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Bill Gelbaugh

Crafting Great OKRs Part Two


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Stock Image of happy group of people using sticky notes on glass board for planning OKRs.
Photo Courtesy of Adobe Stock: OKR3-1-AdobeStock_275135207

In our previous post, we discussed the characteristics and tips for creating effective OKRs. Now, it’s time to dive into the actual process of crafting OKRs that can drive your business forward. This post will guide you through each step, from creating and refining OKRs to aligning them across your organization and finalizing them for action.

The Process to Create Great OKRs

Create

The first step in crafting OKRs is to start small. Rather than using a large brainstorming group, which can lead to chaos and diluted focus, we recommend forming a very small team—just two or three people. This small group can dedicate the deep, time-consuming concentration needed to draft a set of OKRs that truly address your business challenges.

These small teams are tasked with tackling specific business problems and discovering creative solutions. They need the bandwidth to immerse themselves in the details—analyzing your competitive environment, scrutinizing your strategy, and identifying your core capabilities. These elements are the raw materials that lead to effective OKRs, and they must be carefully considered.

Whether you’re working at the corporate level or within a team, your small group should aim to document two to three objectives, each with one to three key results. These should be set at a stretch level—the 1.0 scoring level—to inspire high performance. (To be explained in detail later.)

Refine

Once your small team has drafted the initial set of OKRs, it’s time to bring them to a wider audience for review. Before your first full team meeting or workshop, share the draft OKRs with the relevant leadership group. If you’re working on corporate-level OKRs, this will involve the senior leadership team. For team-level OKRs, the team’s leadership group will need to be involved.

The purpose of this session is to critically examine the draft OKRs. The small team should explain their choices, and there should be vigorous debate to ensure that the OKRs are aligned with the broader goals of the organization. The objective is to reach a consensus on the OKRs that will guide your efforts for the upcoming quarter.

Align

In today’s business environment, much of the work is cross-functional, with teams collaborating to solve problems and create new ways of working. When crafting OKRs at the team level, it’s crucial to keep this context in mind.

After you have refined the OKRs, it’s time to take them on a “road trip” around the organization. This involves discussing your draft OKRs with other team leads, especially those on whom you depend or who depend on you. This step is all about ensuring alignment across teams, so everyone is working towards the same goals.

For instance, if one of your key results is highly dependent on another team’s assistance, you’ll want to ensure they acknowledge this dependency and pledge their support. Similarly, you’ll want to understand how your team can support other teams in achieving their OKRs.

Finalize

Once the alignment process is complete, it’s time to finalize your OKRs. If you’re working at the team level, the team lead and partners should meet with their superior—likely a member of the senior executive team—to get final approval for the OKRs.

Transmit

The final step in the crafting process involves two key tasks. First, you need to load your OKRs into a software system or a tracking tool such as Google Sheets or Excel. This is a simple but vital process. OKRs must be rigorously and formally cataloged to maintain the integrity of the entire OKR process.

Second, you need to communicate the OKRs to your team and beyond. We strongly recommend sharing them widely using a variety of media. An in-person meeting, such as an all-hands or town hall style gathering, is particularly effective. This provides an opportunity for employees who weren’t directly involved in the OKR creation process to ask questions and gain a deeper understanding of the decisions made.

The OKR Crafting Process

OKR Football Example

How Many OKRs Should We Have?

The late screenwriter Nora Ephron, famous for writing classics like When Harry Met Sally, Sleepless in Seattle, and Silkwood, had a remarkable talent for capturing the essence of a story. But before she became a Hollywood legend, Ephron was a journalist. She often credited her high school Journalism 101 teacher, Charlie Simms, with teaching her the most valuable lesson she ever learned about storytelling.

On the first day of class at Beverly Hills High School, Simms introduced his students to the concept of a “lead”—the opening sentence that captures the most critical elements of a news story. He explained that a good lead answers the who, what, when, and where. To drive the point home, he gave the class their first assignment: write the lead to a story based on the following facts:

Kenneth L. Peters, the principal of Beverly Hills High School, announced today that the entire high school faculty will travel to Sacramento next Thursday for a colloquium on new school methods. Among the speakers will be anthropologist Margaret Mead, college president Dr. Robert Maynard Hutchins, and California Governor Edmund “Pat” Brown.

