Some OKR enthusiasts have a very strict interpretation of cascading OKRs.
They expect a Key Result to become an Objective when it's assigned to someone else.
This approach is promoted in John Doerr's book called Measure What Matters and in Rick Klau's famous OKR video.
Some OKR software vendors also encourage this way of working but it doesn't take a scientist to understand
that this approach does not work. I'll explain why and will share an alternative approach that does work.
First, let's clarify the difference between Objectives and Key Results.
Objectives, Key Results, and Initiatives each serve a different purpose.
Hence they each have their own set of requirements.
For a more in-depth understanding of these requirements, you'll find a link to our Ultimate Guide to OKR in the description below.
Now back to the key differences:
Objectives tell you where to go.
An Objective is essentially a qualitative statement that describes the end state or the outcome you'd like to achieve.
They need to be concise and inspiring so that everyone remembers where they're heading.
For that reason, Objectives should not contain a metric.
Your people aren't going to remember that and quite frankly neither will it motivate them.
Leave it up to the Key Results to make the Objective specific and measurable.
On the other hand, Key Results will let you know if you're actually getting there.
They in fact kill two birds with one stone. Firstly, they specify what an Objective means.
In other words, qualitative Objectives can be a bit ambiguous so you need Key Results to quantify the Objectives and make it specific.
Imagine your Objective is to "Become one of the fastest-growing companies in your industry".
You could measure this in terms of Revenue, Number of customers, Number of employees, or multiple indicators at once.
Whatever you mean by "fastest-growing" the Key Results will then make that clear.
Secondly, Key results measure progress toward the Objective.
Key Results are as Andy Grove, the father of OKR, says "meant to pace a person to put a stopwatch in
his own hand so he can gauge his own performance".
What he meant is that Key Results define whether the Objective has been achieved or not.
In order to quantify an Objective or measure progress toward it, a Key Result must always contain a metric.
As Doerr's OKR formula goes, "I will (Objective) as measured by (Key Results)".
The word measure is encapsulated in the term metric.
The word metric is essentially derived from the Greek word "metron" which means measure or something used to measure.
Simply put the metric is what makes the Key Result measurable.
Virtually everyone, including John Doerr, seems to agree that a Key Result must always contain a metric.
When a Key Result contains a metric, you don't get to define the progress for the Key Result
yourself anymore, you simply rely on hard facts.
Only the current value of your metric can and will define progress for your Key Result.
It's the only fact you need.
Let's say you have an Objective to "Improve customer happiness".
A Key Result could then be to "Increase NPS from 30 to 50".
In this case, NPS, also known as Net Promoter Score, is your metric.
And you'd have to look at the current NPS score to see what the correct value is for your Key Result.
There are many things that you could do to increase NPS:
You could squash bugs in your product, hire extra support agents to bring down your response time, improve your product or service in response to customer feedback, and so on.
But doing these things won't automatically mean that your NPS will go up.
NPS will only go up if more of your users give you a high NPS score and become promoters.
Everyone agrees that Key Results drive progress for an Objective.
But now if I assign my Key Result for example, "Increase NPS from 30 to 50" to you and want it to become an Objective:
your Objective is now "Increase NPS from 30 to 50". It contains a metric — NPS and will automatically be measurable.
As we know it, that's incorrect.
If you decide to create Key Results for this Objective, these Key Results can't really drive progress for the Objective anymore.
When an Objective or a Key Result or any other goal for that matter contains a metric it's the metric itself that will define its progress.
On the other hand, you may now even be tempted to create output or activity-based Key Results for your Objective.
And this goes against the fundamentals of OKR, making it an almost futile exercise.
So at this point, we're stuck but don't sweat it. There is a solution!
Don't expect Key Results to turn into Objectives when assigned to someone else.
In fact, don't create Key Results at all.
Instead, create Sub-Objectives or also what we call Aligned Objectives and assign these to the corresponding team or person.
You can then create Key Results for these Sub-Objectives.
This is especially helpful for annual company Objectives since these are more thematic in nature,
it can be difficult to define Key Results for them.
Instead of basing their completion on Key Results, you can instead look at the overall progress of all of its Aligned Objectives.
If you're keen on learning how Aligned Objectives work in practice,
head over to the link provided in the description below.