A guide to using OKRs in project management
Last updated on: September 6, 2022
More and more work is being done in projects, but project management alone doesn’t cover everything needed for business success.
One of the best ways to improve your chances for success is by using OKRs (Objectives and Key Results) to complement your project management efforts.
Developed in the 1970s by Andy Grove — who was CEO of Intel at the time — OKR is a goal-setting framework that’s designed to keep teams motivated and aware of their big-picture objectives.
Since then, OKRs have famously been used by some of the biggest companies in the world, like Google, Facebook, Twitter, Microsoft, and Amazon.
In this article, we’ll teach you all you need to know about OKRs so that you, too, can shoot for the stars with your projects.
To do this, we’ll need to:
- Define what OKRs are,
- Show what they should look like,
- Describe the benefits of using them,
- Explain why you should use them in project management,
- Define how OKRs are different than KPIs,
- Explain how to set up OKRs for project teams, and
- Provide some OKR examples for project management to kickstart the creative juices.
What are OKRs?
As stated, OKR stands for Objectives and Key Results.
Objectives, in this context, are qualitative goals that cannot be directly measured.
For example, “We will make our company more eco-friendly.”
That’s a qualitative goal that will inform your decisions.
Now, how do you measure whether or not you’re on track to meet this objective?
That’s where key results come in.
Key results are quantitative (can be measured) indicators that show you whether or not you’re on track to meet the objectives.
For example, “We will reduce the amount of paper we use by 70%,” or “We will reduce the number of car commuters in the company by 50%.” This way, we’ll be able to meet our objective — to make our company more eco-friendly.
For every Objective, it’s good to have several Key Results used to track progress.
In addition to Objectives and Key Results, there is another element of OKRs that, sadly, didn’t manage to squeeze into the acronym — Initiatives.
Initiatives are the tasks you plan to perform to meet your objectives.
For example, to reduce the amount of paper the company uses by 70%, you plan to:
- Switch to e-bills instead of paper bills, and
- Use digital documents like Google Docs and Google Sheets.
Or, if you want to reduce the number of car commuters in the company by 50%, you can:
- Promote working from home,
- Implement a cycle-to-work scheme, and
- Offer public transportation reimbursement.
What should OKRs be like?
When creating goals for your OKRs, you should make sure that they are:
- Ambitious, and
OKRs are usually performed quarterly, but this isn’t a hard rule — if you find that a different time period works for your company or your project team, go for it.
Regardless of what time period you settle on, you will have to track your progress throughout it and then evaluate your success at the end.
This requirement for good OKRs generally isn’t an issue in project management, since projects also are time-limited.
Ambitious goals help inspire the project team — however, goals should also be achievable. Riding this fine line between ambitious and achievable goals is not easy.
One tip we can give you is to not fear failure.
You won’t always meet all your objectives.
This framework accounts for that. When you fail, you can analyze why this happened and learn from it. Perhaps the OKR just wasn’t achievable. Next time, you can adjust it.
Conversely, if you don’t make your objectives ambitious, you may well have a 100% success rate — but this won’t inspire the project team and it won’t lead to the kind of business growth that OKRs are known for.
The benefits of using OKRs
OKRs carry with them a lot of benefits, regardless of whether you use them for project management or not.
So, before we look at how they mesh with project management, let’s take a look at some of these independent benefits:
- Goal-focused productivity,
- Increased accountability,
- Effective goal-setting,
- Increased employee engagement,
- Aligning employee efforts with the company/project vision, and
- Tracking progress.
Why use OKRs in project management?
Now that we know what OKRs are and why they’re great in general, let’s see why you should use them in project management specifically.
The answer is simple — projects are output focused (your goal is to create a deliverable), whereas OKRs are outcome focused (your goal is to generate value).
Output can be directly influenced — it is the fruit of your labor, so to speak.
Let’s say you make one 10-minute YouTube video every week — that’s your output. You can scale that output and make two such videos a week. You can hire more staff to ramp up output to the point where you’re releasing a new 10-minute video every day — the output is in your control.
Outcome, on the other hand, is not in your direct control. You can influence it, but only indirectly.
What is the purpose of these YouTube videos? Probably to advertise your product — this is your outcome.
Will simply hiring more staff and churning out more videos result in better sales? Who’s to say?
Now, project management is great for optimizing your output, regardless of what you’re doing:
- Are you constructing a house? The Waterfall model will see you through it.
- Looking to increase efficiency and cut costs in your production line? Try Lean.
- Need to manage software development workflow? One of the many Agile frameworks like Kanban, Scrum, or Scrumban is sure to get the job done.
However, the goal of project management is output, so implementing OKRs to not lose sight of outcomes is advisable.
What’s the difference between OKRs and KPIs
OKRs often get confused with KPIs (Key performance indicators) — a term that most project managers are familiar with.
However, the difference again boils down to outcome and output.
OKRs track outcomes in ways that we’ve already described.
KPIs track output in project management.
For example, one KPI that most Kanban teams use to track productivity is cycle time — i.e. the time needed to complete a task from the moment work on it starts. Shorter average cycle time in one time period as compared to the previous shows that the project team is being more productive — i.e. that their output is on the rise.
While the focus of this text is primarily on OKRs, we want to emphasize that their benefits don’t come at the expense of KPIs and project management in general — it’s not like one is better than the other.
The benefits of using formal project management procedures — tracking KPIs included — for managing projects can be seen through the following statistics:
- Completing more projects on time (by 16%),
- Completing more projects within budget (by 15%), and
- Completing more projects that meet their goals (by 15%).
This isn’t something that should be passed up.
Rather, the best project teams will use both OKRs and KPIs to track both outcomes and output.
Setting up OKRs for a project team
So, how do project teams use OKRs?