The students furiously hammered away on their typewriters, each trying to craft a concise lead that summarized the who, what, when, and where. Their leads were variations of: “Margaret Mead, Maynard Hutchins, and Governor Brown will address the faculty on…” or “Next Thursday, the high school faculty will…”

When they finished, Simms reviewed their leads and set them aside. Then he told them they were all wrong. “The lead,” he said, “is ‘There will be no school Thursday!'”

In that moment, Ephron realized that journalism—and storytelling in general—wasn’t just about regurgitating facts. It was about figuring out what really mattered, cutting through the noise to find the point that resonated most.

Ephron would later say that this lesson worked as well in life as it did in journalism. And, as it turns out, it works great for OKRs too.

When you gather with your team to decide on your OKRs, you’re faced with a universe of possibilities. Customer concerns, shareholder interests, employee needs, competitive pressures—the list is endless. These are the organizational equivalent of the “who, what, when, and where.” Your challenge is to cut through the clutter and identify what is most important, what will have the most impact right now—essentially, the “lead” of your business story.

Woman giving thumbs up, holding a sign that says "Less is More."
Courtesy of Adobe Stock (edited in Canva Pro): OKR3-2-AdobeStock_295108345

So, how many OKRs should you have? We recommend following the principle of “less is more.” There is a significant opportunity cost to increasing your inventory of OKRs—namely, a lack of clarity and focus around what the company’s true priorities are. When you begin your OKR process, we suggest generating a small number—a handful at most—of objectives that are crucial to executing your strategy for the year. Then, as the year progresses, adjust your tactical objectives each quarter to keep moving those strategic objectives forward.

Next up… Driving OKR Alignment.

Bill Gelbaugh

Bill Gelbaugh is one of our Senior Partners here at Outhouse and champions our OKR efforts.

Let’s Get Moving! Election Results, the Dow is up, and What’s Next for Production Homebuilding?


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Introduction

Hello! I’m Bill Gelbaugh, one of the Partners here at Outhouse, LLC. This morning, as I wrapped up our Sales and Finance meetings, one message came through loud and clear: It’s time to move forward! The election is behind us, the Dow is up, and there’s a sense of renewed energy in the air. Now that we have more political clarity, the focus is shifting toward what’s next—and that’s especially important for us in the production homebuilding market.

With the recent boost in market optimism, now is a great time to look at how the industry can leverage this momentum. In this post, I’ll dive into what we can expect for the production homebuilding sector in the coming months, how post-election shifts might impact our industry, and why we believe now is the time to act decisively. So, let’s dig in and see where the opportunities lie.

A symbolic growth graph against a breathtaking sunset, representing economic success and growth in a beautiful natural setting.
Image Courtesy of Adobe Stock

Post-Election Economic Climate and Market Optimism

Historically, election outcomes tend to influence market sentiment—and the initial post-election reactions often set the tone for the months ahead. With the recent election behind us, we’re already seeing an upward tick in the Dow and other major indices. This surge reflects a sense of renewed investor confidence, as markets generally react favorably to political stability and clarity. For those of us in homebuilding, this optimism in the financial markets is a promising indicator that demand and capital may flow more steadily in our direction.

Beyond market indices, the now decided political environment can bring some welcomed consistency to economic policies impacting homebuilding, from mortgage rates to tax incentives for residential construction. With clear policy paths, businesses are more likely to invest and make bold moves, something that could directly benefit production homebuilders and our clients. This is a window of opportunity to embrace a proactive approach and align ourselves with the positive momentum shaping the market.

New Homes Under Construction
Image Courtesy of Adobe Stock

Implications for the Production Homebuilding Market

With the election wrapped up and market signals leaning positive, the production homebuilding market has an opportunity to gain ground. Here are a few key areas where the recent changes and optimism may impact our sector directly:

