What types of companies should use OKR?

Key takeway: OKR will benefit almost any organization — irrespective of size, industry, or maturity. If your company is in need of more transparency, wants to drive innovation and/or growth, and wants to align teams toward common goals, then OKR might just be the tool you need. Keep in mind that implementing OKR might be easier or more difficult, depending on your organization's culture.

We frequently encounter the question: "Will OKR work in my organization?". The simple answer is: “Yes, it absolutely can.”

‍OKR (Objectives and Key Results) will benefit almost any organization, irrespective of its size, industry, or maturity. 

In this article, we’ll cover what types of companies can benefit from using OKRs and how each company type can use them. Let's dive into the details.

First off, what is OKR? 

OKR stands for Objectives and Key Results. It's a goal management framework that helps bridge the gap between ambition and reality via clear, measurable Objectives. 

The "Objective" in the OKR framework describes what you want to achieve—typically a broad, inspirational goal that sets a clear direction and motivates teams. Each Objective is supported by multiple "Key Results," which are specific, quantifiable outcomes that indicate progress toward the Objective. These Key Results are the metrics, targets, or milestones that need to be accomplished to achieve the set Objective.

The OKR framework serves multiple purposes: 

• It enhances strategic alignment by ensuring everyone in the organization understands and works towards common goals
• It boosts transparency by making Objectives and progress open and visible to all
• And, it fosters focused execution by prioritizing work that has the highest business impact 

Unlike traditional goal-setting methods, OKRs encourage setting ambitious, stretch goals that push the boundaries of what teams are capable of achieving. This is done while keeping the outcomes realistic enough to be attainable, ensuring that efforts are always moving the organization forward. 

By combining inspirational Objectives with measurable Key Results, OKRs enable organizations to synchronize their efforts, track progress, and continuously course correct to improve their strategies, making it a powerful tool for driving organizational growth and innovation.

Why you should consider using OKR 

OKRs are a great choice for any organization looking to introduce clarity and purpose-driven work. Doing so can greatly enhance your business’s performance and alignment: 

1. Strategic alignment and focus: OKRs help align individual and team efforts with the company’s overarching strategy. By clearly defining Objectives and Key Results, everyone knows what is most important, ensuring that resources are focused on high-impact activities.
2. Transparency and accountability: By making goals and progress visible to the entire organization, OKRs foster a culture of transparency and accountability. This visibility ensures that everyone understands their role in achieving company goals and feels responsible for their contributions.
3. Enhanced collaboration: OKRs encourage cross-functional collaboration by clearly identifying mutual opportunities and defining shared Objectives and Key Results. This promotes teamwork and ensures that different departments are working together towards common goals.
4. Improved performance and motivation: The clear, ambitious targets set through OKRs motivate employees to perform at their best. The framework’s focus on measurable outcomes also provides a sense of accomplishment as Key Results are achieved, boosting overall morale and engagement.
5. Continuous improvement: OKRs are not static; they promote regular check-ins and revisions, fostering a culture of continuous improvement. This adaptive approach ensures that the organization remains agile and can adjust strategies as needed to meet changing business environments.

How OKR fits into different company types

Small companies (15-25 employees)

While smaller teams of 15-25 people may already have good visibility into ongoing activities, implementing OKRs can still provide significant benefits. By adopting OKRs, small companies can formalize their goal-setting process, ensuring everyone is aligned on top priorities and establishing clear metrics for success. 

This moves decision-making beyond intuition to a more data-driven approach. OKRs also encourage stretch goals that push the company to grow and innovate, while preparing for future scaling by establishing processes that will remain effective as the company expands. 

Implementing quarterly OKR cycles with monthly check-ins can help small companies maintain their agility while driving consistent growth and improvement. This structure allows teams to periodically step back, evaluate progress, and set focused goals for upcoming timeframes, ensuring they're always working on the most impactful priorities.

Medium to large companies (200-5,000+ employees)

Medium to large companies (200-5,000+ employees) can implement OKRs by establishing a dedicated OKR team to oversee the process and train department heads. These organizations should use OKR software to track and visualize goals across multiple levels, from C-suite to individual contributors. 

Companies of this size benefit from quarterly company-wide OKR reviews, supplemented by monthly departmental check-ins. 

To break down silos, larger firms can create cross-functional OKRs that require collaboration between departments. 

Some use cases: 

• HR departments can integrate OKRs into performance reviews, using them as a basis for discussing employee contributions and growth. 
• Leadership teams should limit company-wide OKRs to 3-5 per quarter, allowing departments to create supporting OKRs that directly tie to these top-level Objectives. 

This structure enables employees at all levels to see how their work contributes to organizational success.

Young companies (less than 5 years old)

Young companies under 5 years old can use OKRs to set aggressive monthly growth targets for key metrics like user acquisition, revenue, or market expansion. 

These firms should implement weekly OKR check-ins to rapidly iterate on strategies and tactics. 

Some use cases: 

• Startups can use OKRs to prioritize product development, aligning engineering efforts with specific user growth or retention goals. 
• For fundraising, OKRs can be set around investor outreach, pitch refinement, and achieving specific milestones to attract capital. 
• Young companies should also use OKRs to build their team, setting Objectives for hiring key roles and developing company culture. 
• To manage cash burn, finance-related OKRs can track the runway and set targets for extending it. 
• Founders can use OKRs to delegate responsibilities as the company grows, ensuring clear ownership of critical growth initiatives across the expanding team.

