Effective OKR Implementation for Organizational Success

OBJECTIVES & KEY RESULTS (OKR)

Hierarchy of OKRs 5-10 Years Ultimate Objective Key Result Company Objective Company Objective 1 Year Key Result Key Result Group Objective Group Objective Key Result 3 Months Task Initiative Initiative 1 Week Task

Strategic Alignment Long-Term Mission & Vision Mission & Vision This Year Strategic Goals Annual Strategic Goal 1 Annual Strategic Goal 2 This Quarter Quarterly Objective 1 Quarterly Objective 2 Quarterly Objective 3 Objectives Key Results 1 Key Result 2 Today Tactics & Activity Activity 1 Activity 2

OKR Weekly Updates Vision Mission OKR CYCLE 3 MONTHS Guiding Principle Annual Goals OKR Planning (Workshop) OKR Review Goals Retrospectives

OKR Planning Cycle Company Annual OKRs Planning Q1 Team Planning Q1 Team Retrospective Q2 Team Planning Q2 Team Retrospective Q3 Team Planning Q3 Team Retrospective Q4 Team Planning Q4 Team Retrospective Announce Team OKRS Announce Team OKRS Announce Team OKRS Announce Team OKRS Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1 Q2 Q3 Q4 Annual Company Retrospective

MILESTONE WHO? HOW? WHEN? Establish Company-wide Priorities & OKRs for 20XX and Q1 No later than1 month before the new year 1 Annual Leadership Team Offsite CEO & Leadership Team Kick off the year & Q1 Establish Team & Individual OKRs for Q1 No later than the 2nd week before the new year 2 Regular Team Meetings & 1:1s Everyone Rollout Company-wide & Team Q1 OKRs No later than the 3rd week before the new year 3 Company-wide Meetings All Staff No later than the end of the 1st week of the month Report on Progress of OKRs To-Date 4 Individuals Update the OKR Tool Everyone Manage results from Q1 No Later than the End of the 2nd Week of the Month Discuss OKR Progress 5 Team Meetings or 1:1s Individual Contributors w/ Managers Evaluate Q1 Performance & Set Q2 OKRs Team & Individual Level Individuals Update the OKR Tool & Review in Team Meeting or 1:1s No Later than the End of the 2nd Week of the Month 6 All Staff Present Q1 Performance and Q2 OKRs Company-wide & Team level Quarterly Business Reviews (Executive & Team Level) No Later than the End of the 3rd Week of the Month 7 All Staff Review Q1 performance and set Q2 goals Publish Quarterly Performance Results Communicate Results to Whole Organization & to Board if Appropriate Right after the Quarterly Business Review 8 CEO & Leadership Team Recalibrate Individual OKRs if Necessary No later than the 3rd week of the quarter 9 Individuals Update the OKR Tool Individuals

OKR Drafting Checklist Practitioner Checklist Objectives Key Results Objectives Key Results Directional Makes the objective achievable OKRs are set on a quarterly basis (and for company-level also on annual) Most people are aware that 70% progress should already be an impressive result Ambitious Measurable Aligned Not a KPI Most people don t have more than 3-5 objectives with 4 key results each Everyone updates progress every week Time Bound Not a task / to-do OKRs are transparent, aligned and easily accessible OKRs are closed & rated at the end of each quarter If someone looks at it and sees 50% progress, he/she knows where I stand If someone looks at it and sees 50% progress, he/she knows where I stand Don t have too many The entire company takes part

OKR Cycle Checklist Announce the process. Describe why you implement now this OKR, describe the problems a formal OKR process will solve, or how they will improve the company s performance. Establish enterprise- level context Set company goals for the quarter. Management (and the CEO) should be responsible for defining and choosing these goals. Share goals with the company. 2-weeks before the start of the quarter, publish the company s OKRs in a highly-visible and transparent location, best via OKR software Each team publishes their goals ~2 weeks before the start of the quarter. Co-create and localize OKRs In the week preceding the quarter, teams collaborate and review each other s OKRs and adjust accordingly Teams publish and commit to their shared and reviewed OKRs before the start of the quarter. Identify the leads and contributors who are responsible (leads) for delivering each KR. Develop action plans Establish a regular check-in schedule to evaluate progress, ideally on a weekly cadence. (via OKR software emails can be sent on a weekly base) Schedule bi-weekly or monthly reviews and quarterly retrospectives.

