Setting OKRs seems simple: write an objective, add some key results, done. But teams consistently struggle to write OKRs that actually drive behavior. This chapter gives you a proven framework for setting OKRs that your team will rally behind.
The 4-Step OKR Setting Framework
Before diving into writing, follow this framework to ensure your OKRs are grounded in strategy:
Review Your Strategy
What's your company/team mission? What are the big bets for this year? OKRs should support these, not operate in a vacuum.
Identify What Needs to Change
Look at last quarter's results, customer feedback, and market conditions. What's working? What's not? What's the biggest opportunity?
Draft Objectives (What)
Write 2-4 qualitative objectives that capture what success looks like. These should be inspiring and ambitious.
Define Key Results (How)
For each objective, add 2-4 measurable key results that prove you achieved the objective. These must be quantifiable.
Writing Objectives That Inspire
Your objective should make people want to get out of bed in the morning. It's the "why" behind the work. Here's how to write them:
The Objective Formula
Objective Template
[Action verb] + [What you're achieving] + [For whom/why it matters]
Examples: "Become the most trusted..." / "Deliver a world-class..." / "Build a..."
Characteristics of Great Objectives
Numbers belong in key results. Objectives should paint a picture of success.
Stretch goals motivate. Impossible goals demoralize.
Everyone should understand what you're trying to achieve without explanation.
OKRs create urgency. A quarter is long enough to make progress, short enough to stay focused.
Objective Examples by Team
Product Team
Marketing Team
Sales Team
Engineering Team
Writing Key Results That Drive Progress
Key results are where the rubber meets the road. They transform inspirational objectives into measurable outcomes.
The Key Result Formula
Key Result Template
[Verb] + [Metric] + [From X] + [To Y]
Examples: "Increase NPS from 32 to 50" / "Reduce churn from 5% to 3%" / "Grow MRR from $100K to $150K"
The Outcome vs. Output Test
The most common mistake in writing key results is confusing outputs (activities) with outcomes (results). Here's how to tell the difference:
| ❌ Output (Activity) | ✅ Outcome (Result) |
|---|---|
| Launch new feature | 25% of users adopt new feature within 2 weeks |
| Publish 10 blog posts | Reach 10,000 monthly organic visitors |
| Hire 3 engineers | Increase sprint velocity by 40% |
| Run 5 customer interviews | Identify 3 validated problems to solve |
| Send weekly newsletter | Achieve 35% email open rate |
The 'So What?' Test
When you write a key result, ask "so what?" If the answer is another result, you've written an output. Keep asking until you reach the real outcome.
"Launch feature" → So what? → "Users adopt it" → So what? → "Engagement increases" ← That's your key result.
Types of Key Results
1. Baseline Key Results
When you don't have data yet, your first key result might be to establish the baseline:
"Establish baseline NPS score by surveying 200+ customers"
2. Improvement Key Results
Most key results show improvement from a current state:
"Increase 30-day retention from 45% to 60%"
3. Threshold Key Results
Sometimes you need to maintain a standard while pushing elsewhere:
"Maintain customer satisfaction score above 4.5/5 while scaling"
Complete OKR Examples
Let's look at fully formed OKRs for different teams. Use these as templates for your own:
📌 Objective: Deliver an onboarding experience that turns new users into power users
📌 Objective: Become the go-to thought leader for OKR best practices
📌 Objective: Create customers who are so successful they become advocates
📌 Objective: Build a platform that's fast, reliable, and a joy to develop on
Common OKR Mistakes to Avoid
Mistake #1: Too Many OKRs
7 objectives with 5 key results each = 35 things to track
If everything is a priority, nothing is. Stick to 2-4 objectives maximum.
Mistake #2: Sandbagging
Setting goals you know you can hit 100%
If you're hitting 100% every quarter, your OKRs aren't ambitious enough. Aim for 70%.
Mistake #3: Confusing OKRs with Tasks
"Launch feature X by March 15"
This is a task, not a key result. Key results measure the impact of your work, not the work itself.
Mistake #4: Setting OKRs in Isolation
Teams creating OKRs without cross-functional input
OKRs should be aligned. Marketing's OKRs should support Sales'. Sales' should support Revenue goals.
Mistake #5: Set and Forget
Creating OKRs in January, reviewing in March
OKRs should drive weekly priorities. If you only look at them quarterly, they're useless.
The OKR Quality Checklist
Before finalizing your OKRs, run them through this checklist:
✓ Objective Checklist
✓ Key Result Checklist
The Quarterly OKR Process
Here's a timeline for setting OKRs each quarter:
Leadership aligns on company priorities
Review last quarter, identify key strategic themes for next quarter.
Teams draft OKRs
Each team creates draft OKRs aligned with company priorities.
Cross-functional review
Teams share OKRs, identify dependencies, resolve conflicts.
Finalize and communicate
Lock in OKRs, share across organization, begin execution.
What Happens After Setting OKRs?
Congratulations—you've set great OKRs. But here's the uncomfortable truth: setting OKRs is the easy part.
The Execution Gap
70% of OKRs fail, and it's not because of bad goal-setting. It's because there's a gap between quarterly OKRs and daily work. Teams set inspiring goals but can't figure out what to do on Monday morning.
In the next chapter, we'll tackle this head-on: the Translation Gap. You'll learn why OKRs fail at execution and what to do about it.
Then in Chapter 4, we'll show you exactly how to turn your quarterly OKRs into weekly action plans—so your team knows what to work on every single week.