How to Do OKRs for Corporate Functions, An OKR FAQ
I’ve always wanted to do a blog series on OKRs for [insert department name here] and someday after the book is published I’ll take the time to do it.
In the meantime, let’s talk about this a bit more generally, to look at how Objectives and Key Results can work for “enabling functions” (sometimes referred to as “corporate functions” or “shared functions”). Think: Legal, Human Resources, Corporate Communications, Information Technology, Finance … all of the organizations that the company can’t operate without, but which aren’t delivering the organization’s core business to customers.
Let’s align on language first: What are OKRs?
First, let’s take a step back and level set a bit about the way I work with clients around Objectives and Key Results — I call it No-BS OKRs — which is particularly helpful in parts of the business where you are looking to actually change things. No-BS OKRs are helpful in parts of the business where you need more than incremental growth; where you are looking to transform; and where you’re looking to innovate.
If you’re setting goals around maintaining the status quo, or minor incremental improvement, you may find that planning activities well is more helpful than creating Objectives and Key Results. If what’s most important is getting something done then it doesn’t typically need a key result, it needs a project plan or milestone (do X by Y date). If what’s most important is doing something that yields a measurable outcome then that’s where we create No-BS OKRs.
Objectives and Key Results are collaboratively-created goals that answer key questions for an organization:
What’s most important for us to focus on?
Why does that matter?
How will we know (objectively) that we’re making progress?
What does measurable success mean? What would it mean to succeed wildly?
And, if you follow the best practices that I work with with clients from solopreneurs to the Fortune 100, that typically takes the shape of a set of up to four objectives at the company level; each objective having 2-4 key results. A completed set of No-BS OKRs, for reference, looks something like this example:
The biggest difference between creating No-BS OKRs and other forms of goal setting is the attention paid to creating aspirational, inspired, objectively measurable progress and outcome key results. Most types of organizational goal setting focus on creating goals about what will be completed — asking and answering the question:
“What do we need to do, or plan to do?”
With No-BS OKRs, instead, in parts of the business where it’s important to grow more than incrementally, or, to transform or innovate, we ask:
“What objectively measurable impact or results would be incredible for us to try to achieve?”
The first keeps you in a constant state of being busy and doing things — but not always achieving the actual impacts or outcomes that you may wish to. And, while you’re doing your activities, you’re relying on subjective estimates of progress (“What percent complete are we?”) instead of actual progress data, so it’s all too frequent that you do the things and then reach the end of the project or goal term and look up, and the thing is done, but the actual metric that matters — revenue, customer satisfaction, customer retention, employee satisfaction — hasn’t budged.
The latter gives us a chance to think about what might be possible to achieve, and then stretch ourselves to try to achieve that aspiration. Whether you achieve or “fail” at reaching the goal you set, the latter enables a culture of experimentation and learning, which is typically necessary for that more-than-incremental growth, transformation, or innovation that you’re here to achieve.
Now, how do OKRs work for enabling functions?
When you read the above, you may have thought to yourself:
“I don’t actually have much room or remit for more than incremental growth. I don’t control the outcomes of my work; we have a lot of activity that has to be done just to keep the lights on. So how do OKRs apply to me?”
you are very much not alone, despite the fact that little of what’s been written about OKRs addresses that question.
But I see that dynamic every time I lead an organization through an OKR localization exercise — where the organization looks at upline OKRs, and then translates them down into their domain, inspired by the upline OKRs.
There are huge swaths of most organizations where what’s most important is that certain things get done, on time: Payroll. Paying bills. Blog posts going live. Emails going out. Contracts being signed before deadlines. Tickets being closed by IT. Enabling functions typically carry a really heavy burden of these “keep the lights on” or maintenance tasks.
Let’s talk about a couple of the scenarios that affect these types of teams.
What if you have OKRs assigned by multiple leaders who don’t agree or add up?
Create your own clarity by synthesizing your own OKRs.
This is super common for enabling functions. You may be responsible to multiple regions with different or conflicting expectations of your department. You may be responsible to multiple functional organizations (e.g. a product division, and a separate central marketing organization). So instead of looking up to one set of upline OKRs, you may be looking at a pile of different OKRs from around the organization, trying to decipher what it all means for you. (And even with this situation, you may find yourself with a dearth of clarity about what’s expected of you because your organization doesn’t “show up” clearly in the upline OKRs… if that’s the case, we’ll talk more about that in the next “known issue.”