OKR Cycle Checklist (Cont.) Set aside time each week (during team meetings if possible) to discuss objectives. Keep these meetings short and crisp - they shouldn t turn into a long status update. Every other week the team should do a confidence check-in to discuss progress and whether the team s OKRs will be achieved. (can be updated via the OKR software) Ask hard questions: Check-ins and scoring What changed in the Key Results since the last meeting / check-in? What is the confidence level that we can deliver our key results? What is slowing us down or jeopardizing our progress as a team? How can we increase confidence or remove hurdles? Have the lead (owner) of each KR scored the result based on how much was accomplished Discuss as a team what went well for each KR, as well as obstacles and blockers. Common questions to help guide the review process include: What came up unexpectedly? Did priorities shift and impact OKRs? How did you do on each KR? What worked, what didn t, and why? What adjustments will we make for the next cycle? Quarterly reviews Talk through what your team should start doing for goals, stop doing, and continue doing. Use this to create an action plan moving forward. Common questions to help guide the review process include: What came up unexpectedly? Did priorities shift and impact OKRs? How did you do on each KR? What worked, what didn t, and why? What adjustments will we make for the next cycle?

MANAGEMENT Objectives Key Results OKR Levels Key result 1 Key result 2 Key result 3 Increase profitability by 30% this year TEAM A TEAM B Objectives Key Results Objectives Key Results Key result 1 Key result 2 Key result 3 Key result 1 Key result 2 Key result 3 Increase profitability by 30% this year Increase profitability by 30% this year EMPLOYEE A EMPLOYEE B EMPLOYEE C EMPLOYEE D EMPLOYEE E EMPLOYEE F Increase profitability by 30% this year Increase profitability by 30% this year Increase profitability by 30% this year Increase profitability by 30% this year Increase profitability by 30% this year Increase profitability by 30% this year Key result 1 Key result 2 Key result 3 Key result 1 Key result 2 Key result 3 Key result 1 Key result 2 Key result 3 Key result 1 Key result 2 Key result 3 Key result 1 Key result 2 Key result 3 Key result 1 Key result 2 Key result 3

Aspirational Vs. Operational Aspirational Key Results fail at an average Operational Key Results use a 70-100% rate of 40%, meaning 60% completion. success threshold for targets, any score under $4.2B $3.5B Aspirational KRs are typically set at 60-70% 100% would be deemed a failure. They are to while encouraging employees to aim high. be achieved in full within the set time frame ASPIRATIONAL KR OPERATIONAL KR KR 4 KR 4 KR 3 KR 3 KR 2 KR 2 KR 1 KR 1 15 13 11 9 7 5 3 1 -1 -1 1 3 5 7 9 11 13 15

OKR Canvas VISION STRATEGIC GOALS NORTHSTAR Long-term, 3-5 years Mid-term, 1-3 years The one metric that matters 1. Objectives here 1. Objectives here 1. Objectives here OBJECTIVES (What do you want to achieve?) 1. Key result here 4. Key result here 7. Key result here 2. Key result here 5. Key result here 8. Key result here 3. Key result here 6. Key result here 9. Key result here KEY RESULTS (How do you want to achieve it?)

OKR Canvas Label: Label: Label:: COMPANYWIDE OBJECTIVES Description Description Description Label: Label: Label: OBJECTIVES Description Description Description What Outcome must my team deliver to achieve the company-wide objective? What do we want to achieve? What must we achieve? Impact: Impact: Impact: Staff Customer Community Environment Staff Customer Community Environment Staff Customer Community Environment Label: Label: Label: KEY RESULTS/ DELIVERABLES Description Description Description What MUST my team (or I) deliver to achieve the objective? Impact: Impact: Impact: Staff Customer Community Environment Staff Customer Community Environment Staff Customer Community Environment Label: Label: Label: What are the critical milestones we must hit? Description Description Description What are the leading metrics that need to be achieved? Impact: Impact: Impact: Staff Customer Community Environment Staff Customer Community Environment Staff Customer Community Environment

