How To Write Effective OKRs: A Practical OKR Template (2024) – Shopify

OKRs aren’t just for tech companies.

 “As a small business, you can’t afford to be distracted,” says Christina Wodtke, Stanford lecturer and author of Radical Focus. “OKRs provide a focus on the single most important thing that you should be doing right now.”

Here’s how you can leverage company objectives and measurable key results using a simple OKR template.

What is an OKR?

OKR stands for “objectives and key results.” It’s a goal-setting method for reaching qualitative business objectives by achieving quantitative key results. For example, you might have the objective “Get customers excited about our rebrand.” Your key results could then include improvements in metrics like click-through rate on new ads, increased share of voice on social media, and website traffic.

“The objective’s job is to get people jumping out of bed in the morning with excitement,” Christina writes in a blog post. “Key results take all that inspirational language and quantify it.”

History of OKRs

The history of the OKR methodology begins in the 1950s, with Peter F. Drucker, an Austrian professor of management at NYU. Peter wrote The Practice of Management (1954), “a guide for men in major management positions,” based on his experience consulting at General Motors. In his book, he introduced the concept of management by objectives (MBO), which he described as a practice for “converting objective needs into personal goals.” This would form the foundation of the OKR approach.

In 1983, then president of Intel Andrew Grove adapted the MBO philosophy for the Information Age in his book High Output Management, adding the concept of key results. “A manager’s objectives are supported by an appropriate set of key results,” Andrew writes in High Output Management. “His objectives are in turn tied to his supervisor’s objectives so that if the manager meets his objectives, the supervisor will meet his.”

In the late ’90s, John Doerr—venture capitalist, former Intel salesperson, and “Johnny Appleseed of OKRs”—introduced the concept of objectives and key results to Google, and from there it became increasingly popular in the tech world. In 2018, John published the book Measure What Matters. Inspired by what he learned from Grove at Intel, John further defined the OKR methodology. 

How to write OKRs

1. Start with a compelling objective
2. Break it into quantifiable results
3. Set up tracking

Writing OKRs isn’t complicated. Here’s how to do it:

1. Start with a compelling objective

Your objective is a one-sentence description of a time-bound goal. “Any business enterprise must build a true team and weld individual efforts into a common effort,” Peter F. Drucker wrote in The Practice of Management. “Business performance therefore requires that each job be directed towards the objectives of the whole business.”

A good objective will impact the entire organization but is actionable by just one team or individual. If you can’t achieve your desired outcome because you’re waiting for someone else to do something, you didn’t choose a good objective—choose something that’s within your control.

2. Break it into quantifiable results

A good objective is motivational, but not necessarily quantitative. The purpose of key results is to break down that objective into a handful of measurable outcomes (typically three, but you can use more or less depending on your needs).

“Your objective is supposed to be inspiring,” Christina says, “but the key results are what really define it.” On her blog, Christina recommends brainstorming OKRs by asking, “How would we know if we met our objective?”

This is where key results can start to look a lot like key performance indicators, or KPIs, because they use similar metrics, like revenue, average order value (AOV), customer lifetime value (CLV), and Net Promoter Score (NPS). The difference is that key results are paired with a qualitative objective.

3. Set up tracking

You’ve defined your objective and listed a few key results. Now what?

Christina recommends a twice-weekly cadence of check-ins she calls Monday commitments and Friday wins. Basically, every Monday, you check your team’s progress against OKRs and commit to tasks you will accomplish throughout the week. On Friday, you celebrate what your team was able to accomplish that week.

Shopify’s OKR tracking template can help you track progress toward team objectives visually. A team OKR template can be a great resource for checking progress between meetings or presenting to the whole team.

You don’t necessarily need to follow the Monday commitments and Friday wins framework, but you should establish a way to track OKR progress and celebrate wins, especially if you’ve set ambitious goals. If you’re a solopreneur, an accountability partner can help hold you to your objectives.

“I started an accountability group with three other female entrepreneurs and we all send each other our weekly OKRs,” Christina says. “If you’re a company of one, going alone is just really hard. I think finding other people who are going on the journey with you is really critical to your mental health and your ability to stay with the project.”

An example of an effective OKR

According to Christina, a hypothetical US-based ecommerce store that wants to expand into Europe might use the following OKRs:

Objective: Germany is delighted by our product offering.

Key result: Sales of $500,000 in beta offering.

Key result: 25% of sales are repeat customers.

Key result: Returns are < 8%.

Here’s why it works:

• The objective is motivational. “Your objective is supposed to be inspiring. And of course, you want to delight people, you want people to fall in love with your product,” Christina says.

• The key results are measurable goals that define the objective. “Because we use the word ‘delighted’ in the objective, we need a way to measure delight,” Christina says. “Repeat customers is a great one, and then keeping returns down is not only important for your costs, it also suggests that people are happy.”