Setting high-level goals may seem easy, but organizations often struggle to show their employees how their work supports the company’s vision. In fact, a recent study by Leapsome found that 42% of employees believe goal-setting is one of the most poorly implemented processes in their organization. At the same time, 43% of respondents said clear goals made them feel engaged in their work, and more than half said goal-setting and feedback processes were so important to them that they would choose to stay in their job for these reasons alone.
When done right, goal-setting can not only improve employee retention and engagement but also drive organizational alignment and overall performance.
The secret lies in connecting high-level goals with on-the-ground action. The Objectives and Key Results (OKR) framework helps you break down goals into digestible chunks, so that every level and department in the company can contribute to achieving the organization’s ambitious objectives.
Setting up OKRs may seem intimidating – that’s why we’ve created a customizable OKR template that you can use starting today. In this article, we’ll explain the framework and show you how to use our OKR template to connect your employees with your organization’s vision.
What are OKRs?
OKRs (Objectives and Key Results) are a goal-setting system that allows you to guide and focus your efforts, create more impact, align actions, and mobilize everyone around the same vision.
The essence of OKRs is simple: break ambitious goals down into clear, manageable, and measurable results. OKRs chart a path to success that drives employee engagement. And you should take employee engagement seriously: research shows that highly engaged employees achieve better results, attract more customers, retain customers for longer, and “are more likely to stay with the organization than those who are less engaged.”
Andy Grove, the third employee of Intel and former CEO, is the creator of the OKR framework. In 1983, Grove introduced the term in his book “High Output Management.” John Doerr, another Intel veteran and successful venture capitalist, brought OKRs into the spotlight over the decades – but it’s only in recent years that this framework has gained popularity. OKRs have now become the most widely used goal-setting method by companies of all sizes – from Google, Spotify, and Netflix to small and start-up businesses with just a few employees.
The OKR Formula
🎯 We will progress in achieving [OBJECTIVE] by reaching [KEY RESULTS]
This is the basic structure for defining OKRs. Now, let’s dive into the components of this formula. 🔬
What are the components of an OKR?
1. Objectives
Objectives are goals that support your company’s overall mission, fostering transparency and alignment by spreading the idea of working towards the same goal throughout the organization.
Objectives are qualitative and have the power to unite team members. They are concise and straightforward. They are also ambitious, but not unrealistic.
Keep in mind: objectives shouldn’t just be an expansion of something you’ve already mastered – they should be revolutionary.
2. Key Results
Key Results are the milestones you will achieve along the way to reaching your objective – they represent how you will achieve your goal.
Key Results can also be considered pieces of the bigger picture. They show us how to achieve the objectives and allow us to track progress and measure success – so they should be measurable.
Keep in mind: Key Results should be significant enough to celebrate when achieved.
5 Steps to Get Started with OKRs
1. Define Long-Term Business Priorities
Start with your company’s overall strategy and vision. Where do you want to be in three to five years? What are your long-term objectives and business priorities?
Note: “long-term” can vary in duration depending on the industry.
2. Translate Business Priorities into Annual OKRs (Strategic Objectives)
Choose three or four business priorities that support your vision, and then focus on those priorities to define your annual strategic OKRs. This will set you in the right direction!
3. Break Down Annual OKRs into Quarterly OKRs (Tactical Objectives)
When broken down into smaller pieces, big goals seem less daunting. So it’s time to break down your annual OKRs into quarterly objectives and key results.
Quarterly cycles can easily be divided into 13 weeks. You can aim for a 10% progress each week, plus a grace period of 2 to 3 weeks to start or overcome challenges.
4. Cascade Company OKRs into Team and Individual OKRs
Enable and guide teams/departments to formulate quarterly OKRs that support the company’s OKRs.
Give individuals the opportunity to take ownership of specific key results or an entire OKR and set their own performance goals. Focusing on goals should become an integral part of daily work; it helps individuals prioritize and provides everyone with the highest value for their efforts.
5. Track – Adjust – Praise – Repeat
Regularly tracking and adjusting OKRs will ensure that you are moving in the right direction and pursuing relevant initiatives.
Celebrating successes at work and providing constructive feedback helps teams learn and progress. The result is improved performance and engagement – the pillars of successful organizations.
How to Use the Free OKR Template
Our free OKR template is the perfect way to test the OKR methodology before moving to dedicated software. Follow the steps below for a best practices-based approach. Customizing our Google Sheets template will help you get the most out of the OKR model.
- The Basics
- Define Strategic Objectives
- Select Key Results to Measure Success
- Determine How to Measure Key Results
- Assign Values to Key Results
- Assign an Owner or Responsible Party
- Set a Clear Deadline
Step 1: The Basics
This step will guide all your OKR cycles – you just need to adapt the cycle each time, and it will help you keep your company’s vision in mind at all times!
- Go to the “Company OKRs” tab
- Add your company name
- Write down your company’s vision
- Enter the current OKR cycle
Step 2: Define Strategic Objectives
The OKR framework allows you to refocus your strategy and concentrate on impactful initiatives. So, don’t try to do too much at once. Three to five objectives per OKR period are a realistic number to drive teams without overwhelming them.
Your selection of key initiatives should be ambitious but carefully thought out – make sure to work together with your leadership team to craft company objectives. The same goes for department and team objectives: to maintain alignment, OKRs shouldn’t be top-down decision-making. Involve your entire team and listen to their ideas!