  1. Interest Rates and Financing
    A critical factor for both builders and buyers is access to financing, and with the market’s optimism, there may be greater stability in interest rates moving forward. If the Federal Reserve maintains a balanced approach, mortgage rates could stay at manageable levels, encouraging prospective buyers to make their move. For builders, favorable interest rates can mean better loan conditions and a greater willingness among lenders to fund new projects—particularly in areas experiencing housing shortages.
  2. Housing Demand and Policy Initiatives
    The election outcome could influence policies that either directly or indirectly affect the homebuilding industry. For instance, any new measures to support affordable housing initiatives or incentives for new construction could stimulate demand and support the overall growth of the sector. With policy stability, builders can better anticipate regulatory requirements and plan their projects accordingly, which is key to keeping up with buyer demand.
  3. Investor Confidence and Capital Availability
    As the Dow rallies, investors tend to gain confidence in placing their funds in high-demand sectors, and housing continues to be one of them. Real estate often sees capital flow when the market trends upward, meaning developers might find more opportunities to attract investors or partners. With growing interest from both individual and institutional investors, the production homebuilding sector is positioned to secure the capital needed to meet demand and scale up production.
  4. Consumer Confidence Through Enhanced Buyer Experiences
    In today’s market, homebuyers seek a visually immersive, engaging buying experience. Outhouse, LLC meets this need by offering Brilliance Award-winning, cutting-edge interactive floor plans and advanced product visualization tools that allow buyers to envision their future homes in vivid detail. With customizable interactive floor plans, buyers can explore design options, experiment with layouts, and personalize features, fostering a hands-on, immersive experience that builds excitement and confidence in their investment.
    Beyond digital solutions, professional printing and display services ensure impactful, high-quality visual materials for model homes, sales centers, and signage, enhancing every stage of the buying journey. By integrating Outhouse’s innovative visualization and display solutions, builders can elevate brand presence, attract discerning buyers, and deliver a seamless, tech-forward experience from first look to final sale.
  5. Integrating Technology in Construction for Faster, Cost-Effective Builds
    As the housing market gains momentum, now is an ideal time for builders to invest in innovative construction technologies. Advanced methods like modular construction and 3D-printed components can help address labor shortages, accelerate project timelines, and manage costs—all key factors for meeting today’s growing housing demand. To scale efficiently, builders need to integrate cutting-edge technology into their processes, making tech-driven project marketing and sales essential.
    Outhouse, LLC supports builders with high-quality drafting, rendering, and visualization services that offer precise, visually compelling representations of projects. These detailed renderings enable builders to present homes in the best light, capturing buyer interest and building trust.
    Overall, the production homebuilding industry is positioned to thrive in this period of optimism and opportunity. With clearer policy direction and market momentum post-election, builders can confidently move forward to meet strong housing demands nationwide.
Close-up of a clock face with 'NOW OR NEVER' slogan emphasizing urgency and the importance of timely action in a high-stakes moment
Image Courtesy of Adobe Stock

Conclusion: Let’s Get Moving—The Time is Now!

With the election behind us and positive market signals on the rise, there’s no better time for production homebuilders to take decisive steps forward. The stability we’re seeing now creates a window of opportunity to expand, innovate, and meet the growing demand in residential construction. By capitalizing on market optimism and embracing the right tools, builders can stay competitive and create lasting value for clients.

At Outhouse, LLC, we’re here to support this vision. Our industry-leading drafting and rendering services, award-winning interactive floor plans, product visualizations, and top-notch printing and displays make it easy for builders to deliver a polished, immersive buyer experience. With our solutions, you can showcase projects in their best light, connect with clients effectively, and set a high standard for quality and professionalism.

So, let’s get moving! The time is ripe to elevate your home building projects, and we’re ready to partner with you every step of the way. Reach out to us today to see how our technology and services can help you maximize this moment—and build a brighter future for your business.

Bill Gelbaugh

Bill Gelbaugh is one of our Senior Partners here at Outhouse and champions our OKR efforts.

Crafting Great OKRs Part One


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Part 3 of our Unlocking Outhouse’s Potential with OKRs series

In our journey so far, we’ve explored why OKRs are valuable and how to prepare your organization for this powerful framework. Now, it’s time to roll up our sleeves and dive into the art of crafting OKRs that truly drive results. In this post, we’ll focus on what makes for an effective Objective and Key Result, ensuring they align with your company’s broader goals.

Characteristics of Effective Objectives

An Objective is a concise statement that outlines a broad, qualitative goal designed to propel your organization forward. For those new to OKRs, the challenge often lies in understanding what makes a good Objective. Let’s break it down:

Inspirational

A well-crafted Objective is more than just a collection of words describing a business goal. It should compel your team to strive for a higher standard of performance. The power of an Objective lies in its ability to challenge your team to think differently. For example, instead of aiming for a modest 10% improvement, an Objective that pushes for a 50% increase will force your team to solve tough problems and rethink their approach. That’s the essence of what OKRs are meant to achieve.

