A framework for consistently creating high-quality goals

OKR focuses on outcomes, purpose and impact.

Since we’ve been conditioned for outputs (those projects and tasks that we complete), it requires quite a shift in mindset to master the art of creating high-quality, outcome-oriented goals. This involves identifying the right priorities (Objectives), measuring if you’re making progress toward these priorities (Key Results), and then determining what you’re going to do to achieve them (Initiatives). 

Makes sense, right? It often does, but then it feels intimidating when you go to apply this change in mindset to your team's and organization's efforts.

It can even feel more intimidating to come up with a good strategy.

Don’t worry, below you’ll find a list of powerful questions that will help you create impactful goals for your organization.

Before you start

• Your first impression may be that they seem quite simple and similar, but slight adjustments in how you ask a question can elicit different answers and help unlock important information. Feel free to pick and choose what you feel is best to make a template or ask in live coaching sessions. 
• Be aware that the answers to these questions will often trigger debate and discussion ⸺ that’s a good thing! These conversations are productive and ultimately help to identify the top priorities and align everyone on next steps. Because of this, make sure to budget enough time for these sessions. Trust me, it’s worth it because they determine how you will dedicate an entire quarter (or even year) of resources.‍

Company strategy

We live in a world with limited resources and the constant threat of competition, so strategy becomes critical and (tough) choices will have to be made. But before those choices can be made, you first need to decide which battle(s) you want to fight and what winning looks like. This brings you to your company’s Ultimate Goal. 

Use the following questions to help determine the Ultimate Goal:

• Why does your company exist?
• What problem is your company solving?
• For whom is your company solving that problem? (e.g. what customer segment)
• What does ultimate success look like for your company?

Often the Ultimate Goal is a combination of your mission and vision. 

You can find examples of an Ultimate Goal here.

Strategic Pillars

Now that you know which battle you want to fight and what winning looks like, you need to determine how you are going to fight. This brings you to your company’s Strategic Pillars. 

Use the following questions to help create 3-5 Strategic Pillars:

• What makes your company better than the competition?
• Why do customers choose your company over the competition?
• What gives your company a competitive advantage?
• How does your company differentiate itself from competitors?
• Where does your company have an edge?

You can find example Strategic Pillars here. 

Since your Strategic Pillars are a set of choices, they are not time bound, so their performance is measured by KPIs. For each Strategic Pillar, identify the high-level KPIs that communicate to you if you’re indeed fulfilling these choices. A few would suffice, so just determine those top metrics that are the most important. 

Company OKRs

To provide enough direction for what the rest of the organization needs to focus on, typically the top leadership creates annual Company OKRs. 

OKR is about change, so you’re either building, improving or innovating. Top leadership needs to identify what change the company needs to achieve in the next year. It’s important to strike the balance where the Company OKRs are broad enough that they are relevant to most of the organization, but narrow enough so that the execution possibilities are not unlimited. 

Use the following questions to help create Objectives:

• What does the company need to focus on this year?
• What problems do the company need to solve this year?
• Where do we need to be as a company by the end of the year?
• What’s the most important priorities for the company this year?  

Reminder: An Objective is short, memorable, directional and communicates purpose. This is the opportunity to express why this goal is important. It should not contain a metric. 

Use the following questions to help create Key Results:

• Why is this focus important for the company?
• How do you know the company needs to focus on this?
• Where will the company see the benefit if you achieve this goal?
• How do you know this is a problem the company needs to solve?
• How will you know if the company solved this problem?
• What will prove to the board that you’ve solved this problem?
• What will prove to the board that you achieved this goal?
• What will prove to the board that you were successful?

Reminder: Key Results are measurable, something you achieve (vs. complete), within your circle of influence (vs. in your control) and measure business impact. 

Since Company OKRs are strategic in nature, they typically do not have Initiatives. Instead, Initiatives will be associated with the executional quarterly OKRs, so now let’s discuss the bottom-up goals that are owned by the teams.

Team OKRs

As a team, you often start with what you’re going to do first, but that brings you to the Initiatives, the most narrow part of the OKR structure. Instead we want to shift our mindset and start with the outcome so that you identify the Objective first. From there you’ll move to identify the Key Results and only last, what you are going to do, your Initiatives. By shifting your approach, you broaden your perspective and don’t limit yourself.