Quarterly Company Objectives Q2 Q4 Our main company objective set for Quarter One is to Increase recurring revenues by 30%. Our company objective for Quarter Three is to raise $2m for our growth needs. Our company objective for Quarter Two is to launch version 2 of one of our main products. Our objective for Quarter Four is to achieve revenue by 50% and profitability by 30%. Q1 Q3

KRs for Quarterly Objectives 50% Increase revenue Q1 KRs Q2 KRs Q3 KRs Q4 KRs Increase annual renewals to 75% Email and phone outreach to 100 VCs and seed funds Get over 10000 new signups Hit quarterly revenue of $450k Reduce churn to less than 5%/month Achieve signup to % trial ratio of 45% Get at least 30 second contact meetings or calls Increase gross profit margin from 30% to 39% Reach monthly recurring revenue of 100k Achieve trial to % paid ratio of over 50% Solicit 3 term sheets of our minimum required terms Start sales in 2 new domestic markets Get published product reviews in over 15 publications Decrease one-time contracts sold by 15% Close an investment round with $2m pre-money Increase referral rate by 15%

Company Level Quarterly Objective: Increase the competitive strength of our product Marketing Team OKR Product Team OKR Sales Team OKR Leverage social proof to increase credibility Increase engagement in our product Personalize sales approach to nurture potential customers Get at least 15,000 views on our testimonials page Increase average session duration from 10min to 25min Increase the trial to paid conversion Reach an average CTR of 20% in the communication campaign Analyze competitor s offering and implement top 3 improvement ideas Increase follow up email open rate from 14% to 45% Increase the number of shares on LinkedIn from 30 to 1000 Increase average daily activity per user by 12% Reach 8/10 average score on customer satisfaction survey with at least 100 responses. Reduce an average acquisition cost per customer from $100 to $20

Team OKR FORMULA: We will (objective) as measured by (this set of key results) 30% 40% 85% 61% + + = KEY RESULT OBJECTIVE KEY RESULT KEY RESULT Make sure at least 50% of signups Have all salespeople listen in to Create a best practices sales Increase the quality of our % called back in first 24 hours at least 10 product demos of process document with minimum sales approach other team members allowed service levels

Departmental OKR Progress 100% 80% 75% 55% 55% 50% 30% 30% 25% 20% 0% Sales Engineering Marketing Finance Operations Management

Departmental OKR Progress Improve The Nurturing Process for New Leads 90% KR Improve The Nurturing Process for New Leads KR 70% Increase the Trial to Paid conversions from 5% to 14% 30% KR Improve The Nurturing Process for New Leads 63%

OKR Table Total Fulfillment of Objectives = 35.6% Progress Objective 1 Objective Fulfillment Key Results 1 20% 21.7% Key Results 1 10% Key Results 1 35% Progress Objective 2 Objective Fulfillment Key Results 1 20% 61.7% Key Results 1 10% Key Results 1 45% Progress Objective 3 Objective Fulfillment Key Results 1 50% 23.3% Key Results 1 61% Key Results 1 35%

OKR Table INTERIM VALUE 1 INTERIM VALUE 2 END OF QUARTER DEPARTMENT LEADER OBJECTIVE KEY RESULT TARGET VALUE CURRENT VALUE Achieve fiscal sustainability Positive net income 100% 100% 72.72% Management CEO $11,000 $8000 Sustainable growth of sales channels 500 leads from newsletter 65% 100% 86.6% Marketing Ms. Miller 500 433 100% 100% 100% Sales Mr. Peters Growth Double revenue $150,000 $149000 Become a leaner Company Save 10% on overhead costs 23% 35% 64% Finance Mr. Becker $5000 $3200 100% 100% 66% HR Mrs. Sanchez Recruit Engineers Recruited 3 2