Qualitative

Objectives should represent what you hope to accomplish, expressed in words rather than numbers. While numbers are crucial, they belong in your Key Results. The Objective is about setting the direction and the ambition, not the metrics.

Attainable

Striking the right balance between inspiration and reality is crucial when crafting Objectives. While it’s important to push the limits of what your team believes is possible, you also need to be realistic. Encouraging your team to stretch their imaginations is key but remember that every Objective should still be within reach with the right effort.

Doable in a Quarter

Assuming you’re setting Objectives on a quarterly basis, they need to be achievable within that three-month period. If your team suspects that an Objective will take a year to accomplish, then it’s probably closer to a strategy or vision than a quarterly goal.

Controllable by the Team

Whoever drafts the Objective, whether it’s at the corporate, department, team, or individual level, must be able to control the outcome. If your Objective isn’t met by the end of the quarter, and your first thought is to blame external factors like “Sales didn’t deliver,” then you’re missing the spirit of OKRs. The Objective should be something your team can directly influence.

Provide Business Value

Your Objectives should be directly tied to your strategy and should create tangible value for the business if achieved. If there’s no clear business benefit at the end of the day, then it’s probably not worth the effort.

Tips for Creating Great Objectives

Avoid the Status Quo

When setting Objectives, aim to push the boundaries of what your team can achieve. Avoid Objectives that simply recite what you’re already doing, like “Maintain market share” or “Keep training employees.” If you can accomplish an Objective without changing how you work, it’s unlikely to drive significant progress.

Use Clarifying Questions

Sometimes, the best way to get to the heart of an Objective is by asking simple, clarifying questions. For example, if someone suggests that you should “Create value for our customers,” dig deeper. What do they mean by “value”? Are they referring to a specific segment of customers, or all customers? Escalating from abstractions to specifics will help you identify the true Objective that needs focus.

Frame Objectives in Positive Language

Your Objectives should be framed in a way that motivates and compels your team to take action. For instance, instead of saying “Reduce the amount of junk food I eat,” you might frame the Objective as “Eat more calories from healthy food.” The latter encourages proactive behavior and has a higher likelihood of success.

Start with a Verb

Every Objective should start with a strong action verb that drives the intended direction. Do you want to “maximize loyalty,” “build loyalty,” or “leverage loyalty”? The choice of verb shapes the actions that follow, so it’s essential to be deliberate in your wording.

Identify What’s Holding You Back

A powerful way to create meaningful Objectives is to identify the barriers that are preventing your team from executing your strategy effectively. What challenges are holding you back? Taking an unvarnished look at these obstacles can help you set Objectives that address critical issues and drive progress.

Use Plain Language

While it’s important to be precise, your Objectives should be written in plain language that everyone in the organization can understand. Avoid jargon and acronyms whenever possible, or if you must use them, ensure that everyone knows what they mean. Clear communication is key to ensuring everyone is aligned and understands the importance of the Objective.

Characteristics of Effective
Key Results

If Objectives set the direction, Key Results are the benchmarks that measure your progress along the way. They answer the question, “How will we know if we’ve met our Objective?” While it might seem straightforward, creating effective Key Results that accurately gauge progress can be challenging. Here’s what to keep in mind:

Challenging

Research has shown that setting high goals leads to better performance and greater satisfaction at work. When drafting Key Results, aim high. Challenge your team to push their limits and think differently. However, ensure that the goals are still within reach, so your team stays motivated to achieve them.

Measurable

Key Results should always be qualitative and measurable. Whether it’s a raw number, a dollar amount, or a percentage, your Key Results need to be tied to clear metrics. Progress should never be a matter of opinion—numbers provide the clarity needed to gauge success.

Specific

When writing Key Results, clarity is crucial. Ensure that everyone involved understands exactly what the Key Result means and what success looks like. This shared understanding prevents miscommunication and ensures that everyone is working towards the same goal.

Owned

Those responsible for delivering Key Results should be actively involved in their creation. When team members help shape the Key Results, they’re more likely to be committed to achieving them. Ownership drives accountability and engagement.

Progress-Based

According to Harvard Professor Teresa Amabile, the most important factor in boosting motivation and creativity is making progress in meaningful work. Your Key Results should reflect this principle, allowing your team to see and celebrate progress as they work towards the Objective.

Vertically and Horizontally Aligned

Your Key Results should align both vertically with your team’s broader goals and horizontally with the objectives of other teams. Regularly reviewing and sharing Key Results ensures alignment across the organization, fostering collaboration and coherence.

