What Are OKR Metrics?

Staying focused and aligned is vital for success in any organization. That's where objectives and key results (OKRs) come into play. Although OKRs have been around since the 1970s, they're gaining traction across organizations, from startups to large corporations. 

OKRs provide a structured yet flexible approach to goal-setting, helping organizations effectively align their efforts and measure progress. OKRs include the objectives you aim to achieve and the key results indicating progress toward those goals.

Metrics are at the heart of the OKR system, helping you measure whether you're on track to hit your goals. In this blog post, we'll discuss what OKR metrics are, why they're essential, and how you can set them effectively to drive success in your organization.

What are OKR metrics exactly?

Objectives are your big, bold goals—think of them as your destination. Following Google's approach, objectives can be both committed and aspirational. Committed objectives are tied to specific metrics and are realistic but challenging, while aspirational objectives are more ambitious and riskier. They are the future-looking, audacious goals that inspire innovation. 

In his influential book on OKRs, "Measure What Matters," John Doerr notes that at Google, aspirational objectives typically have a 40% failure rate, while employees should meet committed objectives at 100% by the end of the cycle.

Some companies find it effective to limit their objectives to around five per quarter. Pair each objective with 3-5 measurable, time-bound, and unambiguous key results. These are your roadmap to reaching your goal. Only once you've met each key result is your objective achieved. Be careful not to focus only on quantitative metrics and disregard qualitative aspects that support great customer-focused products and services, such as quality, safety, and reputation. 

Example of OKR metrics

If your objective is to "boost online sales by 20% this upcoming quarter," your key results might be:

1. Increase website conversion rate by 15% by the end of the quarter.
2. Hit a monthly sales target of $100,000 each month this quarter.
3. Cut the cart abandonment rate by 25% by the end of the quarter.
4. Achieve a customer satisfaction score of 85% on post-purchase surveys by the end of the quarter.

How to track OKR metrics

Transparency and continuous tracking of OKR metrics are as crucial as defining the right OKRs. Commonly, leadership will set company-level OKRs and hold everyone, including themselves, accountable for achieving those objectives. 

These OKRs should be disseminated to the entire organization, preferably in a town hall meeting, allowing departments and teams to align their own OKRs with the larger goals. However, not all OKRs should come from the top. To keep individual contributors motivated and engaged, about half of the OKRs can be set bottom-up by those closest to the work who may have valuable new ideas to implement.

OKR tracking and management software make OKRs visible to the entire organization, and there are many options to choose from. To write key results that everyone readily understands, avoid jargon only familiar to your team or department. Make your metrics easily measurable and provable. 

OKRs aren't a "set it and forget it" system. Many find that regular check-ins, either weekly or bi-weekly, with managers and monthly departmental meetings to review OKRs, can help keep teams on track. If an objective needs adjustment, consider keeping everyone affected aware of the change. In the event that your team didn't reach the objective in the allotted time, it can be moved to the next cycle, as long as it's still relevant to your company's overall direction. Aspirational goals often take more than a quarter to reach; just make sure you're progressing towards them. 

Check out our post comparing KPIs and OKRs to understand the purpose of each performance tracking system.

Why are OKR metrics important?

OKR metrics are important for several reasons:

1. Measuring progress. Metrics provide a clear way to measure progress. Without metrics, it's easy to lose sight of whether you're moving forward or just spinning your wheels.
2. Aligning team efforts. OKR metrics align team efforts with strategic goals. When everyone knows the objective and what metrics it takes to reach it, it's easier to ensure all actions contribute to the bigger picture.
3. Continuous improvement. Regularly reviewing your OKR metrics highlights areas of excellence and those needing attention, allowing timely adjustments. 

How to set effective OKR metrics

Setting effective OKR metrics involves a few key steps. Here's a recap to help you get it right:

Define clear objectives

Start with a clear, inspiring objective. Consider denoting whether it's a committed or an aspirational goal. For example, an aspirational objective in developing a new smartwatch could be: "Develop a market-leading smartwatch." 

Identify key results

Determine the specific outcomes that indicate you've made progress toward or achieved your objective. For our smartwatch example, key results might include:

1. Release three innovative health monitoring features by Q3.
2. Secure partnerships with five major fitness influencers to endorse the new features.
3. Achieve a product adoption rate of 30% among existing smartwatch users within six months.

Set three to five key results for each objective, ensuring they deliver tangible value to the organization rather than just generating activity.

Make metrics SMART

Ensure your metrics are SMART:

• Specific. "Develop three new health monitoring features."
• Measurable. "Achieve a 30% product adoption rate."
• Achievable. Set realistic metrics based on available resources and time.
• Relevant. Align metrics with broader organizational goals.
• Time-bound. Set a deadline, like "Release features by Q3."

Use quantifiable data

Whenever possible, use numbers to define your metrics. Quantifiable data provides clarity and a concrete way to measure success. For instance, set a key result like "Achieve a customer engagement score of 85% for new health monitoring features within three months of release." However, pair your quantitative metrics with qualitative ones for quality control. For example, ensure you respect customer privacy by measuring the percentage of customers who consent to data sharing and monitoring the number of privacy-related complaints received.

Review and adjust regularly

OKR metrics aren't set in stone. Review your progress regularly and adjust as necessary. This approach lets you adapt to new information or unexpected changes. Adjust the target or extend the timeline if hitting a 30% adoption rate is too tough due to unforeseen challenges.

Learn how to craft agile OKRs

OKR metrics are the backbone of the OKR approach, providing essential tools to measure progress and success. They ensure alignment across the organization, foster performance measurement, and drive continuous improvement.

If you want to master OKRs, register for Agile OKRs, a microcredential course from Scrum Alliance. This course will equip you with the skills to implement OKRs effectively, especially in an agile environment. Set those ambitious goals and let your well-defined metrics guide you to achieve them, steering your organization toward success with confidence and clarity.

Discover Agile OKRs