OKR Framework

Benefits of Implementing OKR Framework in Your Company

To an outsider, a company’s actions and decisions might seem arbitrary, like magic, or even dictated by an invisible hand. Business professionals know, however, that successful companies make decisions based on careful planning and strategic frameworks. That said, there is far from a solid consensus on what this strategy needs to look like, and exactly what decisions a company must take in order to pave a successful path forward. Any successful strategy will ultimately need to be contextual, tailored to the material conditions of the company and its team. There are many different, often compatible, frameworks that organizations might adopt, adapt, and implement in order to design their own path. One of these is the concept of an OKR Framework, or Objectives and Key Results.


What is OKR?

As mentioned above, OKR stands for Objectives and Key Results. More precisely, OKR framework is what businesses can use to track progress meaningfully and, ultimately, to better structure their decisions and plans of action. OKRs are naturally split up into two main factors, the Objectives and the Key Results. Objects, slightly more abstract, are somewhat overarching goals that a business wants to achieve. Key Results are measurable and identifiable indicators or steps towards that larger goal. For example, an OKR for profit margins might look like this:

Objective: Increase profit margin for product X by 10%.

Key result: Streamline production.

Key result: Increase brand value.

Key result: Increase upselling rate by Y%.

The objective is an overarching goal, and the key results should function as more precise steps towards establishing this goal. However, this is also an example of a not-so-great OKR—we can do better. The objective is pretty precise and quantifiable, which is great. The more precise, the better. The first two key results, however, fall a bit short of this. Instead of “streamline production,” we might consider more specific results like cutting specific unnecessary costs, or automating certain costly processes. Instead of “increase brand value,” we might consider achieving a specific number of social media impressions, etc. These are concrete and measurable, and clearly walk us toward our larger goal.

This two-part split is a more effective way of setting goals than simply stating general goals for the business since it forces us to consider concrete and realistic steps to take in order to meet the objective. At the same time, it offers us plenty of flexibility and opportunity to reaffirm company direction. These are two of the major benefits.


Company Direction

Having a well-defined company mission and direction is a great and even necessary way to build worker motivation and morale, but it can be a puzzling challenge to make sure a mission statement feels like more than just empty rhetoric. Connecting the mission to the day-to-day tasks of production is not exactly trivial, but an OKR framework can help make those connections both clear and strong.

Objectives should be as precise as possible, but that doesn’t mean that they have to be worded coldly. They’re a perfect opportunity to communicate how actions contribute towards or embody different company values and beliefs, and the key results form a direct link to more concrete, everyday tasks. Apart from the intentional structuring towards measurable, empirical progress in the company’s trajectory, this messaging opportunity can help build a stronger and healthier workplace culture that helps everybody from the workers to the shareholders.



Another great benefit that comes with OKR is the flexibility that comes with the framework. Objectives are often long-term goals and, sometimes, goals that are never fully “obtained.” They can serve as ideals to work towards. However, workplace and market conditions are constantly changing, so how a company chases these ideals can depend on how these conditions take form. This way, the Key Results serve not only as a way to ground Objectives in reality, but also as a way to navigate changing conditions and expectations.

Many businesses define Key Results as measurable items on a quarterly schedule. This way, there is consistent and relatively quick feedback that can be used to evaluate a given tactic. If quarterly Key Results aren’t looking good, businesses don’t have to wait for yearly reports or indefinitely to adapt. Adapting concrete strategies and metrics to better reach the overarching objective is an effective way to make OKR bring agile principles into your business strategy, and a great way to keep things fresh and effective.

 There is no silver bullet for success, and every business will have to adapt to its own context, goals, and team, but OKR establishes a simple yet effective framework that grants two invaluable benefits: direction and flexibility.

Living Pono is dedicated to communicating business management concepts with Hawaiian values. Founded by Kevin May,  an established and successful leader and mentor, Living Pono is your destination to learn about how to live your life righteously and how that can have positive effects in your career. If you have any questions, please leave a comment below or contact us here. Also, join our mailing list below, so you can be alerted when a new article is released.

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