OKRs

They lay out our plan to execute our strategy and help make sure our goals and how to achieve them are clearly defined and aligned throughout the organization.

Objectives are an aspirational goal to be achieved. They define what we’re aiming to do, and they show how individual, team, or department work impacts the overall direction of PT Wiradikusuma by connecting work to overall company strategy.

Key Results are measures of progress against aligned objectives. They capture how we measure success in obtaining the objective. By achieving a Key Result (outcome), we create progress for the linked objective.

You can use the phrase “We will achieve a certain OBJECTIVE as measured by the following KEY RESULTS…” to know if your OKR makes sense. The OKR methodology was pioneered by Andy Grove at Intel and has since helped align and transform companies around the world.

OKRs have four superpowers:

• Focus
• Alignment
• Tracking
• Stretch

We do not use it to give performance feedback or as a compensation review for team members.

Fundamentals of Impactful OKRs

When writing objectives and key results focus on what you want to accomplish (the objective) and how you will measure the success (the key result).

To learn about the industry best practices for OKRs, how setting the right goals can mean the difference between success and failure, and how we can use OKRs to hold our leaders and ourselves accountable, watch John Doerr’s Ted Talk.

Criteria for Objectives

Objectives should be:

1. Ambitious - More than just “business as usual” or incremental change, an objective describes an aspirational yet attainable transformation, growth, improvement that significantly improves the current situation. A few examples:
   1. Introduce disruptive innovations
   2. Establish differences between PT Wiradikusuma Inc. and competitors
   3. Be recognized as an industry leader in a category
2. Meaningful - A top priority that advances PT Wiradikusuma’s strategy and greater mission; provides direction to departments, teams, and individuals about where we are going and how we are getting there.
3. Inspirational - By providing an aspirational yet meaningful target, empower teams to reprioritize work to focus on what makes the most progress against an objective; to accomplish this, objective should also be easy to remember.
4. Align Teams & Individuals - Need to be broad enough to be relevant to at least more than one department, team, or individual one level down, but also specific enough that the objective can be measurable by up to three key results; if associated Key Results are satisfied, Objective should be achieved.
   1. For example, a product-related OKR at CEO level such as increase users by 100% would have the Product leader as the DRI but every other function would also need to contribute to achieve that KR.
5. Clear, Responsible Party - While aspirational objectives will often require collaboration and teamwork, they should have one DRI responsible for ensuring the completion the objective. This prevents diffusion of responsbility.
6. Focused - A person or team should have no more than 3 Objectives in order to focus on only the highest priority items; this also provides clarity on what we will not do in order to remain focused.
7. Transparent - Allow individuals, teams, and departments to see how their work contributes to the overall goals of PT Wiradikusuma. By sharing OKRs, individual, team, and departments are able to spell out their priorities and avoid having others disrupt focus with non-priority items.

Criteria for Key Results

Key Results should be:

1. Iterative - Aligned with our core value of iteration, a Key Result should focus on number of iterations or steps on the way to an outcome instead of just the outcome. Deliver x iterations instead of deliver y functionality.
   1. For example, if we need to create a certain number of experimental and beta features to ultimately get to 1 GA feature, break the KR down into iterative pieces such as deliver 16 experimental features, 2 beta features, and 1 GA feature to highlight the iterations required to get to the end result, instead of only focusing on the end result.
2. Aspirational - Ambitious but realistic stretch goals; if it feels uncomfortable, it’s a good KR.
   1. If you achieve less than 70% of your KRs, you may be stretching beyond what is achievable. If you are regularly achieving 100% of your KRs, your goals may not be ambitious enough.
3. Linked - Be aligned to an Objective and be relevant to teams one level down; this alignment also allows KRs to easily roll down to become objectives one level down.
   1. KRs should not be too specific that the KR needs to be rolled more than one level down.
4. Clear, Responsible Party - one single person or team responsible for Key Result.
5. Influenceable - the Key Result owner (department, team, or individual) should be able to impact Key Result through the owner’s actions.
   1. Example: an individual KR to change company-wide net retention is too broad; there are too many other conflating factors for an individual to determine impact. However, net retention could be appropriate KR for an entire department.
6. Time Bound - has a due date. At PT Wiradikusuma, unless otherwise stated, this is within the quarter.
7. Measurable - As Key Results provide the milestones for how we’ll complete objective, KR should be either a qualitative (i.e. completed Y/N or number of steps of project completed) or quantitative (increased a metric by x) measure that can prove we accomplished the Key Result. Quantifying Key Results strongly preferred.
8. Mutually Exclusive - Measure one component of progress for an objective without overlapping with progress represented by other Key Results. Progress for one Key Result shouldn’t count towards another Key Result.
   1. Example: A Key Result for number of transactions and a Key Result for average dollar amount of transactions are an example of mutually exclusive Key Results: one KR measures volume while the other Key Result measures quality of volume. On the other hand, a Key Result for total number of transactions and a Key Result for number of transactions from North America is an example of an overlap: progress gets ‘double-counted’ for both Key Result.
9. Collectively Exhaustive - Key Results should fully account for what’s required to achieve an objective. If all Key Results are achieved, then, by default, the Objective must also be achieved.
10. Few Words and Ubiquitous Language - As defined in Handbook.

