Fenway Sports Group: John Henry & Thomas Werner
Objective
Make money for stakeholders
Key Results
Get Started with OKRs
Introduction
Objectives and key results (OKRs) are a goal-setting system that encourages innovation, provides focus and commitment, and motivates teams to achieve results.
OKRs can help us stay in touch with some fundamental questions:
- How do we know we’re heading in the right direction?
- Are we using the right momentum?
- Is there value in what we are doing?
The aim of this guide is to help us think about OKRs in the same way.
Check your understanding with the OKR quiz.
What are they?
A great tool to help create focus and commitment to the right priorities.
A way of increasing transparency across the organisation and connecting peer groups.
A way of exposing redundant efforts and duplication.
An approach that empowers teams to work on the right things by making sure the overall direction is clear and aligned with the vision.
They enable and encourage teams to be open and question how the work being asked of them aligns with the strategy.
An excellent complement to Scrum and Kanban practices, helping teams understand and deliver on longer-term strategy.
What are they not?
- A performance management tool.
- The same as key performance indicators (KPIs).
- A list of fixed targets that must always be hit.
- A rigid chain of targets handed down from one team to the next.
- A list of tasks people now need to complete.
- A replacement for long-term visioning, short-term planning or sprint planning.
Basic hygiene
A few working agreements help keep OKRs useful:
- Keep the focus narrow. Aim for no more than three objectives, with up to five key results for each.
- Let teams shape the objectives. Around 60% or more coming from the people doing the work is a useful starting point. The right balance will depend on your context.
- Agree them together. Teams and leaders need a shared understanding of the intent, priorities and trade-offs. Dictating a target does not create commitment.
- Make the results measurable. Include a target and a timeframe, and agree how you will collect the evidence.
- Give people a fair chance to influence the result. The people responsible need the ability, support and access to decisions required to make progress.
- Make them visible and understood. People across the organisation should be able to find the OKRs and understand how their work connects.
- Keep them separate from individual performance evaluation. People need to be able to discuss progress honestly.
- Inspect and adapt. OKRs can change as you learn. Carry an incomplete key result into the next period only if it is still important.
Agree how you will review and score progress. These working agreements give the team a starting point, and experience will help you improve them.
Where they fit
Using OKRs in a Scrum environment is a great way to help focus beyond the sprints by measuring how your increments are contributing towards the strategy.
The diagram illustrates one planning rhythm, connecting the questions about direction and value to the work teams refine and deliver. The planning horizons and cadence should fit your context.
Connecting OKRs to wider goals
OKRs can help connect the work of the team to the overall strategic priorities.
- Strategic alignment: OKRs help leaders and teams align their efforts, making sure everyone in the organisation is moving in the same direction.
- Focused execution: OKRs help focus on what’s most important by prioritising work with the biggest business impact.
- Engaged teams: teams achieve remarkable results when they’re engaged with a purpose. OKRs help communicate the bigger picture in a way everyone understands.
OKR alignment
Imposing strict rules on cascading OKRs can slow teams down, kill autonomy and create bureaucracy. Align teams around a shared direction, then give them room to decide how to contribute.
Here is a deliberately exaggerated football example to make the relationships easy to understand. Imagine Liverpool during Jürgen Klopp’s time as manager: Fenway Sports Group’s John Henry and Thomas Werner want the club to make money and win trophies. Klopp, the coaches, scouts and commercial teams each focus on how they can contribute. The objectives and measures below are illustrative.
How the club’s goals connect
Company
Management
Football management: Jürgen Klopp
Objective
Win the Premier League and reach the Champions League final
Key Results
Operations and commercial
Objective
Secure TV rights and fill stands above 90%
Key Results
Teams
Offensive coaching
Objective
Increase goals per game
Key Results
Defensive coaching
Objective
No. 1 in key defensive statistics
Key Results
Scouting
Objective
Hire two exciting young players
Key Results
Make money → win competitions → goals per game → Shots on target
The groups share a direction while focusing on the contribution they can make. The offensive coaches do not need to take responsibility for filling the stands.
This illustrates alignment, but the measures still need work before they become complete key results. “Shots on target” needs a target and a timeframe, with a baseline where relevant. Completing scouting visits would not, by itself, establish that the right players had been found.