OKR Sheet This OKR Sheet is for: Team XYZ DESCRIPTION OWNER PROGRESS Name OBJ A Your objective here 35% 1 Your key result here Name 10% KR 2 Your key result here Name 20% 3 Your key result here Name 40% Name OBJ B Your objective here 35% 1 Your key result here Name 10% KR 2 Your key result here Name 20% 3 Your key result here Name 40% Name OBJ C Your objective here 35% 1 Your key result here Name 10% KR 2 Your key result here Name 20% 3 Your key result here Name 40% OVERALL 35%

OKR Review LEAD AGENDA ITEM TIME CEO/Leader Setting the Stage Strategic Priority #1 Objective #1 (objective owner reports as follows) 2 mins per objective Overall progress of the objective Objective Owners Progress for each key result & next quarter commitments. 80% forward looking - What was achieved and why? What was not achieved and why? 20% backward looking - What is the focus for upcoming quarter & specific targets/deliverables? ***Repeat for Each Objective. Strategic Priority #2-X Objective Owners ***Repeat for each priority as noted above Strategic Topic Deep Dive Topic Owner 30 minutes (time permitting) Use this time for specific topics that have potential implications on shifting your strategy. Evaluation What did we learn from our implementation last quarter? CEO/Leader 5 minutes What changes/ adaptions will we make to our plan? Recap company-wide goals/OKRs

OKR Grading Scale Scoreboard Overall Score = 0.7 ID DESCRIPTION OUTCOME OWNER NOTES OKR SCORE OBJ-1 INCREASED SALES OBJECTIVE FINAL SCORE 0.5 KR-1 Reach a 25% conversion rate on all leads Reached 15% 0.6 KR-2 Reduce time spent in the sale cycle by 20% Reduced by 8% 0.3 KR-3 Open 5 new stores Opened 4 0.7 OBJ-1 INCREASED SALES OBJECTIVE FINAL SCORE 0.8 KR-1 Reach a 25% conversion rate on all leads Reached 15% 1.0 KR-2 Reduce time spent in the sale cycle by 20% Reduced by 8% 0.6 KR-3 Open 5 new stores Opened 4 0.7 OBJ-1 INCREASED SALES OBJECTIVE FINAL SCORE 0.5 KR-1 Reach a 25% conversion rate on all leads Reached 15% 0.6 KR-2 Reduce time spent in the sale cycle by 20% Reduced by 8% 0.3 KR-3 Open 5 new stores Opened 4 0.7

OKR Dashboard Objective Status Company OKR s Team OKR s 100 100 52% at or above target 22% Below Plan 26 50 50 18% caution 8% No Status 0 0 Jan Feb Mar Apr May Jun Jan Feb Mar Apr May Jun Sales Team OKR Objective Completion Rate 82% Renewal Rate in Q3 Dustin 61% Jeffrey 18% 75% Renewal Rate in Q3 Maria 79% Russell 84% 64% Renewal Rate in Q3 Ralph 12%

Performance Dashboard Time Left in Q1 Team A Average Our Team Average 01 02 18 19 & Team C Average MONTHS DAYS 03 20 Team D Average EMPLOYEE NAME OPERATIONAL KR PROGRESS ASPIRATIONAL KR PROGRESS ON TRACK Y Bob Smith Bob Smith s KR for Q1 is this Bob Smith s KR for Q1 is this 72% 61% N John Smith John Smith s KR for Q1 is this John Smith s KR for Q1 is this 72% 61% N Joe Smith Joe Smith s KR for Q1 is this Joe Smith s KR for Q1 is this 72% 61% N Tom Smith Tom Smith s KR for Q1 is this Tom Smith s KR for Q1 is this 72% 61% Y Dan Smith Dan Smith s KR for Q1 is this Dan Smith s KR for Q1 is this 72% 61%

