How to formulate awesome OKR(A)’s

This method outlines how we formulate OKRAs at Inventium. For more general information about OKRs and alternative ways of doing them, check out – The What Matters website and this TED Talk by John Doerr.

PART ONE – Company Goals

1. Take your team through the top-level company goals. Depending on the size of your company, you may need to also ladder these down to a Divisional or Departmental level for your team to connect with.
2. You may then have each functional team leader translate these goals to make them relevant to their function and identify opportunities to focus on to achieve them.

PART TWO – Energy Circles

1. Have each team member complete their individual Energy Circle. The Energy circle helps identify the most valuable ways someone can spend their energy and ensure it reflects the type of work that energises them.
2. Here are a few tips when it comes to Energy Circles:
   1. First, it should reflect only the key elements of someone’s role and typically have no more than five segments.
   2. You want people to think about output when completing it, not time. Output is inherently more valuable, hence why it’s not a ‘time circle’!
   3. When people first create it, there will still be some default to hours. This is okay as a starting point, but ultimately, they need to be thinking, “when I’m at maximum energy, where are the most valuable places to spend that energy” and “am I energised by that”.
      1. For example, if they’ve done it based on time, “Project Admin” is 50%. In reality, this might actually be sucking 80% of their energy, meaning they don’t have as much energy as they think left for the other (and potentially more important) stuff.
   4. Organise a discussion with the team member to ensure you are both aligned on their Energy Circle. Sometimes this may prompt valuable role clarity discussions if someone is not energised by key parts of their role or if they are spending energy on the wrong things.
3. Use your Energy Circle to guide the number of OKRAs you set for each focus area. For example, if something equates to 50% of your energy, that may require two OKRAs.

PART THREE – Setting OKRAs

1. Each team member should be given the first opportunity to set their own OKRAs.
2. Tips for setting OKRAs
   1. You should aim for 3-5
   2. An Objective is what you want to achieve. These are significant, concrete, action-oriented, and should be worded in an inspirational and exciting way.
      1. An objective can be long-lived and worked towards over several periods (e.g. quarters)
      2. You should be able to clearly connect these to the top-level goals shared in Step One to help people understand how their work impacts and connects with the organisation’s purpose.
   3. Key Results benchmark and monitor how you will get to the objective. These should be challenging, measurable and verifiable.
      1. Ideally, Key Results should be value-based (e.g. achieve $X savings, hit X satisfaction score) instead of activity-based (e.g. complete X project, run X number of workshops).
      2. Key results should be time-bound and evolve as the work progresses.
   4. Activities detail the critical tasks you need to complete to achieve your key results and, therefore, your objective.
      1. These can change over time but are an excellent tool to help clarify the assumed path that needs to be taken.
      2. These often include several ‘sub-projects’ that ensure your objectives stay at a higher level and are connected to organisational goals.
   5. Identify which OKRAs are committed vs aspirational. Committed OKRAs are the ‘must meets’, for example, a base sales target. Aspirational OKRAs are used to stretch and challenge team members beyond BAU in a motivating way. Typically a ‘70% met’ is a good result for these, with 100% excellent. Ensure team members have a healthy balance of both committed and aspirational OKRAs.
3. Each team member should meet with their manager to review and confirm their OKRAs.
4. Once set, OKRAs should be shared transparently with the broader team to show where people are focusing their efforts and identify areas for collaboration.

PART FOUR – Review and Reset

1. Team members should frequently review their activities, track progress against their OKRAs, and discuss any blockers in regular check-ins with their manager.
2. At the end of each quarter, team members should formally self-reflect on their progress against their OKRAs and identify any that need re-defining or re-setting. You can learn more about our self-reflection process here (How to conduct a performance review by self-reflection).
3. Each team member should meet with their manager to share their reflections and work through any required changes.