Setting and aligning team objectives
The team takes input from:
- Top-down business priorities and strategy.
- Feedback from the previous period, such as the last quarter.
- Forecasts of what could be delivered in the next period, typically a month or quarter.
- Feedback on what should be delivered in the next period.
Armed with this information, the team can create one to three OKRs for the period and meet with leadership to ensure alignment.
What about business-as-usual activity?
Teams sometimes create a fourth OKR to look at business-as-usual activity, with key results that help eliminate or reduce repetitive work for the team.
The OKRs are tracked and inspected during the period. It is not a one-off setting exercise at the end of the quarter. Feedback is constantly gained and OKRs inspected.
What happens if high-value work comes in that isn’t part of our OKRs?
OKRs provide focus and transparency for the team and allow discussion to take place. Rather than just doing the work that has arrived and potentially derailing existing work, the team can get together and ask:
- Is the new work valuable?
- Is it more or less valuable than the work already agreed?
- If we do this, will we affect the work already committed to?
- What does our customer think?
- How did we miss this when we talked about OKRs at the start of the quarter?
- What can we do differently next period?
By having transparent OKRs and something to focus on and use as a guardrail, the team can self-organise around these problems. Don’t take on too much: doing less work gets more done. Control your work in progress.
KPIs and OKRs
Key performance indicators are the key measures organisations use to track their operation. They help inform decisions: this product isn’t making the returns we expected, so we need to do something; or we’re spending too much money here, so let’s change that.
Objectives and key results differ because they provide guidance on where the organisation wants to head and how to tell whether it is making the expected progress towards the goal.
As KPIs are normally numerical, they often provide useful measures for key results. A measure still needs a target and a timeframe to become a complete key result.
For example, a KPI showing the number of customer complaints could provide a measure for an objective such as: “Our department becomes the customer service we ourselves would like to call.”
OKRs encourage innovation, experimentation and alignment. While KPIs often help us understand whether we’re keeping the lights on, OKRs help focus changes that improve the business.
OKRs can support agile ways of working and a shift in culture and mindset:
| From | To |
|---|---|
| Top-down command and control | Empowered teams who can innovate |
| Project solutions and deadlines | Customer outcomes and measures |
| Predictive planning | Adaptive experimentation |
| Long releases | Rapid and continuous delivery |
| Reports and RAG status gaming | Data-driven, transparent reporting |
Using KPIs already?
- If we aren’t hitting our core operational KPIs, an OKR can focus improvement on that problem.
- If we are hitting them, OKRs can help us improve the business further.
- If all our time goes into keeping the lights on, an OKR can help us make room for improvement.
Your OKRs should not have a negative impact on core business values. Don’t compromise safety to meet an objective that focuses on going faster.
Writing OKRs
Anyone, a team or an individual, can create an OKR. OKRs are at their best when aligned with the goals of the larger organisation.
Like most things agile, OKRs are pretty simple but difficult to get right.
The formula is simple: objectives are goals and intents; key results are time-bound and measurable milestones under those goals and intents.
There are some basic principles you can follow.
For objectives
- Keep them simple, short and easy to remember: one or two sentences at most.
- Make them aspirational.
- For stretch objectives, make it safe to fall short and avoid choosing easy targets.
- Avoid business jargon and acronyms.
- Keep the total low: aim for two or three.
For key results
- Try to avoid a “deliver the plan” key result.
- Set between two and five key results per objective.
- Keep them number-driven where you can.
- If you don’t know the baseline, be prepared to find it.
- Avoid sandbagging: a stretch key result should be possible but hard to achieve.
If you have KPIs, you may already have a head start on the measures for your key results.
Start small, perhaps with one objective and a couple of key results, so the team can get used to the idea and experience the cadence and benefit.
Expect the first few OKR-writing sessions to take time. In our experience, it can take a few two-hour sessions because there is often a lot of thinking to do initially.
An example: improving our meetings
Consider two versions of the same OKR. The figures below are illustrative targets.
A weak starting point
Objective: Sort our meetings out.
- Reduce the number or length of our meetings.
- Have fewer meetings.
- Invite the right people.
How much reduction would be enough? Which people are the right people? Would fewer meetings solve the problem? There is no clear way to judge whether these key results have been achieved.
A better version
Objective: Teams love the balance of meetings.
