A Typical OKR System Cycle

A common OKR system cycle would be:

1) At the beginning of the year, the company defines a set of high-level strategic OKRs – preferably with input from the team.

It is important to understand that the strategic OKRs should not be set by the top executives in isolation, without inputs from the team. In his article titled Should You Build Strategy Like You Build Software?, Keith R. McFarland describes a model to create a more refined and execution-ready strategy:

Since people at many levels of an organization make daily tradeoffs that impact the company’s strategic success, the process needs to be designed to tap into ideas from all corners of the organization – more than just the top executives.

2) The executive team then validates the company OKRs, gathering feedback from the team.

3) Teams develop their Tactical OKRs using the bi-directional approach described above.

4) Teams map interdependencies and ensure alignment with other teams and initiatives.

5) Teams have weekly check-ins to track results and actions.

6) For companies using quarterly OKR, it is common to review the OKRs halfway down the quarter during a mid-term OKR review.

7) At the end of the cycle, you can have a quick retrospective/lessons learned and start over.

The simplest way to conduct a retrospective is the start-stop-continue format. In this model, each team member is asked to identify specific things that the team should: Start doing / Stop doing / Continue doing.

OKRs that haven’t been achieved in the previous cycle are re-evaluated so they can be included in the next quarter or discarded if they are no longer necessary.

Some companies view the Objective as a “vision” that the company and teams will pursue over time, so Objectives may rollover from one quarter to the next. For example, an Objective such as “Delight our Customers” is something that a company could use over several quarters, creating new Key Results at each tactical cycle.

Even some of the Key Results themselves can be the same over time, just changing the targets. Metrics such as Revenue and Net Promoter Score tend to be present in almost all quarters of all companies that I have seen. But the value drivers that each team will use to improve those metrics will change over time.