Inspiration can come from the team KPIs, Company OKRs and last quarter’s Team OKRs. When working with something new, it’s natural to defer to what’s familiar, what you’re already doing, and represent that work as OKRs. If you’re an executing existing process, then it’s likely your business as usual and best to represent it as a KPI* instead. Only if a KPI is unhealthy or needs to be supercharged (has a very ambitious target that wouldn’t be possible to achieve by executing existing processes), would it be appropriate to also add it as an OKR.

‍Teams don’t have KPIs yet? KPIs (Key Performance Indicators) are those key metrics that communicate business-as-usual operations are healthy. They provide feedback on the performance of existing processes to ensure you can continue to keep the lights on. Here are some questions that you can use with team leads to help them create their KPIs. 

• Is your team operating successfully?
  • If yes, how do you know?
  • If not, how do you know?
  • If yes and no, what communicates this to you?
• If you were to create a custom dashboard to communicate that your team is operating smoothly, what metrics would you need to see? 

Here are some questions that you can use with teams to help them create their OKRs. Feel free to pick and choose what you feel is best to make a template for them. 

Use the following questions to help create Objectives:

• Is there a KPI that’s unhealthy or broken that we need to fix?
• Do we have a very ambitious KPI target that we won’t be able to achieve with existing processes?
• What is the biggest problem we need to solve this quarter?
• What do we need to achieve this quarter?
  • Why is this important?
  • Why is it urgent?
• How can we help push one of the company OKRs forward? 
• How can we make the biggest impact this quarter on one of the company OKRs?
• What do we need to focus on this quarter?
• Did we achieve last quarter’s OKRs?
  • If not, do we still need to focus on it?

Reminder: An Objective is short, memorable, directional and communicates purpose. This is the opportunity to express why this goal is important. It should not contain a metric.

Pro tip: If it’s an Objective where you’re building something (e.g. launching a new website), make sure there are qualifiers that communicate success: Launch a higher-converting website that attracts more quality leads.

Use the following questions to help create Key Results:

• How do we know that this is something we need to focus on?
• How do we know that this is a problem?
• How will we know that we've solved this problem?
• Where will we see the benefit or impact once we achieve our goal?

Reminder: Key Results are measurable, something you achieve (vs. complete), within your circle of influence (vs. in your control) and measure business impact. 

Special situations:

• Lagged Key Results: Sometimes you won’t see the impact until after the quarter is over. In this case, you want to still have this Key Result, but also add other “leading” Key Results that are able to communicate progress during the quarter and validate that you’re on the right track.
• Key Milestones: If you’re in the build phase it can be tricky to find outcome-oriented Key Results. If you won’t be able to measure the benefit in the foreseeable future then you can assess the quality of your deliverable (eg. beta testing, error testing, approvals, etc). You can also get creative too depending on the deliverable and how you can confirm it’s passed the right standards. 

Use the following questions to help create Initiatives:

• How are we going to solve this problem?
• What are we going to do to solve this problem?
• What are we going to do to achieve our goal?

Brainstorm an exhaustive list of options and then prioritize based on effort and impact. Start with the highest potential impact and lowest required effort first. 

Reminder: Initiatives are outputs, something that you complete and are in your control. They’re hypotheses of what you believe will drive progress on the Key Results so this is where you’ll be agile. As you complete Initiatives, you’ll learn what’s working and what isn’t, so you can abandon, adjust and pursue different Initiatives. 

Once each team has created their OKRs, check to see if there are any dependencies or overlap. If there are dependencies, it’s important for those team leads to meet to discuss resource allocation. If there is overlap where multiple teams have the same Objective “why”, consider making a shared OKR ⸺ no need to have 3 OKRs when you can have 1. 

[fs-toc-omit]That's it!

Congrats, now you’ve successfully created your first cycle of OKRs. Don’t worry if the OKRs don’t completely align with best practices. Sometimes it’s because a team is resistant to change or it's a tricky goal to quantify. It’s an evolution and progress is always better than perfection. What matters is that you’ve identified the right priorities, created focus and started to open people’s minds to thinking about outcomes first instead of outputs.