- Reduce total meeting durations by 20%.
- Have a meeting to work balance of 20/80.
- Increase meeting attendance from 60% to 90%.
The objective gives us something more meaningful to aim for, and the targets make progress easier to inspect. It is better, but still needs work.
We need a timeframe, a baseline for the reduction and clear definitions of the balance and attendance measures. The first two results also overlap. Attendance is only a proxy for value: people can attend a meeting without finding it useful.
Would achieving these targets tell us that teams love the balance? We would need to check that with the people affected. Numbers help us see progress, but we still need to ask whether they describe the improvement we intended.
How to be successful: commitment and consistency
OKRs need commitment and consistency. Keeping them visible and using them to guide decisions is what makes them useful.
There are three patterns to watch for:
- Sustained improvement (violet): leaders and teams keep the results in view, update the evidence and discuss progress. Risks surface early enough to do something about them.
- Haphazard focus (purple): attention comes and goes as other things take over. Eventually, someone notices that progress is off course, but there may be little time left to respond.
- Set and forget (pale lavender): the team agrees its OKRs and rarely returns to them. The opportunity passes, and confidence in the approach can suffer.
Make checking progress a regular habit. A short weekly update can keep key results in view and expose risks early. Discuss what is changing and decide whether to continue, change the approach or ask for help.
Scoring and grading OKRs
Inspect your OKRs periodically to ensure you’re still doing the right things and making the progress you expect. Keep the data up to date and be honest about progress.
For the larger quarterly review, you have a couple of options. Keep it simple with a yes/no score for each key result and roll that up to the objective, or use a scale from 0.0 to 1.0.
For stretch OKRs, around 0.7 to 0.8 can be a healthy balance between challenge and progress. Consistently scoring 1.0 may mean the targets were too easy. Scores of 0.0 to 0.3 should prompt questions about whether intent and reality are closely aligned.
Use the score to understand what happened and what to change, rather than treating it as a rating of the people doing the work. Read more about grading OKRs.
Combining key results into an objective score
Score each key result using the method you agreed when setting it. Where the key results carry equal weight, you can average their scores to create an overall score for the objective.
For example, three key results scored at 0.8, 1.0 and 0.6 give:
(0.8 + 1.0 + 0.6) / 3 = 0.8
Keep the individual scores visible. An overall 0.8 still includes a key result at 0.6, and an average can conceal a critical result that was missed. Discuss what each result tells you about the objective.
If the key results carry different weights, agree those weights in advance and use a weighted average. Google’s OKR guide explains this approach to grading.
Frequently asked questions
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How do we get teams to commit to even more agile meetings?
If you're a Scrum team, incorporate monthly or quarterly OKR reviews into a Sprint Review where that fits. Allow time for a couple of extra sessions at the start, especially when formulating your OKRs.
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Can we use OKRs with just one squad, or do we need several levels?
Yes, you can have squad-level OKRs. Their real power is transparency: if teams work with them together, they can see how their efforts connect and gain more benefit.
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Should we use OKRs with vision and mission statements?
Yes. OKRs complement both. They tend to cover a much shorter period than a vision, and their measurable key results make progress more tangible.
Are there alternatives to OKRs?
There are many alternatives that share principles with OKRs. One example is Spotify Rhythm, described by Henrik Kniberg in 2016. It maps key bets back to the company’s beliefs and direction, helping connect work at the coalface to strategic intent.
Put OKRs to work
Read how our work at Funding Circle used OKRs and coaching to strengthen strategic alignment, improve team engagement and support more confident, experimental teams. Want to connect your teams’ work with your strategy? Contact us to discuss introducing OKRs or improving how you use them.
Try the quiz below to check your understanding and see which principles to revisit.
Ready to put OKRs into practice? Take the quiz
Get ready to try OKRs
Objective: Build the understanding to try OKRs with your team.
By the end of this attempt, aim to achieve these Key Results:
- KR1: Writing and scoring OKRs
Correctly assess every statement about meaningful results and scoring.
- KR2: Putting OKRs into practice
Correctly assess every statement about starting with OKRs, aligning teams, reviewing progress and prioritising work.
Choose True or False for each statement. Aim for 1.00 in each KR, then use the feedback to decide what to try or revisit.
You can also open the quiz on its own page.
