We’ve been using our personal New Year’s resolutions at Qulture.Rocks to learn and teach basic concepts of how OKRs should work, and we’re not alone. We’re definitely not fans of using metaphors and analogies to talk about OKRs, since we think there’s a huge risk of not getting the right concepts through to people, but in this case, I think actually tying OKRs to themes closer to people’s day to day realities may actually have positive effects on their understanding of what OKRs are and aren’t.
So let’s get down to business. Let’s say it’s the start of the year, and I want to write my New Year’s resolutions: The first step is figuring out what the vision for that year is.
Step 1: Set the vision
The vision should describe, in the most visually descriptive form possible, how things will look like the perspective of your future self (let’s say in December 31st) looking back at you and your year. Ideally, you should be using present verbs, such as "have" and "am". For example:
- I am thinner
- I am healthier
- I have spent a lot more quality time with my friends and family
- I have $ 30k in savings for a rainy day
- I have traveled to two countries I’ve never been to
- I ran my first marathon
That’s an amazing list to start with.
Step 2: Cluster and prioritize
A great second step would be to cluster your vision statements around common themes. If we look at them, there seems to be the following four buckets:
Physical health:
- I am thinner
- I am healthier
- I ran my first marathon
Financial health:
- I have $ 30k in savings for a rainy day
Travelling:
- I have traveled to two countries I’ve never been to
Relationships:
- I have spent a lot more quality time with my friends and family
Clustering your statements into buckets allows you to have a better view of what you want to achieve. Now you need to prioritize. In order to prioritize, you should ask yourself the following questions, and most importantly, answer them honestly:
- Will I have bandwidth to fight on all these fronts? In this case, will I have energy, time, and stamina to lose weight, save money, travel and spend more time with those important to me?
- Are any of the buckets or statements at odds with other buckets or statements? Will I be able to both travel more and save money? Isn’t traveling going to detract from saving money?
- Are there any statements which are efforts towards other statements? In other words, are there parent/child relationships among them? Is running a marathon a goal in itself or just an effort towards losing weight?
The answer to these questions is very personal depends greatly on context. For example, I may conclude, after some reflection, that traveling to two new countries is at odds with saving $ 30k (a pretty straightforward conclusion), since I live in the Bay Area and have very little “fat to burn.” Knowing that my financial health is currently more important now that I’m planning to have my first child, I may decide to scratch the travel plans off of my vision.
I may also reflect about whether running a marathon is an effort towards losing weight or if it’s indeed a result in itself – an achievement. I may decide that running a marathon is a bit too much for me this year, and it was not a goal in itself: I was mostly thinking of it as a way to exercise more, so I take it off my vision.
Finally, I may reflect on the relationship between becoming healthier and becoming thinner. Becoming thinner may be a way towards becoming healthier (my weight might be negatively correlated with my cholesterol levels; my weight might be correlated to my belly fat, and belly fat raises my risk of getting Diabetes). Becoming thinner may also be an end in itself, because I think thinner = more beautiful and I want to feel prettier. Let’s say I decide to stick with becoming healthier, because that’s the real end goal.
After this step, my list has slightly changed:
Physical health:
- I am healthier
Financial health:
- I have $ 30k in savings for a rainy day
Relationships:
- I have spent a lot more quality time with my friends and family
Now as we start working on OKRs (bear in mind that for the sake of economy and clarity, we’ll drill down on only one OKR, the one related to my health):
Step 3: Draft your OKRs
As a refresher, an OKR in one Objective measured by n Key Results. A good way to structure your OKRs is to fill in the following mad lib:
”I will ______________ , and I will know if I was successful if I can _____________ , ______________ , ______________.”
The Objective is the goal you want to achieve. In the examples we’re working with, clustering the vision statements already pointed towards the goals: I am not trying to lose weight for its own sake, but in order to be healthier. You should dig deep and reflect on the “why” of your visions and goals.. In this case, I came to the conclusion that I am concerned with my health because I’m planning to become a parent, and I want to live long enough to raise my child. So I write the following Objective:
- Become healthier in order to be a present parent
Amazing. As you’ve probably noted, the Objective is closely tied to the “why,” and has no numbers or metrics in it. It’s purely qualitative.
Now we need to figure out which Key Results we’ll tie to this Objective.
Key Results are how you will measure if your Objective was attained. This is where many people get Key Results wrong, and that’s because the literature out there on OKRs doesn’t help. When Andy Grove thought of OKRs, he felt the Objective was more of a SMART goal, and Key Results were the efforts you’d chronologically take in order to meet the goal. John Doerr’s Measure What Matters kind of insists on this OKR worldview. We believe Key Results should not be steps, milestones or efforts, not “how you will achieve the goal,” but indeed “how you will measure if you have achieved the goal.” A subtle, but important difference.
So, working our examples, how will I measure if I was successful in becoming healthier in order to be a present parent?
The first step is to brainstorm KPIs, or Key Performance Indicators, that can serve as a proxy for health. If I’m overweight, it’s reasonable to believe that something related to my mass would be desirable. I need to think about if my weight is the best KPI for that. I may prefer to measure BMI, or Body Mass Index, which is a measure of the relationship between my weight and my height. Or I may just measure the weight of my body fat as a percentage of my total weight, the weight of my other tissues (bones, muscles, skin, etc.) and water.
A very important thing to consider is how easy to measure the indicator/KPI I chose is. Body weight is the easiest, because it can be measured with any over the counter scale. BMI is also easy, because it’s based on weight and height; and my height is a pretty knowledgeable constant. Body fat percentage, on the other hand, is an amazing KPI for this type of measurement, but very hard to obtain, since I’d probably have to buy a specialized scale (that isn’t even very precise) or visit a doctor or nutritionist to get more accurate readings. After considering the merits of all KPIs, I decide to stick with BMI, and so I’m able to write the first draft of my OKR:
Objective: Become healthier in order to be a present parent
Key Result: Drive my BMI (Body Mass Index) down to 19, from its current reading of 24
Amazing. This looks very much like a proper OKR.