Established companies (10+ years old)

Established companies (10+ years old) can use OKRs to revitalize product lines by setting Objectives for developing new features or entering adjacent markets. These firms should implement cross-functional OKRs that pair R&D teams with marketing and sales to ensure innovations align with market demands. 

To combat organizational inertia, they can set OKRs focused on process improvement, aiming to reduce legacy system dependencies or streamline workflows. 

Some use cases: 

• Established companies should use OKRs to drive digital transformation initiatives, setting specific goals for adopting new technologies or shifting to digital-first strategies. 
• They can create innovation-focused OKRs that allocate resources to exploratory projects outside the core business. 
• To retain talent and prevent stagnation, HR departments can set OKRs around implementing continuous learning programs and increasing internal mobility. 
• Financial OKRs should balance maintaining core business profitability with investing in new growth areas.

How organizational culture affects OKR implementation

The organizational culture plays a crucial role in the successful adoption and implementation of OKRs. Different cultural aspects can either facilitate or hinder the OKR process. 

Here are key cultural elements to consider:

1. Transparency
   • Organizations with existing transparency practices will find OKR adoption smoother.
   • In less transparent cultures, gradual introduction of open goal-setting and progress-sharing may be necessary.
   • Leaders should model transparency by openly discussing their own OKRs and progress.
2. Ambition
   • Companies accustomed to stretch goals align well with OKRs' emphasis on ambitious targets.
   • In risk-averse cultures, education on the benefits of stretch goals and the "70% is success" principle is crucial.
   • Celebrate progress and learning from unmet goals to foster a growth mindset.
3. Accountability
   • Cultures that value personal and team accountability will adapt more easily to OKRs.
   • In organizations where accountability is less emphasized, clear ownership of OKRs and regular check-ins become critical.
   • Implement a system of constructive feedback and support for OKR progress.
4. Collaboration
   • OKRs thrive in collaborative environments where cross-functional teamwork is the norm.
   • In siloed organizations, use OKRs to encourage inter-departmental alignment and cooperation.
   • Implement shared OKRs to foster collaboration and break down organizational barriers.

Assessing whether your company would benefit

Before committing to OKRs, check if your company meets the following criteria. If most of these resonate with you, OKRs could be the right framework for driving your organization's growth and success.

1. Need for better alignment

• Are your teams struggling to align their daily work with the company’s long-term strategy?
• Is there a lack of clarity about what the company’s top priorities are?

2. Desire for enhanced transparency

• Do you want more visibility into goals and progress at every level of your organization?
• Is it difficult to track who is responsible for what in your current goal-setting process?

3. Focus on measurable progress

• Do you want to move beyond vague goals and create measurable, data-driven objectives?
• Is your current framework missing clear metrics for success?

4. Ambition for growth and innovation

• Are you aiming for aggressive growth or innovation, but unsure how to structure and track efforts?
• Do you want to push your teams with stretch goals that challenge their capabilities?

5. Need for agility in strategy

• Does your organization need a flexible goal-setting process that allows regular adjustments?
• Are you operating in a rapidly changing environment where priorities shift quickly?

6. Encouraging cross-departmental collaboration

• Do you want to break down silos and encourage more collaboration between departments?
• Are you looking for a way to drive mutual accountability across teams?

7. Focus on accountability and ownership

• Does your company struggle with follow-through on goals?
• Are you looking to foster a culture of accountability and ownership at both individual and team levels?

8. Commitment to continuous improvement

• Are you open to reviewing and refining your goals regularly to ensure ongoing progress?
• Do you want a system that promotes iterative learning and constant improvement?

If these points align with your organization’s needs, OKRs can offer the clarity, focus, and structure to help you reach your goals effectively.

How to manage OKRs

Getting started and managing OKRs can be daunting, however, dedicated software like Perdoo makes it a seamless process from the word “go”. 

With Perdoo, you start at the very top by defining your strategy using the Strategy map which provides a complete overview of your strategic choices and high level company goals that set the direction for the entire organization. You can set up KPI boards that ensure the goals everyone works on truly propel your growth. 

Set up and track your OKRs and KPIs and align them with your strategy to ensure all the work your people are doing moves the needle. By using custom reports and dashboards you can identify issues, make informed decisions, and course-correct where and when necessary. Use Check-ins to share wins, challenges, and progress with managers and co-workers. Regular Check-ins ensure you achieve more goals and set the stage for meaningful and productive 1:1 meetings. 

Perdoo offers a wealth of support articles and blog posts to help you get up and running successfully. And if you’re in need of hands-on tailored support, we offer coaching services as well. 

Ready to get started? Sign up for your free account here. 

To see what a Perdoo account could look like for you, log into our pre-populated demo account here. 

Finding the right fit

If you're unsure whether OKRs will be a good fit for your organization, consider these key questions:

1. Does your company need an added layer of transparency?
2. Are you trying to drive innovation or growth?
3. Do you want to align your team's efforts toward common goals?

If the answer to any of these questions is yes, then OKRs might just be the tool you need.