OKR framework

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

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:

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.
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.
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.
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.
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.
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.

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.