Two important considerations when planning Objectives and Key Results, or OKRs, are:
- What timeframe will each OKR cover? In other words, should an OKR be accomplished in one month? A quarter? A year?
- How frequently should we set and re-evaluate OKRs? Monthly? Quarterly? Yearly?
First, let me be clear, there are no hard rules. So experiment and adopt whatever works best for your business.
However, what I outline on this page is what I have found to work best. That is, I’m not going to talk about theory, but what I’ve seen work best in real businesses from as small as two people to a few hundred million dollars in revenue.
OKR Timeframe
Let’s back up a click and talk about strategic planning.
Here at Pivot Habit, I coach my clients to:
- Forge a 10-year vision.
- Look ahead 3 years.
- Build a clear 1-year plan.
- Calibrate quarterly.
- "Plan to Pivot" monthly, making small course corrections to maintain strong control over performance.
With that in mind, my guidance on OKRs is:
- Only plan out OKRs for the current one (1) year period. Put differently, all OKRs should be do-able within your current 1-year planning period.
- Each individual OKR is best sized when it can be completed within one (1) quarter… two (2) quarters at the absolute max. But one is better.
- At the company-wide level, or within any department, limit to a max of 3-5 OKRs in any given quarter. This keeps the overall number of active OKRs at any one time more manageable.
- Make sure any one person owns no more than three Objectives or six Key Results in any given quarter.
More than likely when you implement these “rules” it’s going to feel like you’re pushing a good number of Objectives out farther than you like. That’s okay. Remember: We will review and adjust on a monthly and quarterly basis. We can always adjust and introduce different objectives as needed.
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OKR Cadence
As to how frequently to review and set and review OKRs, there are three answers here.
- OKRs are usually first established during the Annual Strategic Planning cycle. This usually takes place for most companies during their 4th fiscal quarter. The goal is to translate strategy into OKRs.
- OKRs for each quarter are reviewed at the end of that quarter. Progress is checked. OKRs that are complete are celebrated. OKRs that aren’t complete are re-evaluated to decide if work should continue, the approach should be changed, or the effort abandoned. In this way, the strategic planning cycle migrates from being annual to being somewhat continuous.
- Agile organizations don’t wait for quarterly checkpoints. As OKRs complete, they cross them off and introduce new OKRs into the mix. This is the best, most agile, and progressive approach.
Bringing it Together
Objectives and Key Results are an incredibly powerful tool that big companies have been using for years. Small-to-medium companies can harness the power and reap the rewards by implementing as little as a handful of OKRs. There is a natural cadence to OKRs, and it’s relatively easy to implement. Hopefully, this article has helped. If you have more questions, please reach out.