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Business Strategy 8 min Jan 10, 2025

Why OKRs Work Better Than New Year Resolutions for Business Goals

Author: Marcus Vance (Wharton MBA) Fact-Checked & Reviewed

Most goal-setting fails the same way. The goal sounds right ("grow revenue," "improve team performance," "build more discipline") but it is too vague to act on, there is no way to know if you are making progress, and no one reviews it until the year is over. OKRs fix all three of those problems.

How OKRs Work

OKR stands for Objectives and Key Results. An Objective is a clear, qualitative description of what you want to achieve. A Key Result is a specific, measurable milestone that tells you whether you are achieving it.

Example: Objective: "Build a reliable, repeatable sales process." Key Results: "Close 8 new clients this quarter at or above $5,000 MRR. Reduce average sales cycle from 45 days to 30 days. Document and test a 7-step outbound sequence." Each Key Result is either achieved or it is not. There is no ambiguity.

The Weekly Review That Makes Them Work

OKRs fail without regular review. Schedule 15 minutes every Monday to check your Key Results. Are you on track? If not, why? What needs to change this week? This weekly pass converts a quarterly goal from an abstract intention into a week-by-week action plan.

At the end of the quarter, score each Key Result 0-1.0. A score of 0.6-0.7 is typically the target. If you hit 1.0 consistently, your targets were too easy. If you hit 0.3 consistently, they were unrealistic and you need to adjust.

Common Mistakes

MV

Written by Marcus Vance

Wharton MBA alumni, business strategist, and author at SuccessInformatics.