- Add 3 to 5 objectives
- Same for team objectives – just use the “Team OKRs” tab
- Use qualitative and ambitious statements (e.g., “Become the top gourmet jam producer”)
Step 3: Select Key Results to Measure Success
Just like with your objectives, you should focus on a few key results. These key results should enable you to achieve the associated objectives.
Here, you need to be specific and not shy away from numbers – they will help you track progress and know when to realign your strategy or aim for more ambitious goals.
- Add 3 to 5 key results per objective
- Remember, key results should be measurable
Step 4: Determine How to Measure Key Results
How will you measure your measurable results? Will it be a Yes/No measure for completing a project (e.g., relaunching the Mars Marmalades brand)? A percentage (e.g., 27% increase in sales)? A numeric measure (e.g., reaching 896 companies in the distribution network)? Or would you prefer to define it in currency (e.g., achieving $4,000 in annual recurring revenue per distributor)?
- Determine how to measure each key result by selecting one of the options in column C
Step 5: Assign Values to Key Results
Now that you know the best measure for each key result, it’s time to input it into your OKR template.
Always consider that ideal OKRs should be bold but not easily achievable – nor impossible. For example, reaching 80% is a good indicator of a high-impact key result, while quickly achieving 100% shows that a key result lacked ambition.
- For each key result: input a starting value (column D)
- For each key result: add a target value (column E)
- For each key result: include a current value (column F)
Step 6: Assign an Owner or Responsible Party
Encouraging your team members to take ownership of responsibilities is not just about making sure things get done – it’s also about showing everyone that their work is valuable and contributes to advancing the company’s vision. When everyone feels involved, your company will achieve so much more!
- Assign an owner/responsible party per objective
- If multiple people contribute to an objective, assign an owner/responsible party per key result
Step 7: Set a Clear Deadline
A defined deadline allows teams to focus their efforts and resources. Make sure your deadline is well-communicated to all team members to drive motivation and accountability.
As mentioned earlier, we recommend quarterly cycles for your OKRs. While your quarterly OKR deadlines should be ambitious, it’s also important to keep them realistic – impossible deadlines can dampen morale.
Using an OKR Dashboard Template
Our template doesn’t include a specific scoring system, although there is a dedicated space to track your progress as a percentage of your overall key results goal. However, some teams choose to add a dashboard to their OKR template.
With OKR dashboards, you assign a numerical value to each key result, providing a clear visual indicator of progress. Typically, you rate each key result on a scale from 0 to 1 (1 meaning it’s fully completed), using predefined criteria. For example, if your key result is “recruit 20 new clients,” achieving 15 new clients may equal a score of 0.75.
Then, you calculate the average of all your key result scores to obtain an overall score for your objective.
Scoring OKRs can reduce ambiguity and give you clear indicators of how things are going.
The Best Way to Set Up and Track OKRs
You can track, align, and collaborate on goals and OKRs at all levels (company, department/team, and individual objectives) with the Leapsome platform.
Learn more about Leapsome’s Objectives module below.
Create Simple and AI-powered OKRs
With Leapsome’s AI-powered tools, you can build a comprehensive OKR framework tailored to your goals in just minutes. AI-generated suggestions help leaders set (and adjust) ambitious yet achievable individual, team, and company objectives.
Measure Goal Progress with Automated Dashboards
Our automated dashboards give everyone in your organization a clear overview of progress and make it easy to identify obstacles and understand what needs adjusting – or which goals and initiatives need an extra push.
Visualize Goals Across Your Organization
With Leapsome, it’s easy to see how goals relate to each other – and easy on the eyes! With our goal tree, you can see how team and individual goals support overall company goals, reinforcing alignment and purpose throughout the organization.
Make OKRs an Integral Part of Daily Work
The Leapsome platform goes even further by connecting different processes (like meetings, performance reviews, learning, and instant feedback) into a continuous cycle of personalized development that drives engagement and your company’s success. With Leapsome, you can seamlessly integrate OKRs into your daily routine, so you’re focused on what matters most every day.
Motivate All Stakeholders
Now that you know OKRs are essential for company alignment and employee engagement, empowering individuals to take ownership of initiatives isn’t just about ensuring things get done – it’s also about showing everyone that their work has a positive impact. When someone knows their work matters, they’re more likely to achieve exceptional results! And a crucial part of that is having accountability for key initiatives. With Leapsome, your team can easily track and measure the goals they’re involved in, have a clear overview of results, and stay motivated to achieve even more.
FAQ
How can an OKR template guide us in setting goals and key results?
At the beginning, OKRs can be confusing, and understanding how to define goals and key results can take time and practice. An OKR template can streamline the initial process by following specific guidelines and formulations.
Can an OKR template be customized for different teams or departments?
An OKR template gives you the guidance you need to set goals and key results for all your teams and departments. That’s why it can be used by anyone in your organization and will only require a few adjustments to fit different teams.
How often should OKRs be reviewed and updated?
OKRs can be part of your daily work. Of course, updating progress every day is optional, but an OKR software like Leapsome can help keep goals top of mind by integrating them into your meeting agendas and performance reviews. Updating and tracking goal progress is made easy – you just need to check your Leapsome dashboard.
Ready to unlock the power of OKRs? Get started with our free OKR template today and see the positive impact it can have on your organization’s goals and results.
