OKR Scoring: Should You Grade Your OKRs?

If you are approaching the end of the OKR cycle for your organization, then this is the perfect time for grading your OKRs.

Grading OKRs is a chance to reflect on results and what can be changed and improved. High scores provide empirical proof of delivery, whereas low scores prompt a reassessment.

OKRs Scoring is part of the OKRs process in Google. However, with the growing popularity of value-based company-wide initiatives, more OKR coaches and leaders encourage organizations to change how they grade OKRs.

This article will discuss the advantages and disadvantages of using traditional OKR scoring and why it might be better for your organization to switch to value-based key results instead.

What Is Scoring OKRs?

Scoring OKRs and grading OKRs are two terms used to describe the practice of setting criteria for assessing the success of OKRs. When grading or scoring OKRs, you indicate the completion percentage for each key result.

In contrast to traditional goal-setting, OKR grading provides accountability for company-wide efforts to track those goals rather than getting lost in the shuffle of daily activities.

As a result of regular reviews and OKR scoring, teams can understand why work is progressing or stagnating and discuss how to move forward.

How Do You Score OKRs?

On the Internet, you will find numerous different methods for grading OKRs. Whichever method of OKRs grading you choose, you will have to determine the scale you will use, what each number on the scale represents, and how that scale will define progress.

However, there are two main approaches to OKR scoring: traditional OKRs scoring or value-based key results under the OKR framework.

Traditional OKR Scoring

The traditional OKR scoring process is popular within Google's OKR practice. The process of scoring OKRs involves grading each Key Result on a scale from 0.0 to 1.0 and color-coding each score as green, yellow, or red. Each color represents the rate of success for the key results being graded.

• Green: from 0.7 to 1.0 score = "we delivered" status.
• Yellow: from 0.4 to 0.6 = "we made progress, but not what we have expected" status.
• Red: from 0.0 to 0.3: = "we have failed to make significant progress" status.

Template for tracking and scoring OKRs completion

Another traditional approach to OKRs scoring is using a simple “yes” or “no” approach. For example, have you accomplished Key Result X (yes) or failed to make significant progress (no)?

Advantages of the Traditional OKR Scoring Approach

• OKRs visualization is straightforward with color coding.
• By using color-coded and numerical scores, progress could be more easily monitored.
• The method may work best for tracking individual progress, where subjectivity is allowed.

Disadvantages of the Traditional OKR Scoring Approach

• It doesn't give an accurate picture of where the team started from.
• The grading process becomes more complicated because all team members must agree at the beginning of the OKR cycle on what each score means for them.
• Since scoring is highly subjective, it creates a lot of confusion and conflict.

Traditional OKR Scoring Example

Let's look at the following OKR example for a content website in the healthcare industry.

Objective: To become the leading content platform for healthcare professionals seeking the most up-to-date research papers in healthcare.

Key Results:

1. Increase the number of published healthcare research papers per month from 10 to 25 articles.
2. Increase the exposure of our platform in industry-specific digital media from 15 to 20 featured articles per month.
3. Increase our platform’s uptime each month from 80% to 99%.

If your team has published only 15 papers, that Key Result would receive a score of 0.6. If the team has only increased the platform's exposure to only 16 articles (only 1 article increase), that Key Result would receive a score of 0.1. If your team has increased the platform uptime from 80% to 95%, that Key Result would probably receive a score of 0.8.

The Objective final score is the average of the three scores, which is a score of 0.5. But what exactly does a score of 0.5 tell us? Somehow it looks like the team achieved the OKR, but not exactly.

That’s why the value-based key results are becoming more popular among Agile organizations with high awareness of the importance of creating and delivering value.

Why Should You Use Value-Based Key Results Instead of Traditional OKR Scoring?

The problem with traditional OKR grading is that key results define the success of a goal by assigning a number rather than measuring if that goal has delivered any value to the entire organization.

Value-based key results provide a way to measure the outcomes of successful initiatives. They are quantitative and measurable and demonstrate how ambitious the goals are. Value-based key results measure the value delivered to the customers and the organization.

They measure the results of successful activities. The structure of a value-based key result is Increase/Reduce a particular metric from X to Y. X is the starting point, and Y is what you want to achieve.

Advantages of Using Value-Based Key Results

• Establishes clear, measurable Key Results for the entire organization, including an appropriate baseline for everyone to measure against.
• Using numerical information and data-based methods improves accuracy, and subjectivism is prevented.
• You do not have to wait until the quarter ends to analyze progress; it can be done monthly or weekly.

Disadvantages of Using Value-Based Key Results

• Setting personal OKRs may be more difficult.
• Key Results can only be established once more information is gathered about current company progress.
• Keeping track of OKRs requires frequent check-ins, which can be difficult without the right OKR software.

Value-Based Key Results Example

Let's take a look at the following value-based key results examples.

1. Keep new customer acquisition costs under Y.
2. Improve Net Promoter Score from X to Y.
3. Reduce our product’s revenue churn from X to Y.

A value-based key result doesn't need to measure the company's end objective, such as revenue. Still, it can be an element of a metric correlated to generating value.

In Summary

OKR scoring is an imperative component of the OKR method. While some organizations will prefer the traditional OKR scoring approach, many agile organizations use value-based key results.

• Value-based key results establish clear, measurable Key Results for the entire organization, including an appropriate baseline for everyone to measure against.
• The traditional OKR scoring method may work best for tracking individual progress, where subjectivity is allowed.
• If your organization cares more about the delivered value, use value-based key results to measure success instead of the traditional OKR scoring approach.