OKR Dashboard People Priority Status Results / 1 Timeline Team Objective 1: Raise Revenues by 25% 1 Jan 27 - Feb 8 Marketing High Achieve 100% year-to-year sales growth Janet Done Janet 1 Mar 20 Mar 27 Marketing Medium Reduce churn to less than 5% annually (via Customer Success) Done Janet 0 Jan 31 - Feb 1 Marketing Medium Increase the company average deal size by 30% (with upsells) Stuck Objective 2: Grow The Company 2X Bigger Jason Low 1 Jan 31 - Feb 1 Operations Speed up hiring process without compromising quality of staff Done Jason 1 Mar 28 - Mar 29 Operations High Hire 80 employees by end of the year Done Jason 0 Mar 14 Mar 21 Operations Medium Hire a new Marketing VP by April Moved to Q2 Objective 3: Become a Socially Responsible Organization Joyce 0 Dec 19 Dec 29 Distribution Medium Release educational engineering blog Moved to Q2 Joyce Low 0.5 Dec 31 Jan 1 Distribution Volunteer in the tree-planting event Working on It Joyce 0 Dec 19 Jan 3 Distribution Medium Summer internship program Stuck Objective 4: Build a Great Corporate Culture Jan 1 Jan 13 Jan 31 Management High Achieve a weekly Employee Satisfaction / Pulse Score of 8+ Done Jan 0.8 Jan 6 Mar 6 Management Medium Launch 2-way closed-loop feedback process Working on it

Annual OKR Scoreboard Q1 Q2 Q1 OKR REVIEW Q2 OKR REVIEW MID Q1 TOTAL MID Q2 TOTAL ID DESCRIPTION TOTAL UNITS WEEKLY FINAL ID DESCRIPTION TOTAL UNITS WEEKLY FINAL QUARTER QUARTER OBJ-1 Objective 1 description 65 OBJ-1 Objective 1 description 42 KR-1 Key Result 1 description 5 0.0 0.9 0.6 1.0 KR-1 Key Result 1 description 20 0.5 0.4 0.6 1.0 KR-2 Key Result 2 description 10 0.1 0.7 1.0 1.0 KR-2 Key Result 2 description 2 0.1 0.2 0.3 0.2 KR-3 Key Result 3 description 20 0.7 0.3 0.6 0.5 KR-3 Key Result 3 description 4 0.4 0.5 0.6 0.5 KR-4 Key Result 4 description 30 0.0 0.0 0.0 0.0 KR-4 Key Result 4 description 16 0.5 0.0 0.5 1.0 Q3 Q4 Q3 OKR REVIEW Q4 OKR REVIEW MID Q3 MID Q4 TOTAL ID DESCRIPTION TOTAL UNITS WEEKLY FINAL ID DESCRIPTION TOTAL UNITS WEEKLY FINAL QUARTER TOTAL QUARTER OBJ-1 Objective 1 description 26 OBJ-1 Objective 1 description 100 KR-1 Key Result 1 description 8 0.1 0.6 0.6 KR-1 Key Result 1 description 40 0.8 0.6 0.4 0.6 1.0 KR-2 Key Result 2 description 7 KR-2 Key Result 2 description 30 0.5 0.4 0.6 1.0 1.0 1.0 1.0 1.0 KR-3 Key Result 3 description 6 0.7 0.9 0.9 KR-3 Key Result 3 description 20 0.7 0.0 0.6 0.4 1.0 KR-4 Key Result 4 description 5 0.2 0.4 0.6 0.4 KR-4 Key Result 4 description 10 0.0 0.5 0.0 0.2

OKR Roadmap MARCH APRIL MAY JUNE JULY Objective 1: Expand into new markets Key Result: Percentage of new business in new market increases by X% to Y% QoQ Redesigned Onboarding experience for 21% TBD: V2 Onboarding 21% Implementing new functionality 21% Expansion Campaigns for Existing industry 21% Key Result: Percentage of new business in new market increases by X% to Y% QoQ Redesigned Onboarding experience for 21% TBD: V2 Onboarding 21% Implementing new functionality 21% Objective 2: Strengthen Position as Industry leader for Key Result: Percentage of new business in new market increases by X% to Y% QoQ Redesigned Onboarding experience for 21% TBD: V2 Onboarding 21% Implementing new functionality 21% Expansion Campaigns for Existing industry 21% Key Result: Percentage of new business in new market increases by X% to Y% QoQ Redesigned Onboarding experience for 21% TBD: V2 Onboarding 21% Implementing new functionality 21%