Drive the Right Behavior

The saying “You get what you measure” holds true. Once you focus on a specific metric, you’re naturally drawn to improving it. Think carefully about the behaviors each Key Result might encourage and ensure they align with your broader objectives.

Tips for Creating Key Results

Focus on the Key, Not All Results

This exercise isn’t about listing every possible outcome—it’s about identifying the most critical results that will drive progress on your Objective. Focus on what truly matters and avoid the temptation to track every potential action.

Describe Results, Not Tasks

Key Results should focus on outcomes, not activities. For example, “Add twenty-five qualified opportunities to the pipeline” is a Key Result, while “Email a prospect” is a task. The former measures progress, while the latter is just one step along the way. Focus on the results that signify true progress.

Use Positive Language

Just as with Objectives, framing your Key Results positively can have a powerful impact. For example, instead of “Lower error rate to 10%,” try “Increase accuracy to 90%.” The positive framing can boost motivation and commitment.

Keep Them Simple and Clear

While Key Results should be robust, they should also be easy to understand. Complexity can lead to confusion and misalignment, so keep your Key Results straightforward.

Assign an Owner

Key Results need a clear owner—someone who is accountable for their achievement. Without an owner, responsibility can become diffused, leading to inaction. Make sure someone is clearly responsible for driving each Key Result to completion.

By following these principles and tips, you’ll be well on your way to crafting OKRs that not only inspire your team but also drive meaningful progress. Remember, the power of OKRs lies in their ability to align your organization’s efforts, ensuring that everyone is working towards the same ambitious goals.

Next up… Crafting Great OKRs – Part 2.

Bill Gelbaugh

Bill Gelbaugh is one of our Senior Partners here at Outhouse and champions our OKR efforts.

Unlocking Outhouse’s Potential with OKRs 


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Courtesy of Adobe Stock By Kattika

2. Preparing for the OKR Journey 

In our first post, we explored why your company might want to adopt OKRs. Now, as we move forward, it’s time to focus on preparation. Just like building a home, laying a solid foundation is crucial before you start raising the walls. The same holds true for OKRs. A little preparation goes a long way in ensuring a successful implementation. And remember, OKRs are a journey, not a one-time event. 

This guide is tailored to help home builders, trade contractors, suppliers, architects, engineers, and others in the housing industry adapt OKRs to your unique company culture. Most of us don’t have a Silicon Valley mindset, so adaptation is key. However, there are some basic questions every company should address to get started on the right path: 

The Planning Phase 

Who Will Champion OKRs? 

Every successful OKR implementation starts with a passionate champion. This person, often a senior executive, must be deeply committed to rolling out the OKR strategy. Without this sponsorship, no initiative will survive. Who in your company has the drive and influence to lead this charge? Identify your champion, and make sure they have the backing they need to succeed. 

What Is the Most Critical First Step? 

Before diving into the nuts and bolts of OKRs, it’s essential to secure buy-in from your team. Everyone needs to be on board with the OKR program. This step isn’t just about understanding the framework, philosophy, and goals—it’s about fostering a collective commitment to the process. By the end of this series, you should feel confident in reviewing OKRs with your team and ready to get them excited about the journey ahead. 

What Matters Most? 

OKRs aren’t about doing everything; they’re about focusing on what’s most important. The beauty of OKRs lies in their ability to help you isolate the most critical business issues and dedicate your efforts to solving them. What are the fundamental priorities for your company right now? Your OKRs should zero in on these key areas, driving your business forward with purpose. 

How Will We Create Transparency? 

One of the greatest strengths of OKRs is their transparency. Ideally, OKRs should be visible throughout the organization, allowing everyone to see what’s being measured and provide feedback. This openness not only fuels collaboration but also ensures alignment and strategy execution across all levels of the company. 

How Will We Live Our OKRs? 

The real magic of OKRs comes from integrating them into the daily life of your company. They aren’t just set and forgotten—they should be part of your daily, weekly, and quarterly routines. From initial planning meetings to status updates and dashboards, OKRs need to be lived and breathed by your entire team. 