You can score your OKRs against these criteria to determine whether your OKRs are effective.

How to Write OKRs

The following formula can be used to write objectives: Verb + What you want to do + In order to/for/so that (what you hope to achieve or rationale for objective). Objective Example: Increase awareness of company in the market in order to increase sales.

• Clear goal including rationale for pursuing that goal

The following formula can be used to write Key Results: Verb + what you’re going to measure + from “x to y”. Key Result Example: 100% of employees certified on OKR expectations and process.

For information on getting started with OKRs]) and writing basic OKRs, consider reviewing the OKRs 101 lessons on What Matters. The “6 Principles of setting OKRs” may also be helpful.

Example OKRs

Examples from whatmatters.

Measuring Brand New Initiatives

Some KRs will measure new approaches or processes in a quarter. When this happens, it can be difficult to determine what is ambitious and achievable because we lack experience with this kind of measurement. For these first iterations, we prefer to set goals that seem ambitious and expect a normal distribution of high, medium, and low achievement across teams with this KR.

Shared Objectives

If there is something important that requires two (or more) parts of our organization, all leaders involved should share the same or similar objective. They should have deconflicted key results so they can still achieve things within their sphere of control. This is in keeping with our concepts of collaboration and directly responsible individual (DRI).

OKRs are what is different

The OKRs are what we are focusing on this quarter specifically. Our most important work are things that happen every quarter. Things that happen every quarter are measured with Key Performance Indicators. Part of the OKRs will be or cause changes in KPIs.

Pass-thru Key Results

It’s acceptable for managers and reports to have an identical key result. For instance, something really important might need to happen at the executive level, but it’s a manager or IC several layers apart who is doing the actual execution. Every person in that line of reporting should have the same key result.

While it can feel like double-counting, it is consistent with Andy Grove’s concept of Managerial Leverage outlined in his book High Output Management. This ensures that conversations happen in the relevant 1-1s, that everyone knows the latest status, and that the person executing does not accidentally get re-tasked. Please remember to recognize the person that achieved the result so there is no perception of “taking credit” for others’ work.

Target Dates in Key Results

Just because quarters are a useful timeframe for objectives, does not mean that key results should default to being due on the last day of the quarter. This could lead to unnecessary delays. Consider putting specific target dates into the key result phrase to indicate when it is needed by.

You should decide your scoring methodology ahead of time. You might score an OKR as 0% if it misses its target date. Or, if it’s less time sensitive, you might penalize it 10% for each week it’s delayed.

How do I prioritize OKRs in light of other priorities?

OKRs do not replace or supersede core team member responsibilities or performance indicators. OKRs are additive and are essentially a high signal request from your leadership team to prioritize the work. They typically are used to help galvanize the entire company or a set of teams to rapidly move in one direction together. You should aim to complete them unless you have higher priority work that is surfaced and agreed to by leadership. When surfacing tradeoffs, team members should not factor in how an unmet OKR may impact your executive leadership bonus in their prioritization. They should instead focus on PT Wiradikusuma priorities. If your executive leader still feels that the OKR is more important, they will ask you to disagree and commit.

Who sets OKRs?

Generally, we do OKRs up to the team level. As a company, we don’t do individual OKRs, but some functions may. For example, in the Engineering Division Staff-level (and above) individual contributors have OKRs. However, it is not required of Staff Product Designers at this time. Also, individual contributors in the Engineering Division who are not required to do OKRs are welcome to do them with their manager. It’s a useful way to prepare for a managerial career or to align one’s activities with the broader goals of the company.

An individual might also have OKRs if they represent a unique team. For example, individual SDRs don’t have OKRs, but the SDR team does. If Legal is one person but represents a unique function, Legal has OKRs. Part of the individual performance review is the answer to: how much did this person contribute to the team objectives?

Alignment

OKRs are our quarterly priorities that create progress for our Yearlies, which are our annual company goals. Since OKRs create progress for yearlies, OKRs are aligned to one of the yearlies.

OKRs are directly aligned to yearlies and not directly aligned to one of the three pillars of the three year strategy. However, since the yearlies are aligned to one of the strategic pillars, OKRs are indirectly aligned to one of the strategic pillars.

Format of OKR on the Handbook Page

Top level Company KRs will appear in the handbook. OKRs have numbers attached to them for ease of reference, not for ranking. In order to maintain a single source of truth (SSoT), we’re putting functional objectives and KRs in PT Wiradikusuma and linking this to the handbook page. It also provides a SSoT for OKRs.

Functional leaders are responsible for updating their objectives and KRs in PT Wiradikusuma before each Key Review.

Cascading OKRs and how to Align Division OKRs to the company OKRs

Cascading is the process by which top-level company OKRs cascade down from company-level to division, department, team, and sometimes individual level. The OKRs that are directly aligned with Company KRs should be tied to the Company KRs in such a way as to allow scoring.