Now we need to think if the Key Result we chose, BMI, stands on its own. The questions I need to ask myself are:
- Does this Key Result fully capture my achievement of the Objective?
- Is there a possibility we may drive down BMI successfully but harm our health in the process?
- Is there a chance we might hit our Key Result without achieving the Objective?
In our example above, it’s reasonable to believe the answer to these questions are “no,” “yes” and “yes.” Therefore, we need to do a bit more work on our Key Result.
By reflecting on these questions, I’ve concluded that the Key Result chosen doesn’t tackle an important aspect of my health: high levels of “bad” cholesterol. As you know, high levels of cholesterol (the bad type) might clog arteries that irrigate my heart, causing a stroke, which is the effect of the lack of blood flow to a certain part of this crucial organ. And I’ve recently had high readings of it as a results of blood tests, to which, among other things, my doctor suggested I should shed some weight. And the key here is that I may lose weight and hit my BMI Key Result by choosing a high-fat diet (something like Atkins), which could make it harder for me to lower my cholesterol levels. So I decide to balance my BMI Key Result with another related to cholesterol. Here’s how it looks:
Objective: Become healthier in order to be a present parent
Key Result 1: Drive my BMI (Body Mass Index) down to 19, from its current reading of 24
Key Result 2: Lower my “bad” cholesterol levels to 180 mg/ml
Now I think I’m happy with my “health” OKR. So I repeat this exercise, going from vision to OKRs, for the other aspects of my New Year’s resolutions.
But wait: where did those Key Results like “sign up at Equinox” and “Take up spinning classes twice a week” go to?
Step 4: Define action plans
As we’ve seen, Key Results are metrics that help us “prove” if we were successful in our Objective. In this case, I want to be healthy, and so I concluded my Body Mass Index and bad cholesterol levels were good KPIs on which to base my Key Results: we’re confident we’ll be healthier if we improve our BMI and bad cholesterol levels. So where do we fit steps like “sign up at Equinox” and “take up spinning classes twice a week”?
Here we come to a very important aspect of OKRs: they should be about results, and not about efforts. Going to the gym is an effort, and not a result. A result, in this case, must let us measure, as objectively as possible, if we’re healthier. Winning the game is a result. Working out, and practicing drills is an effort. Well executed efforts may lead to results, but they also may not, and since we want to “prove” if the Objective was met, they can’t serve as Key Results.
That’s where action plans and projects come in.
At the start of the year, a crucial aspect of meeting my New Year’s OKRs is to plan the efforts I will undertake in order to meet them. Planning is inherently risky: as with the Lean Startup method, my action plan may not generate the results I’m hoping for, and therefore may need to be tweaked. A good action plan is based on a hypothesis. In our case, for example, I may formulate two very straightforward hypotheses: if I a) exercise regularly and at the right intensity and b) eat a lower calorie but balanced diet, I will be able to hit my Key Results, and thus, my Objective.
So I formulate the following action plans that will, if my hypothesis is right, allow me to hit my OKRs:
Exercise:
- Take a cardiopulmonary capacity test to figure out my fat burn heart rate zone
- Buy an exercise heart rate monitor
- Enroll in Equinox
- Go to Equinox at least three times per week, and exercise at least 30 minutes at each visit at my target fat burn heart rate
Diet:
- Cut all intake of processed sweets such as cookies and Oreo at the office
- Eat, on a seven-day moving average, no more than 1500 calories per day
- Eat at least 50 grams of fiber every day (preferably greens, but can be the Walgreens type)
- Drink no more than 4 doses of alcohol per week
I know you may have thought these actions look very much like what you thought Key Results should look like. To wrap your head around this, you should think “is there a chance I execute all these actions on the plan and still not hit my Key Results? The answer is yes. You should also do an exercise, and substitute your original Key Results with these actions. Your OKR would – wrongly – look like:
Objective: Become healthier in order to be a present parent
Key Result 1: Cut all intake of processed sweets such as cookies and Oreo at the office
Key Result 2: Eat, on a seven-day moving average, no more than 1500 calories per day
And so on.
Is there a chance you hit all those “Key Results” but not your Objective? Yes again. And with OKRs, we’re interested in end results.
So now, we have our final “health” OKR and action plans:
Objective: Become healthier in order to be a present parent
Key Result 1: Drive my BMI (Body Mass Index) down to 19, from its current reading of 24
Key Result 2: Lower my “bad” cholesterol levels to 180 mg/ml
Action plans:
Exercise
- Take a cardiopulmonary capacity test to figure out my fat burn heart rate zone
- Buy an exercise heart rate monitor
- Enroll in Equinox
- Go to Equinox at least three times per week, and exercise at least 30 minutes at each visit at my target fat burn heart rate
Diet
- Cut all intake of processed sweets such as cookies and Oreo at the office
- Eat, on a seven-day moving average, no more than 1500 calories per day
- Eat at least 50 grams of fiber every day (preferably greens, but can be the Walgreens type)
- Drink no more than 4 doses of alcohol per week
You are good to go.
Now do the same with your other OKRs, around finance and relationships, and you’ll have your New Year’s resolutions in the form of Objectives, measurable Key Results and action plans, a proper framework I’m sure will get you much closer to what’s important for you :)
I hope now you know more about OKRs than when you started this article. If you have questions, tweet @franciscohmello or drop a line to kiko at qulture dot rocks.
Kiko
PS: If you want to learn more about how to manage your company using OKRs, download for free our book OKRs, From Mission to Metrics, also available for sale on Amazon.