The Development Phase 

Once you’ve answered these foundational questions, it’s time to roll up your sleeves and start developing your first set of OKRs. Here’s how to approach this next phase: 

  1. Mission, Vision, and Strategy: Your OKRs should be deeply rooted in your company’s mission, vision, and strategy. These elements are the bedrock of your OKRs, driving the achievement of your long-term goals. Make sure they’re solid before moving forward. 
  2. Corporate-Level OKRs: Start at the top by creating OKRs at the corporate level. You might involve a small team, gather input from employees through surveys, or conduct executive interviews. However you approach it, the key is to ensure that these OKRs align with your broader strategy and are communicated clearly to the entire organization. 
  3. Presenting OKRs: Don’t just send out an email and call it a day. Use multiple channels to communicate your OKRs—share them electronically, post them on your intranet, and most importantly, discuss them in person. An all-hands meeting, for example, can be a great way to facilitate dialogue and ensure everyone understands the OKRs and the reasons behind them. 
  4. OKR Education: While OKRs are simple in theory, they require proper education to implement effectively. Take the time to educate your team not just on the fundamentals, but on why you’re choosing to use OKRs now, success stories from other firms, and what they can expect along the journey. 
  5. Monitoring OKRs: OKRs are not a “set it and forget it” tool. You need to monitor them regularly, using an OKR Scorecard and following a quarterly, monthly, or weekly schedule—whatever cadence works best for your organization. 
  6. Reporting Results: At the end of each quarter, score your OKRs and communicate the results across the organization. This isn’t just about accountability; it’s about learning and improving as you move forward. 
Courtesy of Adobe Stock By SakdaSong

The Strategy Alignment Phase 

OKRs should never exist in isolation—they need to reflect your company’s broader purpose, long-term goals, and strategy. Here’s how to ensure alignment: 

  • Company Mission: Your mission statement defines your core purpose—why your company exists. It’s your organization’s guiding light, constantly pursued but never fully achieved. Aligning your OKRs with this mission ensures that the work you do today contributes to your long-term purpose. 
    Your mission isn’t just a lofty ideal—it’s the compass that guides every decision your company makes. It reflects why your employees show up every day and serves as a reminder of the bigger picture, the greater good your company is striving to achieve. Whether it’s building homes that stand the test of time or creating communities where families thrive, your mission should be the foundation upon which your OKRs are built. 
    Unlike a vision or a strategy that may evolve over time, your mission remains a constant. It’s the steady north star that ensures every OKR you set is aligned with the core purpose of your organization. When your mission is clear and compelling, it’s much easier to steer the company in the right direction, keeping your OKRs in sync with the ultimate goal. 
  • Long-Term Vision: While your mission defines your company’s purpose, your vision paints a picture of where you want to be in the future. This vision is the bridge between your mission and your strategy—it’s the destination on the horizon that everyone in your organization is working toward. 
    Your vision statement should be a vivid, concrete picture of your desired future state, whether it’s five, ten, or fifteen years down the line. It’s not just about imagining a better tomorrow; it’s about providing a clear, tangible target that informs your strategy and your OKRs. Without this vision, your team might work hard, but without a clear direction, their efforts could be scattered and less impactful. 
    When your vision is well-defined, it fuels motivation and aligns your team’s efforts. Every OKR should serve as a stepping stone towards achieving this vision, ensuring that your short-term actions contribute to long-term success. It’s this alignment that transforms a collection of individual goals into a cohesive, strategic push towards a shared future. 
  • Annual Strategy: Your strategy is your game plan for achieving your vision. It’s about making tough decisions—choosing which markets to target, which customers to serve, and which opportunities to pursue or pass on. This is where the power of “No” becomes critical. Not every opportunity is worth chasing, and your strategy helps you focus on what matters most. 
    An effective strategy clarifies your priorities and sets the stage for your OKRs. It answers the critical questions: What are our preferred markets? Who are our optimal customers? What are their most pressing needs? By addressing these, your strategy guides the creation of OKRs that not only align with your vision but also address the real-world challenges and opportunities your company faces. 
    When your OKRs are directly tied to your annual strategy, they become a powerful tool for executing that strategy. They provide clarity, focus, and a roadmap for achieving your strategic goals, ensuring that every part of the organization is working in harmony towards the same objectives. 
    Finally, remember that a great strategy isn’t static—it evolves as your market changes, as new challenges arise, and as you learn from your successes and setbacks. Your OKRs should reflect this dynamism, allowing your company to remain agile and responsive while staying true to your mission and vision. 

Ready to start developing your OKRs? With a clear understanding of your most critical objectives and how to adapt OKRs to fit your company’s culture, you’re now ready to take action! 