It’s very simple — the first and most important task is to paint the big picture to the project team.
During the day-to-day, it’s easy to fall into the rut of doing tasks for their own sake.
OKRs will make the project team members more engaged while reminding them of the actual value their work is supposed to bring.
When defining your OKRs, it’s best to follow this formula:
We will [Objective] as measured by [Key Result]
So, the first thing to look out for is to make OKRs transparent.
The goal is to get the project team to focus on more than merely their output. If they can’t see the big picture because you’ve failed to make it transparent, this won’t work.
The OKR should also be simple and easy to understand.
Let’s say you’re using project management for game development.
The project is to make the game. This is your output, and it doesn’t necessarily correlate to how well the game will perform. Assuming no shortage of funds, you can keep improving upon it indefinitely.
However, your objective for this project could be to increase your reputation as an indie developer that the gaming community loves. To do this, you would need to generate a large interest in your upcoming game and then deliver on the promised quality.
How to format OKRs: game developer example
Now, let’s see how we would format this OKR.
Objective: Cement your reputation as a respected indie developer.
Key result 1: Get 100,000 people to wishlist the game before release.
Key result 2: Get 500,000 views on the trailer.
Key result 3: Get 1,000 Steam reviews while keeping the overall score Very Positive.
Key result 4: Sell 150,000 copies within the first month of release.
As you can see, the key results are very much measurable, and very much outside of your direct influence.
As for the initiatives, they include tasks that are already part of your project, so the project management side of things will take care of that.
Once you’ve made your OKRs, all that’s left is to track them regularly.
Having weekly OKR check-ins — i.e. short meetings to review the progress of OKRs — could be a good starting point. But again, it’s best to find a format that fits your team.
At the end of the OKR time period, you should see whether or not you’ve met the objective by measuring key results.
How to measure key results: game developer example
There are several ways to measure the success of your OKRs, but the two most prominent ones are:
- Binary approach, and
- Decimal approach.
The binary approach is as simple as it sounds — you’ve either met a key result, or you didn’t.
Did you get at least 1,000 Steam reviews while keeping the score Very Positive?
If yes, you’ve succeeded in this key result. If not, you’ve failed.
The decimal approach allows for more nuance — by adding some gray area between the success (0.6–1.0) and failure (0.0–0.3) outcomes. Namely, by adding the significant progress outcome (0.4–0.5).
This way, you can calculate the mean success of your OKR on a scale from 0 to 1.
If you’re using the decimal approach, though, you should put extra effort to ensure that all your key results hold equal weight.
For example, falling short of the 100,000 wishlist key result before release won’t matter as much if you still sell 150,000 copies in the first month.
If you’re using a project management tool like Plaky, you can store all your OKRs in a transparent place for the whole team to see and keep track of progress as you’re developing your project.
OKR examples for project management
With that, you now know all that you need to know about using OKRs in project management.
But before we say goodbye, we want to leave you with some additional examples of what these OKRs can look like.
OKR in project management: Example 1
OKRs are a great way to increase team performance by placing ambitious and motivational goals.
Objective: Position our product as having the best customer support.
Key result 1: Increase our average CSAT (Customer Satisfaction Score) to at least 4.5.
Key result 2: Speed up average FRT (first response time) to less than 10 minutes.
Key result 3: Hire 5 more employees for customer support.
Key result 4: Increase our resolution rate to 99%.
OKR in project management: Example 2
OKRs can be used to create a strategy for getting a failing or underperforming project back on track. In this example, we can see what aspirations game developers can work toward to win back their dwindling player base.
Objective: Improve the release quality of patches for our live service game.
Key result 1: Get 80% fewer bug reports.
Key result 2: Get 30% higher player satisfaction.
Key result 3: Have 90% less downtime for unexpected maintenance.
Key result 4: Increase player retention by 20%.
Key result 5: Increase average player spending by 15%.
OKR in project management: Example 3
Sometimes, your objective could be the output — in other words, just make sure the project gets delivered as originally agreed upon. In this case, your OKR may look something like this.
Objective: Increase company reputation by completing the project exactly according to the scope.
Key result 1: Have no more than 5% budget variance.
Key result 2: Implement 100% of promised features.
Key result 3: Complete the final deliverable before the project deadline (August 15th).
Key result 4: Experience no more than 5% scope creep.
OKR in project management: Example 4
For something a bit more elaborate, you can check out the Mozilla Foundation 2021 OKRs, which include the following:
Objective: Accelerate the impact of people working to mitigate bias in AI.
Key result 1: Increase the total investment in existing AI + bias grantees by 50%.
Key result 2: 50,000 people participate in projects on mitigating bias in AI as a result of Mozilla promotion.
Key result 3: Pipeline of additional projects Mozilla can support to mitigate bias in AI established.
OKR in project management: Example 5
OKRs are a good way to measure growth by treating the key results as milestones. In this case, if the objective is to raise brand awareness, key results can help you gauge how well that’s going.
Objective: Use social media to increase brand awareness.
Key result 1: Reach 100,000 YouTube subscribers.
Key result 2: Reach 150,000 Twitter followers.
Key result 3: Reach 80,000 Facebook followers.
Conclusion: OKRs and project management complement each other perfectly
Project management and OKRs go together like cookies and milk.
You can have them separately and still enjoy them — but, why would you when, combined, the result is greater than the sum of its parts?
By using both project management and OKRs, you can work on improving both output and outcomes.
The two form a symbiotic relationship where well-defined OKRs help elevate project management to greater heights — and project management helps OKR initiatives succeed.
✉️ Has this guide helped you integrate OKRs into your project management practices? Have you used OKRs before? Let us know at firstname.lastname@example.org, and we may include your answers in this or future posts. If you liked this blog post and found it useful, share it with someone you think would also benefit from it.