Objectives and Key Results: What Are They & Why Do They Matter?

If you’re running a warehouse, distribution center, or logistics team, you already know how important it is to clearly communicate and track your goals. But simply tracking KPIs isn’t enough. The best teams utilize a framework for making sure they’re focused on the right metrics driving towards the right goals. 

This framework is called Objectives and Key Results (OKRs). 

OKRs are an essential tool to many of the world’s highest performing teams, so we’ve put together a quick guide to help you implement them for yourself. 

What are OKRs? 

Objectives and Key Results (OKRs) are a framework for setting and measuring goals. 

The Objective part of an OKR is what you want to achieve – it’s the north star that you and your team are working towards. It’s your “what.”

Key Results are metrics for measuring your progress towards your objective. They are your “how.”

When put together, an OKR can be read as: 

We will {objective} by achieving {key results}.

How do you set OKRs? 

You should design your OKRs with a 30 to 90 day timeframe in mind. 

Effective objectives are not typically easy to reach, rather they should challenge you and your team to strive for something. Ideally, this objective should tie back to your greater mission as a team or company. As John Doerr, the author of Measure What Matters, likes to say, they should be meaningful, audacious, and inspiring. 

Every objective should have 3 to 5 key results. These need to clearly support their objective to be effective. A good framework for setting them is that by achieving them all, you will have also accomplished their related objective. Each should be critical to the success of their objective and if they aren’t, you’ll want to rethink whether or not to include them. John Doerr recommends evaluating your key results on the following criteria: 

  1. Specific & time-bound 
  2. Aggressive, yet realistic 
  3. Measurable & verifiable

What is the difference between OKRs and KPIs? 

This is a common question as Key Performance Indicators (KPIs) and key results are both common ways to measure performance or progress. However, KPIs typically aren’t tied to a greater objective like key results. KPIs are simply a snapshot of a part of your business or operation. Certainly, there can be overlap between KPIs and key results, but just because something is an important business metric doesn’t mean it can help you measure progress towards an objective. 

Example OKR

Objective: Ensure we have the shipping experience in the entire 3PL space.

  • Key Result #1: 100% fulfillment accuracy rate
  • Key Result #2: 100% on-time shipping rate
  • Key Result #3: Etc.

If you’re monitoring the performance of your warehouse or distribution center, we’ve put together a quick cheat sheet of top metrics to track

Ultimately, OKRs are a great way to align and motivate your team. If you’re interested in learning more about them, we recommend checking out Measure What Matters by John Doerr

We’re always working to improve the quality of our content. If there’s anything you think we’re missing or needs changing on this page, let us know.

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