Next up… Crafting Great OKRs – Part 1. 

Bill Gelbaugh Outhouse Senior Partner

Bill Gelbaugh is one of our Senior Partners here at Outhouse and champions our OKR efforts.

Managing Effectively With OKRs


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A five-part series: 1. Introducing OKRs, 2. Preparing for the OKR Journey, 3. Crafting Great OKRs, 4. Driving OKR Alignment, and 5. Managing Effectively with OKRs

Summarized by Bill Gelbaugh from: Objectives and Key Results by Paul R. Niven and Ben Lamorte, with additional material from Measure What Matters, Lattice OKR 101 and Perdoo.

Creating OKRs and not rapidly sharing and reviewing results is akin to hoping to win the lottery without going to the trouble of buying a ticket. You can’t “set and forget” goals and hope to achieve any of the OKR benefits we’ve been chronicling. The modern business offers countless distractions to divert your attention from what matters most—a hundred fires you can fight every day—but to execute successfully and take your performance to the next level, regular and disciplined reviews of OKR results must become part of your operating rhythm and cadence of your corporate culture.

WEEKLY MEETINGS

Our point of departure is Weekly Meetings. The purpose of the Weekly sessions is threefold: Assessing progress, identifying any potential issues before they blossom into significant problems, and, especially as you begin using OKRs, to ensure your team stays focused on what matters. Here are some topics you may wish to include:

Logistics: Start by simply determining who will be included in the meeting, what time will work best for everyone’s schedule, and where the meeting will be held.

Priorities: What are the key priorities, the things that must get done this week to inch closer to achieving your OKRs? As we alluded to above, it’s easy to get trapped in the whirlwind of pressing and urgent issues swirling about in any business, so ensure the priorities discussed are in fact leading to the achievement of your OKRs.

Status: During the Weekly Meeting, you can gauge the team’s current level of confidence. Has it ratcheted up? Gone down? Either way, the most important question is why. If you’re progressing as planned, you’ll want to put mechanisms in to stay there, but if the team feels momentum is sagging, perhaps it’s time to discuss how you can strategically shift resources to put things back on track.

Engagement: As we’ve noted several times, OKRs should challenge and stimulate people to engage in the breakthrough thinking necessary to reach unprecedented heights. Use the weekly session to gauge the team’s mood. Are they still actively engaged in the pursuit of objectives, or are they merely paying lip service with no real intention to invest the discretionary effort to target demands?

The Big Picture: Earlier we defined a health metric as something the company will frequently monitor because it is representative of successful execution of their strategy. Things should be getting better overall, well-designed OKRs should ultimately propel the success of your overall health metrics.

UPPER RIGHT | Each quarter set a bold, qualitative Objective and three quantitative Results.

The Objective is the inspiration for the quarter, and the Results are what happens if we do the right things. Weekly we look at them, and we ask, are we closer or farther from making these Results? We will start the quarter with each Key Result at fifty percent confidence, a 50/50 (0.5) shot at making it. So, each week, we have a conversation, and say, have we gone up or down? If we are dropping to 20% (0.2) from 80% (0.8), we want to know why. What changed? How are we going to address and improve this KR?

LOWER RIGHT | This is our “health metrics,” we can’t just stop paying attention to everything!

Here, in the lower right, we put “health metrics.” These are things we want to protect while we shoot for the moon up in the upper right. Let’s say we pick an Objective that’s about radical revenue growth. We’re trying to get as many new clients partnering with us as we can, right? Well, we don’t want to forget our current clients in the rush to get new ones. Rate current Customer Satisfaction: green, yellow or red.

UPPER LEFT | Here we write the initiatives we will do this week to advance the OKRs.

Here in the upper left, we write the three to five big initiatives we will do this week to affect the OKRs. We share them, so we can question if we are spending time on the things that will get us our Results. We don’t list everything we’re going do. We list the things that must happen, or we’re not going to make our Objectives. Life always gives you plenty to do. The secret is focusing on the things that matter!

LOWER LEFT | This is the “heads up” quadrant of important things for the next month.

Here in the lower left, is our “heads up.” It’s the pipeline of important things we expect to happen in the next month. That way Marketing, Sales, Operations, Admin don’t get caught flat-footed when something must be supported.

