The OKR cycle is the heartbeat of high-performing teams, driving alignment, focus, and measurable outcomes. Whether you’re scaling a startup or fine-tuning a corporate strategy, mastering the OKR cycle, with company OKRs serving as a foundational element in the goal-setting process, can be the difference between hitting ambitious goals and missing the mark.
When Vikas Kapila, the SPCT at Enterprise Agility Consultancy was asked about the significance of OKRs, he explained that OKRs help leaders at all levels, whether in product teams or broader portfolios, focus on transparent collaboration and alignment across the teams that induce measurable transformation outcomes.
OKRs are also applied to measure leadership agility and ensure that an organization is agile and customer-centered from beginning to end within the transformation journey.
This blog breaks down the OKR cycle of setting bold objectives, then tracking progress, and ultimately refining results. What makes it feed into continuous improvement is just how well it helps turn your organization’s vision into reality.
Here is how such an OKR cycle can transform productivity in your team, besides keeping it on track for its goals.
What is an OKR cycle?
An OKR cycle comprises activities that help startups to set, track, and achieve objectives. The OKR timeline is depicted through the OKR cycle — the time when OKRs are set, communicated, executed, monitored, and optimized.
The OKR cycle is the core component of OKR methodology. You lose the benefits of proper OKR planning, ongoing optimization, and the performance-enhancing pressure that deadlines create if you do not have it. Proper planning and execution are essential for a successful OKR cycle.
Two things need to be borne in mind while setting OKR goals:
- The first is that setting goals is not enough and aligning them across the organization is vital. It is also important for the entire organization to work together to fulfill them.
- Secondly, startups need to be flexible enough to adapt to situations based on their experience. This helps them to face uncertainties with greater efficiency and confidence.
Types of OKR cycle: How do you choose?
Generally, OKR cycles have two types: yearly and quarterly.
The quarterly OKR cycle is much more rapid for setting goals and achieving them. Big projects take three months in which to work, yet the period is short enough to find space for iteration. This specific timeframe includes key events such as OKR Planning, weekly check-ins, and an overall review and retrospective at the end, emphasizing a structured approach to goal-setting and progress tracking.
The yearly cycle is less frequent, but this makes room for big, open-ended goals like “increase operational efficiency.” There are many ways to attack that problem, some of which take much longer than a quarter to complete.
The best practice that most companies apply when developing the OKR cycle is the use of a dual cadence strategy; there is a combination of quarterly OKRs and annual OKRs.
The benefits of quarterly OKR include:
- More agile due to a less committed time scale
- Due to the time constraint, it increased efficiency and creativity.
- Faster feedback loops to deliver faster learning.
- Reduced opportunities for “set it and forget it
While quarterly OKRs work only for a quarter, the annual OKR cycles work for each year. That kind of OKR cycle is better for bigger goals and goals that can be thought of as core, consistent business. For instance, growth objectives to be built for annual OKR cycles are very common approaches. Quarterly OKR cycles align with business quarters, enabling companies to set specific, measurable goals, and can be used alongside annual cycles to break down larger objectives into manageable milestones.
The benefits of annual OKR are:
- Ability to set more ambitious OKRs
- More flexibility to optimize toward the goal
- Less pressure due to more time
- Less overhead in terms of managing the OKR process
When deciding on your OKR cycles, consider the following:
- What do you want to achieve and how many?
- Why these goals?
- Do you have the competence to achieve those goals?
- How long is this going to take?
- What might hinder its achievement?
- What do you think would speed this up? What evidence and data do you have that you can do this in this OKR?
- Are your goals ambitious yet achievable?
3 Steps of OKR Cycle
According to Felipe Castro, OKR Trainer, Speaker, and Author, a typical OKR cycle, has 3 steps that are repeated every 60 to 90 days: Set, Align, and Achieve.
SET: Create high-quality OKRs
The cycle commences with the creation of high-quality OKRs. During the team OKR drafting phase, collaboration among team members is crucial to brainstorm and create their Objectives and Key Results (OKRs) based on set priorities.
One should never confuse OKRs with daily tasks. OKRs should be engaging and actionable and should help measure impact.
OKRs should be creative and based on the perspective of employees. They should also help teams to understand the various metrics and how they relate to those OKRs. This will make the teams accountable for the organization’s overall OKRs.
ALIGN: Calibration of OKRs
Calibration of OKRs is a crucial step in the OKR cycle. It involves aligning the OKRs with the organization’s overall strategy and goals. This step ensures that everyone is working towards the same objectives and that the OKRs are achievable and measurable.
During the calibration process, teams discuss and refine their OKRs to ensure they are aligned with the company’s overall objectives. This involves identifying any gaps or overlaps between teams and making adjustments as needed. The calibration process also involves setting clear expectations and defining the key results that will be used to measure progress.
Effective calibration of OKRs requires open communication, collaboration, and a clear understanding of the organization’s overall strategy. It’s essential to involve all stakeholders in the calibration process to ensure that everyone is aligned and working towards the same goals.
ALIGN: Calibiration of OKRs
The next step is to cross-align the OKRs with the organization and the teams.
Aligning OKRs is an ongoing process and includes mapping the interdependencies between the teams.
Teams should discuss the proposed OKRs with their managers. It is the task of managers to improve those OKRs by coaching and challenging the teams.
ACHIEVE: Meet the Objectives
Startups should make objectives a part of the organizational rhythm.
Teams should not consider OKRs as work they have to do apart from their regular tasks. Instead, they should align their daily tasks with their OKRs and make them a part of their work.
To accomplish this, the teams must work to achieve the OKRs after setting and aligning them. To reach the OKRs, they must track and act upon them.
In the Achieve step, the weekly OKR Check-in is very crucial for measuring the OKRs and adjusting corresponding initiatives.
OKR’s success depends on adopting the check-in. Rather than adding more meetings, the goal should be to make them more productive and focus on value instead of tasks.
Here is a detailed example of how the OKR cycle is broken:
At the quarter’s opening, a company would set major objectives representing the company’s vision. These are high-level, ambitious goals, reflecting the strategic priorities of a company.
- Planning Phase-
Objective: Raise customer satisfaction.
The next would be to define Key Results as the specific measurable outcomes that will bring evidence for having achieved the objective.
Key Results:
- Improve Net Promoter Score (NPS) from 60 to 75.
- Improve the average customer service response time to lessen the overall from 24 hours to 6 hours.
- Achieving an average of 90% in customer retention.
- Action Phase-
Now, after the OKRs are set, teams start working on their plans toward the execution of the key results. Progress usually happens throughout the quarter. Teams review their progress often, usually during a weekly or bi-weekly check-in.
- Week 4: The Customer service team introduces new software that improves the delivery speed of response times. NPS has increased to 65 and the response time is down to 12 hours, on average.
- Week 8: Progress Check-in Teams identify areas that can be improved; Resource reallocation should be made, if needed Pain points should be identified NPS has risen to 72; Response time has been achieved at 8 hours.
- Review phase-
Teams review the outcomes at the end of each quarter and review their performance concerning the key results.
Results:
- NPS 74 Not bad at all, with a target of 75.
- The response time decreased to 7 hours, which surpassed expectations.
- The customer retention rate was at 88%, barely not up to the required target.
- Iteration Phase-
From the review cycle, the organization will set new OKRs for the subsequent quarter. At this phase, they may slightly alter their objectives or adjust their key results to face challenges or benefit from successes.
Objective for Next Quarter
- Continue to raise customer satisfaction rates while maintaining a drive to further improve the user experience.
This cyclical process-setting, of executing, tracking, and reviewing helps teams remain aligned with the company’s mission while continually improving performance.
Reflecting on the current cycle’s performance can provide valuable insights to inform and improve the next cycle. By learning from past experiences, teams can adjust their objectives and key results for continuous improvement in subsequent cycles.
Different phases of a quarterly OKR cycle
Most startups use strategic 1-year objectives and tactical quarterly objectives. Learning about the different phases of a typical OKR cycle makes it easier for startups to plan the same. A typical OKR cycle consists of the following phases.
