Getting to grips with the basics
So you know the drill. We have a qualitative, inspirational objective that motivates the team and clearly describes what we want to achieve, and 3–5 key results that quantitatively describe the measurements of success for that objective.
Here’s what it might look like:
Objective: Customers love our new mobile app!
At FreeAgent, OKRs are set quarterly across the company and each key result is scored between 0 to 10 at various points throughout the quarter, and recorded in a company-wide Google Sheet. 0 means a total fail and a 10 represents an epic win, but there’s a surprising amount of nuance in scoring as we’ll see.
Impact or task?
The first step is recognising that there are generally two kinds of key result:
Impact key results: key results that describe the quantitative impact of the work e.g. ’24 enterprise sales’ or ‘20% reduction in churn’.
Task key results: key results that describe an action or output e.g finish project X or launch feature Y.
In the above example we see both types:
Mobile app available in iOS and Android app stores << Task
10,000 downloads by the end of the quarter << Impact
Average 4 star reviews << Impact
30% monthly active users << Impact
OKR purists will argue that you should only ever set impact key results, and that task key results are an anti-pattern to be avoided at all costs. This is sound guidance but in my experience it’s not always possible to articulate every objective in terms of neat quantifiable, measurable key results.
If you’re working on a project that spans multiple quarters for example, then it may be impossible to understand the impact of this work until beyond the initial quarter. You can sometimes think of alternative measurements that are indicative of future impact (positive feedback on a prototype for instance) but this just isn’t always possible.
Ultimately it comes down to your commitment to OKR dogma, but at FreeAgent we take a slightly more relaxed approach to this, and allow task key results if measuring impact isn’t practical within the timeframe.
Ideally though, task key results should be the exception and not the rule.
Impact OKR scoring
So hopefully we set all of our key results in terms of the measurable impact we hope to achieve. In order to score these key results we use the following formula: