OKRs in data-driven design
Unlocking outcomes with OKRs
What are OKRs?
OKRs (Objectives and Key Results) is a method designed to help organisations set and achieve strategic goals. Different from KPI-driven approaches, OKRs focus more on outcomes rather than outputs. This allows organizations to align their efforts toward delivering real value, adapting OKRs to fit the company culture and long-term goals.
Why OKRs matter
At their core, OKRs provide several key advantages that help teams move from just completing tasks to achieving meaningful results:
• Clarity of purpose: OKRs ensure that teams not only know what needs to be done but also understand why it’s important. This clear link between tasks and broader objectives gives everyone a sense of direction and helps prioritize work.
• Outcome over output: Instead of focusing solely on the amount of work completed (outputs), OKRs emphasize the impact or results of that work (outcomes). This shift encourages teams to measure success by the value they deliver, rather than just the activities they perform.
• Collaboration and alignment: OKRs foster a shared sense of responsibility and teamwork, ensuring that everyone works toward the same goals. When objectives are clearly defined, cross-functional collaboration becomes easier, and team efforts are more aligned.
Example: The risk of focusing on output
Let’s say your output is,:
I want to increase the number of customers from 500 to 1,000.
You achieve that goal, but because the focus was purely on the number, you could end up with:
• High acquisition costs: By focusing only on acquiring more customers, you might have spent too much on marketing campaigns, discounts, or other incentives, leading to unsustainable acquisition costs.
• Low-quality customers: The new customers might not be the right fit for your product, leading to low engagement or high churn rates, because the quality of the customers wasn’t considered.
• Negative experiences: Without improving the customer experience or onboarding, you might gain 1,000 customers but end up with poor satisfaction scores or a rise in customer complaints, damaging your brand in the long run.
How OKRs relate to KPIs or metrics
OKRs (Objectives and Key Results) often incorporate KPIs or metrics in the Key Results (KR) part. The Key Results are specific, measurable outcomes that track progress toward achieving the Objective (O). These results frequently rely on quantitative metrics like KPIs (Key Performance Indicators) to measure success. The key difference is that the Objective (O) is qualitative, describing what you want to achieve, while the Key Results (KR) are quantitative, outlining the specific metrics or numbers that indicate you’ve achieved the objective.
For example:
• Objective: Improve customer satisfaction to drive long-term loyalty.
• Key Result 1 (with KPI): Increase the Net Promoter Score (NPS) from 50 to 70.
• Key Result 2 (with KPI): Reduce customer support response time from 24 hours to 12 hours.
In this way, the KR part of an OKR contains clear, measurable targets (often KPIs) that help assess whether the objective is being met.
A better approach: Outcome-focused OKR
Objective: Increase the number of high-quality, engaged customers to drive sustainable growth.
Key Results:
1. Increase new sign-ups from 500 to 1,000 while maintaining a 90% customer satisfaction score.
2. Reduce customer acquisition cost by 10% through targeted marketing.
3. Increase customer retention from 70% to 85% by improving onboarding and support processes.
By focusing on outcomes, this OKR ensures that the growth in customers is both sustainable and beneficial for the business, leading to better decisions and long-term success.
OKR — The secret recipe
Objective:
[Verb] + [specific outcome desired] + in order to + [broader impact or benefit].
Key Result:
[Verb] + [specific action or metric to achieve] + from + [X] + to + [Y].
Common verb helper for OKRs:
Increase — to grow numerical values or expand capacity.
Reduce — to decrease numbers, frequencies, or inefficiencies.
Improve — to enhance quality, performance, or satisfaction.
Develop — to build or refine systems, skills, or resources.
Implement — to start or establish new processes or technologies.
Experimenting with the OKR recipe to create the perfect meal
Let's try out the recipe by exemplifying something more ordinary mundane in culinary experience. I'm a dad and I often cook for my kids and my family in generally and I think I want to understand the secret behind flavours so let's go through the recipe to create a great, first we need a verb so let's take develop we want to develop our skills. The specific outcome is: to master the art of flavours + in order to + and now comes the broader impact or the benefit to me as a dad and that is to be more creative and to spread joy, it could also be like — you to make the children eat the food.
Objective:
Develop a relaxed cooking style by mastering the art of flavours balancing and ingredient replacements in order to improve the enjoyment and appeal of my meals.
- [Verb]: Develop
- [Specific outcome desired]: a relaxed cooking style by mastering the art of flavor balancing and ingredient substitution
- In order to: (this phrase acts as a bridge connecting outcome to the impact)
- [Broader impact or benefit]: enhance the enjoyment and appeal of my meals
Key Result 1:
Replace key ingredients in dishes, and increase the number of dishes with adjusted acidic, sweet, or salty components from 0 to 15 by the end of the quarter. (Improve ability to adapt recipes creatively and confidently. Mastering art of flavours)
Key Result 2:
Expand your cooking by learning to prepare dishes from up to 10 different cuisines by the end of the quarter. (crucial for a relaxed cooking style.)
Key Result 3:
Host bi-weekly tasting sessions to gather feedback on the relaxed and enjoyable nature of meals, aiming to improve the positive feedback rate from 0% to 80% of dishes prepared by the end of the quarter. (reflects the effectiveness of the relaxed and adaptable cooking style in making meals that people love)
OKRs in Data-Driven Design
When integrated into data-driven design, OKRs provide clear direction and a structured approach to achieving better outcomes.
OKRs have a transformative power to create alignment and autonomy in organisations. When mapping the customer journey before during and after using the service, it is powerful to apply OKRs at each stage of the journey, where different teams can align and focus their effort to improv e customer experience. Then it gets easier to measure tangible results together, and reaching the objectives.
For instance, imagine your business aims to increase revenue from $15 million to $20 million. An OKR could be set to enhance the customer purchase experience, with key results like increasing the signup rates or improving service quality. Well-defined OKRs ensure that everyone -from leadership to front-line employees - understands and aligns with the goals, fostering a culture that prioritizes customer satisfaction and brand strength.
Conclusion
By establishing and aligning on OKRs as a team throughout the organisation, you ensure everyone is on the same page, understanding not just the what, but the why behind every action. This alignment is crucial for avoiding pitfalls and truly embracing a culture that values customer satisfaction and loyalty as the real indicators of success. Implementing OKRs effectively requires a thoughtful approach that considers the unique dynamics and culture of each organisation.
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