4-6 weeks before the quarter ends
This is the time for leaders to start brainstorming OKRs for the following year. They devise the annual plan set OKRs for the first quarter and give direction to the company. These plans and OKRs should be shared publicly.
You should also be on the lookout for OKR champions within your organization. These are people who have wholly bought into the OKR methodology and therefore know a lot more about it than many other people.
These OKR champions will be able to put a good case to more skeptical members of your team, but they are also important in maintaining consistency and optimization in the rollout process.
2-3 weeks before the quarter ends
During this period, startups confirm the organizational objectives for the next year and quarter. Once decided, communicate the objectives to everyone across the company.
This is also the right time for teams to set their objectives in tandem with organizational objectives. According to the rollout timeline, this is where the organization is supposed to create OKRs at the department, team, and individual levels.
This is where you want your whole organization to start thinking about alignment.
1 week before the quarter ends
Startups hold strategic meetings with all stakeholders, one week before the start of the quarter. These meetings aim to finalize the objectives and establish coordination between teams. The meeting also provides an opportunity to adjust the objectives one last time.
They also provide a platform to map interdependencies and align teams.
Start of the quarter
Once the company’s common goals are communicated, it is time for teams to develop their respective OKRs in line with the company-wide OKRs and propose them at the meetings.
1 week into the cycle
One week after team OKRs are communicated, contributors share their OKRs. This may require negotiation between contributors and their managers, typically in one-on-one settings. This process works best when there is proper communication and negotiation between contributors and managers.
2 weeks into the cycle
A couple of weeks after the start of the OKR cycle, it is time to track its progress. For this startups conduct short weekly or bi-weekly check-ins with the teams.
The teams are made aware of high-level progress made during the first two weeks. These check-in meetings are short and are not held to conduct a full review of all objectives.
6 weeks into the cycle
This is the time to organize longer meetings for check-ins with the top management and with teams. The meetings discuss the progress and performance of teams.
Startups also rate the objectives during these meetings and make any necessary changes to enhance their efficiency.
Near the end of the quarter
Toward the end of the quarter, contributors score their OKRs, perform a self-assessment, and reflect on what they have accomplished.
OKR software for tracking and monitoring
Finally, tracking OKRs forms the last phase of the OKR cycle. In essence, it involves monitoring OKR performance and the impact it has had on your business’s daily activities, corporate goals, and future business growth plans. You can use OKR software to track your organizational goals or you can do it the old-fashioned way via spreadsheets and documents.
- Regular check-in: OKRs are made or broken by check-ins. The OKR process must be integrated into your team’s daily operations.
- Rating and reflections: It is possible to make adjustments and progress toward raising confidence ratings before the OKR cycle ends by regularly reflecting on confidence.
- Retrospection: Nobody is perfect at OKRs the first time. Moving forward, learning, and adapting are all parts of the process. After evaluation, some OKRs may be cut down, while others may be carried over into the following cycle.
OKR cycle best practices
Learning about the different phases of the OKR cycle is not enough. Following the below-discussed best practices for the OKR cycle helps maximize its benefits.
– Address the issue of why
The OKR cycle is likely to enhance the number of meetings that employees need to attend. This can overwhelm them unless the management clarifies the need for increased meetings.
Explaining why every step of the cycle is important reduces the sense of work overload.
It also inspires individual employees to share their ideas to improve the OKR cycle.
– Plan the OKRs in advance
Planning the OKRs at least 2-4 weeks before the beginning of the next quarter improves the efficiency of the cycle.
It ensures that they give enough time for the startups to improve the OKRs to drive business growth. It also means that the company can start the next OKR cycle without further delays.
– Let everyone in the team know the objectives
Communicating the OKR objectives across teams is essential to establish their validity.
It helps the stakeholders to gain a better understanding of what they need to do and when.
Business leaders should discuss the organization’s key quarterly directions and focus areas with their teams.
Similarly, managers should communicate the organizational objectives to their team members. They should also seek feedback and ideas about the best ways of achieving them.