When you run into this dilemma, you get to practice your executive skill set.
Pull together the various expectations of you (which may be in the form of OKRs, or may be in the form of other types of expectations since not all departments in every organization may use the same model). Take a good hard look at them, and then use your synthesis skills to ask and answer:
“Which of these objectives and/or key results does my organization’s work support or align to?”
(If the answer is: “none of them,” you can skip to the next section.)
Once you’ve asked that question, you can start your own OKR “localization.” Don’t worry about the OKRs you don’t align to or support. Only consider the ones you do. Pull out a single sheet of paper, and put the expectations of you (the upline OKRs or responsibilities you align to) at the top of the page. Then, you can ask and answer standard localization questions:
“What measures of progress or success does my organization contribute to the upline expectation?”
“What outcomes are important for my organization to generate, to ensure that the company goal stays on track?”
It may not be a mathmatically exact match-up — the metric in the upline expectation may not be the same metric that’s relevant within your organization. For example, if at the company level you’re looking at a net profit key result, your organization may create a localized key result around reducing expenses, not “net profit” itself.
It’s really easy to fall into the activity-thinking trap when localizing OKRs — but try not to. Always ask yourself:
“Is what’s most important getting X activity done Y number of times?”
“If we do X activity Y number of times and nothing actually happens or changes, is that a success?”
“Or, is what’s most important that we try our best to achieve Z outcome — even if doing so is speculative or experimental?”
The first two call for a milestone or a delivery plan (or an individual goal). The last is a perfect case for a key result. You may still do activity X Y number of times in pursuit of Z outcome: but what’s important is your progress and/or learning about how to reach that outcome, not the doing of the activity.
Completing the above may leave you with only a handful of key results, and that’s okay. This is a great opportunity to then ask yourself the questions in the next section to identify any other objectives or key results that may make sense for you to clarify for yourself.
What happens when the upline OKRs don’t reflect your work?
When you’re asked to create OKRs about what’s most important, and you look at the company-level or upline OKRs and think:
“But… I don’t see how our work connects in to the upline OKRs”
it can sometimes be a moment of concern.
“Does our work matter, if it’s not reflected in the OKRs?”
is a common unspoken question that can lead to anxiety and undesirable behavior because of the fear that thought can cause.
In a healthy and well-designed OKR system, your work absolutely matters. Your work may not be visible in the company OKRs, but the company OKRs cannot be achieved without your organization doing its best.
If you look “up” and don’t see your work in the upline OKRs, that is okay. In that case, you can look at the upline OKRs and ask yourself:
“What can my team or organization do more excellently to help the company achieve these OKRs?”
“What are our biggest inefficiencies today that impact our ability to maximally support the organizational goals?”
Sometimes the most important key results for enabling functions are to rethink and redesign a legacy process you’ve always taken for granted in a way that saves person-hours, freeing up capacity to work on more critical and less wasteful tasks (e.g. Reduce person hours wasted on legacy process X by 50% (from 10/week to 5/week).
Sometimes it’s creating a key result around reducing turnaround time on important cross-functional responsibilities (Reduce turnaround time on contract approval from an average of 5 business days to an average of 3 business days.)
Your cross-functional collaborators can be an important source of insight about potential areas for improvement — as can people in your own organization. I love “painkiller” key results: key results that are created because they quantify a problem in the business and show an aspiration to make measurable progress toward alleviating the pain of that problem.
So even when the upline OKRs aren’t specific about your work, you can still ask yourself:
“How can my team enable the company to do its best on these OKRs?
and use the answers to inform the OKRs you create for your organization.
What happens when your localized OKRs are clear and complete?
Consider an alignment review.
The goal of the work described above is to create your own clarity by reconciling the expectations of your organization into a draft set of OKRs that fit on a single page. Work through the above thought exercises quickly — if it’s the first time you’re doing this, 90 min to two hours is reasonable, and that doesn’t have to be in one session. You can confer with your team members or colleagues to inform your draft.
