Objectives and Key Results (OKRs) are a goal-setting framework that helps companies align their teams and track measurable outcomes. An Objective is what you want to achieve, while Key Results are how you'll measure your progress toward that ambitious goal. This powerful framework connects company, team, and personal goals to measurable results, ensuring everyone moves in the same direction.
Components: Objectives vs Key Results
To properly use the OKR framework, it’s essential to understand its two core parts: the Objective and the Key Results.
An Objective is the ambitious, qualitative goal you want to achieve. It should be memorable, inspiring, and provide a clear direction. Think of it as the destination you want to reach.
Key Results are the quantitative signals that measure your progress toward the Objective. These are measurable outcomes, not a to-do list of tasks. If the Objective is your destination, Key Results are the signposts that confirm you are on the right path.
Here’s a simple example:
Objective: Delight Our Customers with an Unforgettable Q4 Experience
Key Result 1: Improve the customer satisfaction (CSAT) score from 85% to 92%.
Key Result 2: Reduce average support ticket response time from 24 hours to 8 hours.
Key Result 3: Increase the rate of 5-star reviews by 20%.
OKR vs KPI vs SMART
While OKRs, KPIs, and SMART goals all help businesses track progress, they serve different purposes. Understanding when to use each framework can make the difference between scattered efforts and focused success.
When to use OKRs: Choose OKRs when you need to rally your entire team around a bold vision that pushes boundaries. They work best for strategic initiatives that require cross-departmental collaboration.
When to use KPIs: Use KPIs to monitor the pulse of your business operations. These are your dashboard metrics that tell you if things are running smoothly day-to-day.
When to use SMART Goals: Turn to SMART goals for tactical execution and personal development plans where you need crystal-clear parameters and accountability.
How to write OKRs?
Creating effective OKRs isn't rocket science, but it does require a structured approach. Follow these five steps to build OKRs that drive real results for your SMB.
Choose 1–3 company objectives
Start at the top with your company-wide objectives. Less is more here—pick just one to three ambitious goals that will move the needle for your business this quarter.
Your objectives should be qualitative, inspiring, and memorable. Think "Become the go-to solution for local restaurants" rather than "Increase revenue by 15%." Ask yourself: If your team achieved only these objectives this quarter, would it represent meaningful progress?
Write objectives that energize your team and clearly communicate what success looks like. They should be challenging enough to require focused effort but not so vague that people don't know where to start.
Draft 2–4 Measurable KRs per Objective
For each objective, create two to four Key Results that answer the question: "How will we know we've achieved this objective?"
Your Key Results must be quantifiable and outcome-focused, not activity-based. Instead of "Launch 5 marketing campaigns," write "Increase qualified leads by 40%." Instead of "Attend 10 networking events," write "Generate 25 new business partnerships."
Use numbers, percentages, or clear benchmarks. If you can't measure it, it's not a good Key Result. Each KR should represent meaningful progress toward your objective—achieving all the Key Results should essentially fulfill the objective.
Align team OKRs to the company set
Once you have company OKRs, cascade them down to individual teams. Each team's objectives should directly contribute to achieving the company objectives.
Create a clear line of sight from team goals to company goals. If your company objective is "Delight customers with exceptional service," your support team might focus on "Resolve customer issues faster than ever," while your product team tackles "Build features customers actually want."
Avoid creating team OKRs in isolation. Every team objective should answer: "How does this help achieve our company objectives?" If you can't make that connection, reconsider the objective.
Define owners & thresholds
Assign a single owner to each Key Result, someone who will be accountable for driving progress and reporting updates. Ownership doesn't mean doing all the work alone, but it does mean being responsible for coordination and results.
Set clear thresholds for success. Define what constitutes 30% achievement, 70% achievement, and 100% achievement for each Key Result. For example: "30% = 5 new partnerships, 70% = 15 new partnerships, 100% = 25 new partnerships."
