Moonshots, Roofshots and Learning Objectives: What kind of OKRs should you define?-EN

Whether for learning, for self-improvement or to achieve certain goals, there are all kinds of OKRs. But what are the differences between each of them? Which one should we use? And why is it important that we understand and communicate the type of Goal we are defining?

This article will guide you through the complexities and challenges of defining OKRs that drive growth and change. We will discover that there is no universal formula for doing so, but by understanding the different types of Objectives, organizations and teams can forge a path to excellence in a world that is constantly evolving.

“We should have Aspirational OKRs!” “OKRs are for overcoming ourselves” “We should always bet on more!”, are some of the expressions I have come across when defining OKRs together with organizations that decided to adopt them. But what is the right way to go? The answer is always “it depends”, the truth is that there is no magic formula to define OKRs. In this article we will talk about the different types of OKRs, and their importance in each moment of adoption.

When Andy Grove first introduced OKRs at Intel, there was only one type of OKR: the aspirational type. Intel faced an existential threat to beat Motorola in the microprocessor market. The company failed to fully deliver on most of its OKRs, but setting the bar so high forced everyone to think big and achieve more, together. Eventually, the OKRs helped Intel win the market and become a successful organization, giving birth to Silicon Valley as we know it today.

Depending on the bibliography we consult, we can find different ways of defining OKRs. Particularly, I will base myself on my personal experience to propose a system that allows us to define both our “moonshots“, those Objectives that aspire to obtain great results, breaking the traditional schemes of what has been achieved so far, encouraging creativity and innovation, and inviting teams to get out of their comfort zone and to reflect on how far can you go? as well as our “roofshots“, which are those Goals that are much more related to the expectation of being met and maintaining the motivation and confidence to go further. As you will see, both are closely related, and a balance is required when deciding which one to use.

We will take as a premise that deciding what is most important is the foundation for writing an OKR.

Differences between Moonshots, Roofshots and Learning Objectives

Roofshots are objectives that, while challenging (an inherent characteristic of any well-defined OKR), are expected to have a near or 100% completion rate at the end of the cycle, i.e., that the individuals and teams who defined and use them can reasonably achieve what they planned to achieve in the established timeframe. Roofshots are generally intended to improve day-to-day operations and are therefore often referred to as “operational objectives”. The achievement of an OKR of this type is critical to the company’s or team’s success, but they are also necessary in order to keep the team or organization motivated, and generally tend to be used more frequently when a company is at an early stage of adopting OKRs.

An example of a Roofshot OKR for a Solar Energy organization could be:

Objective: “Increase Solar Energy Market Share by 15% in the Next 12 Months”.

Key Result 1: Establish strategic alliances with local distributors in at least 3 key regions.

Key Result 2: Enter two new regional markets where demand for solar energy is growing.

This “roofshot” objective focuses on specific, measurable targets that have a direct impact on the company’s solar market share in a shorter timeframe, in this case, one year. The key deliverables are designed to drive growth in a concrete and achievable way in a more immediate time frame, allowing the organization to gradually adapt to the OKR process and make visible progress toward its overall goal of solar market leadership.

Moonshots, on the other hand, are aspirational goals that challenge individuals and teams to go a step beyond what they know they can achieve, thus establishing a new definition of what is perceived to be possible. Organizations that implement Moonshots understand that the team may not fully meet the goal, need more time to achieve it, or need to re-adjust either to itself or to its key deliverables over the course of an initiative. Aspirational OKRs motivate teams to develop a greater part of their potential, inspire them to go beyond what they believe they can achieve, thus encouraging innovation and astonishment in terms of results, since they are generally those that, when defined, seem very difficult, but not impossible to be accomplished and that generate the team to think about going “beyond” what they believe their capabilities are.

An example of a Moonshot OKR for a Solar Energy organization could be:

Objective: “To dominate the Global Solar Energy Market”.

Key Result 1: Develop solar panels with 30% conversion efficiency, a 50% increase over current technology.

Key Result 2: Achieve a 40% reduction in production costs to make solar energy more affordable.

This moonshot OKR aims to propel the company to not only lead the solar energy market, but also to transform the way solar energy is produced, distributed and consumed around the world. Such bold goals not only inspire teams to work on innovative solutions, but can also have a positive impact on society and the environment.

Roofshots and Moonshots are two of the two best known types of OKRs, both of which are helpful in focusing an organization or teams on perceived Outcome as clear results, but by themselves they clearly don’t tell the whole story!

We can think of another type of Objectives, Learning Objectives, as OKRs that also, being Outcome focused, encourage teams and individuals to test and learn when outcomes have a tendency to be perceived as uncertain, so they focus on acquiring new knowledge and experimenting with new ways to achieve a given outcome.

Its outcome is the learning derived from an experiment, obtaining certain information which will help us to make decisions towards the future, thus generating greater certainty.

It is clear that they should not be abused, as they could easily enter the analysis by paralysis, so it is important, as OKRs Coach, to motivate teams to learn to accept and deal effectively with uncertainty, so the Learning OKRs should be more the exception than the rule.

