OKRs for Engineering Teams

OKRs are one of my favorite tools for staying focused on my goals. I’ve been using them to plan my life since 2020, even creating personal OKRs. This guide captures my thoughts and the techniques I use to craft effective OKRs.

I’ll assume you’re already familiar with the basics of OKRs and their benefits. However, I will summarize key points to keep us aligned.

This guide will be highly practical and actionable, providing concrete examples and best practices for all levels, from engineering managers and directors to VPs of engineering. You can also adapt these pointers for creating your own personal OKRs.

What are OKRs

Objectives and Key Results (OKRs) is a goal-setting framework used by all (individuals, teams, and orgs) to define measurable goals and track their progress. It consists of two key things (ofc) …

• Objectives: qualitative statements that define what you want to achieve.
• Key Results: quantitative metrics that measure how you’ll achieve your objective.

Objectives are usually ambitious and inspirational and answers one key question - “Where do I want to go?“. Key Results are specific, measurable, achievable, and time-bound; and they answer “How will I know I’m getting there?“.

I love this framework because it promotes transparency and alignment (with business impact), ensuring everyone understands the overall goals and how their work contributes to them. More importantly, it helps you think harder about things you should prioritize and be data-driven.

Core Principles and the Sweet Spot

1. Keep objectives ambitious but achievable within the quarter
2. Ensure key results are quantifiable and measurable
3. Align metrics with business impact
4. Focus on outcomes rather than outputs
5. Limit to 3-4 objectives per quarter, with 2-4 key results each

Crafting Good OKRs

It’s worth investing time, energy, and effort in crafting good OKRs. This is typically what the entire team will focus on for an entire quarter. I’ll take the following OKR as an example and then explain the best practices I’ve followed.

• O1: Reduce technical debt in the payment processing system

  • KR1: Decrease P1 incidents from 8 to 2 per month
  • KR2: Increase test coverage from 65% to 85% across all microservices
  • KR3: Improve API performance and make it more efficient
  • KR4: Test and deploy the Payments Batch API

Now, let’s examine the OKR above and see how to craft a good one.

Best Practices for Writing Engineering OKRs

0. Index OKRs using labels like O1, KR1, KR2, KR3, etc. this makes them easy to reference

1. Make objectives inspiring

This is one of the most important factors to consider when writing OKRs. Every objective should be inspirational - something that will excite people. Here’s an example:

O1: Reduce technical debt of the Payments service

While the objective above is acceptable, it isn’t inspirational. People working on it may not feel like they are doing something substantial. I recommend rephrasing it as:

O1: Maintain a state-of-the-art payment stack and uphold engineering excellence

Using impactful, positive words changes the outlook and inspires people to work on the task.

2. Ensure key results are specific and measurable

Every key result should be measurable so the team knows what they are working toward. However, make sure you’re choosing the right metric, not just an easy one.

For example, the original KR3 is poorly written because it’s vague and only says “improve” without setting a specific goal. A better version would be:

KR3: Improve the p99 latency of the payment service from 100ms to 65ms

3. Avoid setting purely activity-based objectives

KR4 is an example of an activity-based key result. It reads like a task

KR4: Test and deploy the Payments Batch API

Even if the task is lengthy, say it takes two months to complete, it’s essential that it’s tracked through a result, not just the activity. This activity can be rephrased as:

KR4: Roll out the payment batch API to 100% of users

This revised key result doesn’t mention testing—that’s implicit. You don’t need to include all the details in the key result itself. These details can be added as a description of the key result or tracked as an issue.

4. Do not create too many objectives or key results

Focus is crucial. Too many objectives dilute effort and hinder meaningful progress. Limit objectives to 2-3 per cycle, each with 2-4 key results, to concentrate effort and maximize success.

Common Pitfalls While Crafting OKRs

1. Your OKRs should not be the same as your JIRA dashboard

A common mistake teams make is treating OKRs as a checklist of tasks from their JIRA board. OKRs are not meant to be a to-do list; they are a reflection of impact and outcomes, not just activity. OKRs should focus on the bigger picture - what success looks like and how progress will be measured.

2. There should be a 1:1 alignment between engineering, product, and business

There should a high overlap across engineering and product OKRs. The delta could be tech debt and engineering excellence items picked by engineering and product research and explorations picked by the product teams. But overall, there should be a 1:1 mapping across engineering and product OKRs when it comes to business outcomes.

When OKRs are too internally focused, they risk losing relevance to broader company goals. Ensuring that most OKRs directly contribute to business success creates a stronger sense of purpose and alignment across teams.

Other Aspects

OKRs are typically set top-down, planned quarterly, and require a regular cadence: setting OKRs at the start of the quarter, mid-quarter check-ins, and end-of-quarter reviews. This keeps OKRs relevant and drives continuous improvement. OKRs cascade from company objectives to teams and individuals, aligning everyone toward common goals and showing how individual work contributes to overall success.

Tool for Tracking

For OKR tracking, a simple spreadsheet is often enough, especially when starting. Focus on defining and tracking meaningful OKRs before getting bogged down with complex software. You really do not need any fancy tool :-)

Ending Note

Remember that OKRs are tools to drive focus and alignment. They should evolve with your organization and be adjusted based on learning and changing circumstances. The key is to maintain ambitious yet achievable goals that inspire teams while driving meaningful business impact.