– Invest additional time
The proper execution of the complete OKR cycle requires the stakeholders to invest additional time. That is why startups need to adjust and optimize the OKR agenda while ensuring that it serves its basic purpose.
– Seek inspiration from OKR examples
Startups implementing and executing the OKR cycle for the first time might find the process complicated.
That’s why it is advisable to study OKR examples and seek inspiration from them. This helps startups to minimize errors in setting objectives and accurately following the various steps of the cycle.
– Opt for an event-driven process to structure the OKR cycle
Using an event-driven process to structure the OKR cycle improves employee engagement in startups.
It also helps to promote open and tangible conversations that make agile goal management simpler.
It also encourages strategic thinking besides boosting collaboration across the entire OKR cycle.
– Expect challenges during the OKR cycle and embrace them
The OKR cycle helps startups identify the challenges and inefficiencies of the business.
While the OKR cycle does not pose any challenges on its own, it helps to highlight those prevalent within the organization.
Expecting such challenges and embracing them will help startups overcome them. Using this approach helps to gradually refine the process and make it perfect.
Optimizing OKR Cycles
Optimizing OKR cycles is essential to ensure that the OKR process is effective and efficient. Here are some techniques for enhancing cycle efficiency:
– Techniques for enhancing cycle efficiency
- Regular Review and Reflection: Regularly review and reflect on the OKR cycle to identify areas for improvement. This involves evaluating the progress made, identifying challenges, and making adjustments as needed.
- Continuous Feedback: Encourage continuous feedback throughout the OKR cycle. This involves providing regular updates, progress reports, and feedback to ensure that everyone is on track and working towards the same objectives.
- OKR Software: Utilize OKR software to streamline the OKR process and improve efficiency. OKR software can help with goal-setting, progress tracking, and feedback.
- Training and Development: Provide training and development opportunities to ensure that teams have the necessary skills and knowledge to effectively implement the OKR process.
– Tools and resources for optimization
Some tools and resources that can be used to optimize OKR cycles include:
- OKR Templates: Use OKR templates to help teams set and track their OKRs. OKR templates can provide a structured approach to goal-setting and progress tracking.
- OKR Software: Utilize OKR software to streamline the OKR process and improve efficiency. OKR software can help with goal-setting, progress tracking, and feedback.
- OKR Coaching: Provide OKR coaching to teams to help them effectively implement the OKR process. OKR coaching can provide guidance on goal-setting, progress tracking, and feedback.
Tips on making the OKR cycle successful
Given below are useful tips that can help startups ensure the success of the OKR cycle.
💁♂️Duration of OKR cycle
It is advisable to have an OKR cycle extending no longer than 2-3 months. Smaller startups can even opt for OKRs extending over shorter periods of 6 to 8 weeks.
💁♂️Process Adoption
Startups should try to emulate the process adopted by agile teams to ensure better check-ins and seek inspiration.
💁♂️Re-evaluation
Review OKRs that haven’t been achieved and add them again if necessary for the next quarter. If a Key Result was missed for more than two consecutive periods, most likely it will not be needed in the following period.
💁♂️Repeat Repeat Repeat
Startups should not shy away from repeating the objectives across multiple cycles with updated key results.
Summing up
In short, the mastery of the OKR cycle goes far beyond the setup and tracking of objectives; it is a rhythm that ensures teams are in alignment as well as transparent and adaptable.
This continuous practice of defining objectives in addition to focusing on outcomes keeps a business agile and ultimately leads to meaningful results short-term wins or long-term growth.
That is, whether you are searching for short-term wins or long-term growth, a well-structured OKR cycle will have your team huddled behind what matters the most.
Embrace the OKR cycle to turn your ambitious goals into measurable success, keeping your organization on a path of continuous improvement.
Supercharge your OKR cycle with Peoplebox! Peoplebox makes goal setting collaborative and transparent, offering real-time insights that help you course-correct as needed. Its automated check-ins and performance dashboards eliminate the guesswork, so you can focus on driving outcomes that matter.
With Peoplebox, your OKR cycle becomes more dynamic, engaging, and result-driven—taking your organization to the next level!