An example of a Learning OKR for a Solar Energy organization could be:

Objective: To Constantly Improve Our Knowledge and Competence in the Solar Industry

Key Result 1: Conduct an in-depth analysis of at least three successful solar energy projects in the last year, identifying best practices and lessons learned.

Key Result 2: Organize regular “Lunch & Learn” sessions where employees can share experiences and knowledge with each other, achieving an average participation of 80%.

This Learning OKR focuses on improving the team’s knowledge and competence in the solar energy field. Each key result focuses on specific areas of development and improvement, aligning efforts with the overall goal of staying at the forefront of the industry.

As we can see, different needs imply different strategies. So it is important to ask ourselves, what do we perceive as success? How high can/should we aim? What is our current context? Are we in the middle of a crisis/reorganization or do we have room to innovate and accept new challenges? All these questions are essential to answer when defining the right OKR for our organizations and teams. Therefore, in my opinion, there is no point in having a formula to pull from when defining them, nor a golden rule to define a balance between them.

In summary, the three types of OKRs we can define are:

Roofshot

An Objective to be 100% met by the end of the cycle.

Essential to the health and success of any organization.

It should be aspirational, success should not be taken for granted.

Well-defined OKRs for this objective should be aggressive but also realistic.

Moonshot

A significant degree of Aspirationality, we know that only 70% of them will be achieved.

It sets the bar for success high and compliance is beyond the team’s/organization’s reach.

Aspirational OKRs lead the team to think beyond their capabilities, promoting innovation and amazement at the results, even if they are not fully achieved.

De Aprendizaje

This is what we want to learn in this cycle

They provide guidance in situations where we do not have enough information or data about the best way forward.

Learning objectives encourage teams to experiment more effectively. Enabling them to fail faster and more constructively.

But why not always have only Moonshots?

It is often said that achieving 100% of an Aspirational Goal in one cycle is very difficult, and it really should be defined as such. Achieving 70% of a BHAG (‘Big Hairy Audacious Goals’) goal gets us much further than 10% of a low aspirational goal. The point is that aspirational goals often help teams make steady progress over time toward a seemingly impossible goal. This can lead to some frustration and demotivation.

For this reason, both Roofshots and Moonshots contribute to the health and success of an organization. Many organizations use a combination of both in order to achieve a sustainable scheme that keeps people motivated, aspirational and continuously improving.

Most notably, I have observed that Aspirational OKRs work best when an objective is expected to take several cycles to complete. The target can remain the same from cycle to cycle and carry forward any key outcomes that are not fully met. Eventually, when the OKR is within the assured scope and feasibility, we will label it as a Roofshot. This will indicate that the target is expected to be complete at the end of the cycle.

How to rate Roofshots vs. Moonshots?

An additional point to the typology of each OKR is the OKR’s rating. This calculation is simply the average of the scores of its Key Results. The rating brings up a key difference between Roofshots and Moonshots.

Roofshots must be achieved within the cycle. Qualification is binary: pass or fail. An OKR is either 100 percent achieved or not.

Moonshots, on the other hand, are a bit more nuanced. Depending on the organization they can be considered a success or not. To give an example, Google sets many aspirational goals and expects teams to achieve an average of 70 percent on their OKRs. They consider anything below 40% as a failing grade, and anything between 40% and 70% is considered good progress, but not as good as what was expected.

In order to make the process of defining OKRs visible and transparent, it is not enough to simply define them. It is important that we can:

Labeling Moonshots, Roofshots and Learning Moonshots clearly:

It is as simple as placing an “M” next to Moonshots and an “R” next to Roofshots and an “L” in front of Learning Objectives to avoid confusion. Teams may underperform if they believe a Moonshot is actually a Moonshot. If the team confuses an aspirational OKR with a Roofshot, they may feel defeated, fear for their jobs or shrink back from certain challenging situations. This enables each OKR to truly fulfill its purpose, avoiding assumptions and encouraging self-improvement and constant challenge.

Define the success criteria at the start of the OKR cycle:

It is important that people are aware of what is expected as soon as possible, whether it is a Corporate, Team or Personal Objective, waiting until the middle or end of an OKR cycle to decide it puts at risk the transparency, the effort invested and the motivation of the team. It must be clear where we start from (Baseline) and where we are going (Target).

Set a high standard for labeling an aspirational OKR:

It takes practice to develop a good goal-setting muscle. At first, some Aspirational Goals will be too timid; and some Roofshots will be too ambitious. To navigate within this uncertainty it is helpful to ask the people who are defining OKR, “What is really important to our organization and what do our users/customers want?” An aspirational OKR must meet or exceed that desire. If the answer feels too achievable, it is more likely to be a Roofshot and not a Moonshot.

We will continue to publish articles on this exciting topic that so many organizations are successfully using to define, communicate and achieve their goals.

To go even deeper, we invite you to stay tuned to these upcoming publications and to take a look at our Knowledge Center, where you can find the interview Defining OKRs with Rodigo Ryan, and the articles OKRs: What are they? and… Why now? by Rodrigo Ryan and Alignment and focus of Objectives with OKRs by Alonso Álvarez.