and graded quarterly. This process is brought to life in CFRs which facilitate conversation, revision, and adaptation as needed. OKR Superpower #4 is Track for Accountability. Additional resources are available here and here.

Transparency - Visible, openly-shared, seen by all. One of the key virtues of OKRs is that everyone’s goals — from the CEO down — are openly shared. This paves the way for deeper conversations, more effective focus and collaboration, as well as alignment between departments. Openly shared OKRs show the connections between each individual’s work, team efforts, departmental projects, and the organization’s overall mission, which is why transparency is the backbone of Superpower #2, Align.