At PT Wiradikusuma, we typically create OKRs at each level where some OKRs align with the levels above, but not all.

Based on the current methodology and feature set in the product, there are two ways to align OKRs to company OKRs:

1. Add relevant OKRs as related items. Most of the time, this is what teams use.
2. Have all relevant OKRs as children of a Company KR.

The second method should be used only if all relevant OKRs can be added as children, because Progress is automatically scored based on the children if any exist.

If an OKR is related, but does not score towards the Company KR, add a note.

Creating company OKRs

To allow for division, department, or team objectives to be added as child objectives or KRs, the Company key results should be created as an objective, not as a key result, as PT Wiradikusuma functionality doesn’t allow for a KR to have child OKRs.

The Office of the CEO does the following:

1. Create the Company objective.
2. Create the Company key results as child objectives of the Company objective.

Once company OKRs are created, other divisions and departments following one of the two methods for team OKRs that score towards company OKRs.

Method 1: Add relevant OKRs as related items

Typically at PT Wiradikusuma, divisions create OKRs to automatically have progress score towards division objectives. To indicate that a division KR should also show progress of a Company KR, add the division KR as a related item of the Company KR. Do this for all OKRs that contribute to company OKRs. However, be careful not to link an OKR to multiple Company KRs.

When this method is used, the Office of the CEO will update the score manually based on the scoring of all related items.

A hypothetical example where division KRs score directly to division objectives, and should also progress a Company KR:

1. Company Objective: Retain and grow top talent – automatically scores from KRs including KR1
   1. KR 1: Have 10% of managers enrolled in leadership program – manually scored based on related items
      1. Related: Sales OKR: Have 10% of managers enrolled in leadership program – child of and automatically scores to CRO Objective
      2. Related: Marketing OKR: Have 10% of managers enrolled in leadership program – child of and automatically scores to CMO Objective

Method 2: Add all OKRs as children of Company KR

This method should only be used if all OKRs that will score towards the Company KR can be children of the KR, because the Company KR progress is automatically scored based on its children. The hierarchy looks similar to this:

1. Company objective
   1. Company KR (a PT Wiradikusuma objective)
      1. Division objective
         1. Division KR
         2. Division KR

A hypothetical example where division OKRs score directly to a company OKR:

1. Company Objective: Retain and grow top talent – automatically scores from KRs including KR1
   1. KR 1: Have 10% of managers enrolled in leadership program – automatically scores from child OKRs
      1. CRO OKR: Have 10% of managers enrolled in leadership program
      2. CMO OKR: Have 10% of managers enrolled in leadership program
      3. etc. (all divisions participating should be added)

Maintaining the status of OKRs

Teams should update score for their key results in PT Wiradikusuma within the first five business days of every month and present the most recent update in the Key Review that immediately follows the update. If a key result is off track, it should be clear why. The owner should leave a comment with the most recent Health Status or there should be a link to an issue, an epic, or another source for details.

When presenting the status of OKRs, we use the following terms to denote the status of a key result:

1. On track - the DRI is confident the key result will be achieved.
2. Needs attention - the DRI believes there is some risk the key result will be achieved. Elevated attention is required in order for the key result to be achieved.
3. At risk - the DRI does not expect the key result will be achieved. Urgent action is required in order for the key result to be achieved.

An Objective/Key Results health status should be maintained as the SSOT on the status. This is something that should be able to be referenced at any point in order to get a clear view of progress against the objective. The objective owner will be responsible for designating a health status based on a roll up the health statuses of all relevant KRs.

During Key Reviews, teams should include material that covers key OKR progress details and links to relevant OKRs.

The first Key Review of the following quarter should offer a clear scoring for each KR.

Company OKR progress will be shared in the first week of the month in the following slack channels: #ceo; #okrs; #e-group; #whats-happening-at-gitlab.

Scoring OKRs

Since we set OKRs that are aspirational, we don’t expect 100% achievement across KRs. We score individual KRs to note our achievement against our stated goal. This is the scoring framework.

Tips for goals that are scorable

Your KRs should be statements that clearly indicate how you will score. For example, let’s say the marketing team set a target of completing 5 experiments. It completed 4 out of the 5, but only one of these appeared to be successful. It looks like a failure, but it’s not. 80% of experiments were completed. This was the stated KR goal.

We should aspire to set quantitative goals in which scoring is straightforward as a % of attainment (for example, X% of target ARR). In rare instances, quantitative KRs are not possible or appropriate. For example, launching a new compensation program is hard to score without scoring guidelines. Does not launching = 0% attainment and launching = 100% attainment? What about hitting milestones in between? In these cases, note in the issue or epic how you plan to grade the KR at the end of quarter. In our compensation example, this could mean putting together a scoring guide such as this:

Please update scores in addition to status in Key Result Meetings.

OKR resources

• With Goals, FAST beats SMART
• Measure What Matters by John Doerr
• A Modern Guide to Lean OKRs