QUARTERLY REVIEWS

The time for sticking a finger in the wind or relying on subjective confidence levels to assess where you are has come to an end, and the moment has arrived to actually grade your performance at the end of the quarter. The two primary components of the review meeting are “what and how.”

The first component, the “what,” comprises the grades (scores) you assign for each of your key results. Based on performance during the quarter, each team (or individual should you connect that far into the organization) will determine their final score, and provide the rationale for that determination to their peers, colleagues, and superiors. This wide sharing of results is yet another benefit of OKRs, as it provides all teams the chance to learn more about their colleagues’ objectives, key results, triumphs, and challenges, what works, and what is ultimately possible when the entire organization is working in alignment. Assuming you’ve been rigorous in holding Weekly Meetings and also conducted a mid-quarter check-in, providing a final grade to OKRs should be a relatively simple, straightforward, process.

While the grades you assign are obviously important, what really stokes the flames of learning are the conversations spawned from a deep investigation of what occurred during the quarter.

The second component of the quarterly review meeting, the “how,” is what will ultimately drive the success of your OKRs program, and your organization’s ability to execute. While the grades you assign are obviously important, what really stokes the flames of learning are the conversations spawned from a deep investigation of what occurred during the quarter. The scores should serve as a launching point for intense discussions that challenge conventional views, unearth assumptions, and test a working hypothesis. In our experience, many organizations struggle with these meetings where candor and honesty should be the order of the day. Although some companies are able to engage in passionate discussions, leaving nothing on the table, the well-worn rules of civility hamper others from reaching a level where actual revelations are found.

Recent research into effective teams backs up this assertion by noting that the psychological safety of participants is a vital enabler of group success. What we are saying is that in order to make the best use of you OKR data (scores), you need to carefully think about how you’ll structure your meeting to ensure learning is maximized as your goal.

Updating OKRs at the End of a Quarter

The actual mechanics of OKRs creation are quite straightforward. At the beginning of each year, the company creates its highest-level set of OKRs. The exercise may include both strategic annual OKRs and more tactical quarterly OKRs. These high-level “corporate” OKRs provide the context for the connecting process we discussed in detail earlier, in which business unites, teams, and perhaps even individuals create their own OKRs which demonstrate their contribution to the overall strategy execution.

At the end of each quarter, OKRs are graded, and new OKRs are then developed throughout the organization. Some OKRs may remain the same for several quarters, especially those identified as particularly critical in light of current strategic or operational challenges. You may also carry forward any OKRs that you did not successfully achieve during the previous quarter, those whose success is of ongoing strategic importance. Any OKRs you did achieve will most likely be eliminated, updated with a new crop that once again stretches the team to deliver its very best.

SCORING THE RESULTS

1.0 Score is achieved!

An extremely ambitious outcome that may appear nearly impossible to achieve. This is where you begin; all key results should be written with a 1.0 goal in mind to foster breakthrough thinking. It may appear to be a shot for the moon if the company has never come close to attaining that level of performance in the past. As this is a stretch goal, if you achieve a 1.0 you may want to consider setting a higher bar next time.

0.6 – 0.7 Score is a success

This level represents progress that is difficult, but ultimately attainable, and what we hope at a minimum to achieve. It’s a lofty number well on the way to our stretch, but achievable based on past results.

0.3 Score is mediocre

We can phrase this the “business as usual” target level. It represents performance we can achieve with standard effort and little or no assistance from other teams. This is considered mediocre, what OKRs are designed to eliminate. If at the end of a quarter a team is only able to reach a 0.3 on a key result you will certainly want to ascertain why!

In our experience, those new to OKRs will tend to encounter one of two outcomes in their initial foray with the framework; either they will in fact have all ones, or at the opposite end of the spectrum, they’re left scratching their heads because, despite their Herculean efforts, their reports are littered with zeros. Eventually, after a few quarters (more or less; every organization is different) your key result grades should begin averaging close to 0.6 to 0.7. Anything higher perhaps your targets are not aggressive enough, meaning you’re unable to take full advantage of the talent and potential your teams have to offer.

In Conclusion

With this discussion on managing effectively with OKRs, our five-part series on Objectives and Key Results comes to a conclusion. Watch your email for the upcoming release of the entire series in a White Paper format. For any questions you may have, contact Bill Gelbaugh at bill.gelbaugh@outhouse.net.

Bill Gelbaugh is one of our Senior Partners here at Outhouse and champions our OKR efforts.