And then once you have a rough draft of your localized OKRs, schedule an alignment review with your leader(s). Ideally, if possible, get all of the leaders you’re responsible to in the room at the same time. Provide the draft OKRs in advance for pre-review, and then in the room, the job is to review the page with your leaders to ensure their alignment. In that conversation, for each key result, the question is:
“Leader(s): my key result is [key result]. Is that aligned with your expectations?”
And you can work your way through your draft. Leaders may ask you to adjust targets; they may align on a single metric of most importance where your inputs had several varieties of a similar metric (e.g. if one leader is focused on revenue and one focused on profit, you can have a good alignment conversation about which you should be most focused on). They may ask you to consider adding measurable outcomes if you’ve identified activities; and if they ask you to add activities when you’ve identified measurable outcomes, you can make a note of the activities they mentioned at the bottom of the page in a section titled “Enablers” or “Initiatives.” Those are not OKRs — those are the activities that leadership is concerned with that support achievement of the OKRs, so that’s a good signal that those are the items you should keep leadership closely apprised of.
But then still ask:
“Okay, I’ve noted that Initiative of importance — can we clarify: do I have the right key result here speaking to that Initiative? When we complete that Initiative, is what I’ve written here our shared definition of a successful outcome?”
that way, a tactically focused senior leader knows that you’ve got the Initiative that matters to them on your radar, and, you can make sure you understand what’s actually expected of that Initiative beyond mere completion.
You won’t always be able to get all of the executives you report into or support into one room — but if that’s the case, and you’re the “middleman” trying to reconcile the various points of view, your one-page OKR working document can be the artifact to help make that more do-able. Use a color to identify the key results that everyone agrees about: those need no further discussion. Mark the ones that are not agreed in red and bold, and then use your 1:1s or ask for a brief cross-functional meeting to resolve the in-conflict key results.
Should you share your finalized OKRs with your team?
Absolutely!
With the above consolidation, clarity, and alignment process completed, you’ll end up with a single page view of your organizational OKRs. Here’s an example of a localized set of IT OKRs, drawn from the company-level set above.
You may have fewer OKRs than the company-level — which makes sense, because you may have a lot of maintenance work and other activity plans that don’t necessarily appear in the OKRs themselves, and it’s important to keep the outcomes you’re aiming for focused and manageable so you’re not spreading yourself too thin. Activities and work plans that align to support the OKRs are high priority; but other must-do critical “run-the-business” activities (those things like payroll, timely contract signing, etc) must get done in addition to what’s aligned to your OKRs, so you don’t want to bury yourself with too many of either.
And then depending on the depth of your organization, the localization and alignment structure may end here — often, what happens beneath this level is doing, or implementation. If you lead leaders/managers, they may localize OKRs for their domain using a similar practice as the above — but if what’s important about the work they lead is that it gets done then solid project management and delivery planning may be a better use of everyone’s time and provide greater clarity in the form of important milestones. If you lead individuals who don’t have direct reports, then it may be that below this point, people are creating individual goals — their own performance management goals, or growth and development goals — which can be thought of as “bottom up” instead of “top down.” Those bottom-up individual goals may sometimes be written like objectives and key results, but for a host of important reasons, most OKR experts don’t recommend localizing “down” to individual OKRs. But that’s a separate blog post, for another day. (Join my newsletter if you want an update when that goes live!)
What did I miss?
What questions do you still have about creating and localizing OKRs for enabling functions? I’d love to hear them, and I’ll add answers as they come in!
You don’t have to OKR alone!
Many organizations implement OKRs without providing the detail that their people need to create high-performance OKRs with confidence. Some people are perfectly happy “winging it,” but many of us may need more support and/or guidance than the town-hall kick-off. If your organization has an OKR Center of Excellence or OKR Core Team, definitely start there with your questions — and, I am here to help!
Whether you prefer:
just want to schedule an hour with me to ask your questions ($582)
or, need organizational training, leader support, or a larger or ongoing engagement (schedule a quick info call or complete this quick quiz for more information)
You do not have to OKR alone! And, I’d love to help!
-Sara Lobkovich, OKR Coach & Principal Consultant