These thresholds help teams understand expectations and make it easier to score progress objectively at the end of the quarter.
Sanity check (Ambitious but realistic)
Before finalizing your OKRs, run them through a reality check. They should be ambitious enough to inspire stretch performance, typically, achieving 70-80% of your Key Results indicates success.
Ask these questions: Do our objectives excite the team? Are our Key Results measurable and outcome-focused? Can we realistically make meaningful progress in one quarter? Do our team OKRs clearly support company objectives?
If your team consistently hits 100% of their Key Results, they're probably not ambitious enough. If they consistently achieve less than 40%, they might be unrealistic. Find that sweet spot where success requires focused effort but remains within reach.
The power of "stretch" goals
In the OKR world, "stretch" means setting goals that push your team beyond their comfort zone. Your Key Results should be ambitious enough that achieving 70% feels like a real win.
If your team consistently hits 100% of their Key Results, they're likely playing it too safe. Stretch goals encourage innovation, force teams to think differently, and often lead to breakthrough results that wouldn't happen with conservative targets.
Avoid sandbagging at all costs
Sandbagging, deliberately setting easy targets to guarantee success, is the enemy of growth. When teams sandbag their OKRs, they create a false sense of accomplishment while missing opportunities for real improvement.
Watch for these sandbagging red flags: teams that always hit 100% of their targets, Key Results that feel like routine work rather than challenges, or objectives that don't excite anyone on the team.
OKR examples for SMB teams
Seeing OKRs in action makes all the difference. Here are real-world examples tailored for small business teams that show how to transform daily work into measurable progress toward ambitious goals.
Sales team OKR
Objective: Accelerate New Customer Acquisition in Q1
Key Result 1: Increase monthly new customer signups from 15 to 25
Key Result 2: Improve lead-to-customer conversion rate from 12% to 18%
Key Result 3: Generate $75,000 in new recurring revenue
This sales OKR focuses on both quantity (more customers) and quality (better conversion), while tying everything to revenue impact that matters to the business.
Marketing team OKR
Objective: Build Brand Awareness in Our Local Market
Key Result 1: Increase website organic traffic from 2,500 to 4,000 monthly visitors
Key Result 2: Grow social media following from 800 to 1,500 engaged followers
Key Result 3: Generate 50 qualified leads from content marketing efforts
Notice how this marketing OKR balances top-of-funnel awareness metrics with bottom-funnel lead generation, creating a complete picture of marketing success.
Product team OKR
Objective: Deliver Features That Customers Actually Use
Key Result 1: Launch the mobile app with 70% of existing customers adopting it within 60 days
Key Result 2: Increase average daily active users from 200 to 350
Key Result 3: Achieve a Net Promoter Score of 8.5 or higher for new features
This product OKR emphasizes adoption and satisfaction over just shipping features, ensuring the team builds what customers value.
Customer Experience (CX) Team OKR
Objective: Transform support into a competitive advantage
Key Result 1: Reduce average response time from 4 hours to 1 hour
Key Result 2: Increase customer satisfaction (CSAT) score from 85% to 92%
Key Result 3: Achieve a 95% first-contact resolution rate
The CX OKR combines speed, quality, and efficiency metrics to create a superior customer support experience that differentiates the business.
HR Team OKR
Objective: Build a High-Performance Culture That Retains Top Talent
Key Result 1: Reduce voluntary turnover rate from 18% to 10%
Key Result 2: Increase employee engagement score from 7.2 to 8.5
Key Result 3: Fill 90% of open positions with internal candidates or referrals
This HR OKR focuses on retention, engagement, and sustainable talent acquisition rather than just filling seats quickly.
Key Patterns in Successful SMB OKRs
Notice how each example balances leading indicators (activities that drive results) with lagging indicators (final outcomes). They're ambitious but achievable, and each Key Result directly supports the overarching objective.
These examples show that great OKRs aren't about perfection, they're about focusing your team's energy on the outcomes that will make the biggest difference for your business.
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