Trace Id is missing
May 16, 2022

Focus and alignment: How Microsoft uses OKRs to achieve business goals

Several years ago, teams at Microsoft started tracking objectives and key results (OKRs), giving them a clarity of purpose and establishing a practice that quickly saw grassroots adoption across the organization in groups like Marketing, Sales, and Engineering. This widespread adoption of OKRs, along with a company focus on delivering employee experience solutions to customers, led Microsoft to purchase leading OKR software company Ally.io, which is now available to Microsoft customers as Viva Goals, part of the Viva employee experience platform. Today, Teams throughout Microsoft use Viva Goals to help them drive company objectives such as growth, diversity, and employee wellbeing.

Microsoft Corporation
This article is part of a series that describes how Microsoft Viva was developed and deployed at Microsoft. In this fourth installment, we build on chapter three to describe how Microsoft teams use OKRs to improve business results.

What are OKRs?

Objectives and key results (OKRs) are a proven goal-setting framework for creating alignment, sharpening focus, and building a highly productive and engaged work culture to drive business outcomes.

  • An objective is what you want to accomplish. Whether at a company, department, or team level, an objective is where you are headed—your target. 
  • Key results are measurable outcomes that signal you are moving in the right direction towards your objective. 
  • Key initiatives and projects are the actions your team takes to achieve your objective and key results.

“OKRs allow anyone in the organization to see what other people are working on. Individuals can see the importance of their contributions to their team. Leaders can see how their objectives are being implemented by teams throughout their organization and initiate discussions to keep the work on track.”

Jennifer Perret, Principal Group Program Manager, Microsoft

Given the learning culture at Microsoft, good ideas tend to spread fast, and the use of OKRs has spread rapidly across Microsoft. OKRs first appeared at Microsoft only a few years ago, when smaller teams in the Engineering organization adopted them. “When we started using OKRs, we realized setting organizational-level objectives is really difficult, so we started with team OKRs or project OKRs and then worked to tie them together at the organization level,” says Omar Shahine, Corporate Vice President of Product - Microsoft 365 - OneDrive and SharePoint at Microsoft. “We chose a bottom-up approach. Instead of mandating OKRs from the top, we found teams that were excited about the process and helped build off their successes.” Today, with proven value and buy-in from senior leadership, teams across the company are realizing value from OKRs.

Prioritizing key results to improve employee experience

At Microsoft, which credits much of its success to the creativity of its employees, OKRs serve as a source of empowerment for teams and individuals. “Every employee at Microsoft should feel they can ask their manager how the projects they work on accrue to their team’s key results,” says Maryleen Emeric, Chief of Staff for the Microsoft Modern Work marketing organization. “Now, since we’ve started tracking OKRs in Viva Goals, it’s easy to have that discussion.” To make these discussions possible, each team creates OKRs to represent their specific objectives. Once the OKRs are published in Viva Goals, they are used by team members to create their individual priorities.

By staying focused on these localized key results, individuals can reduce the amount of time spent working on projects that are not critical to the business, improving their work-life balance. “We manage our team OKRs so that everyone understands their goals and what work needs to be done to achieve them. If it’s not on the list, then they don’t have to worry about it,” explains Amy Strande, Microsoft Viva HR Director of Business Management and Customer Zero Strategy.

Most Microsoft teams that use OKRs reserve at least one of their objectives for the team itself, with key results tied to diversity and inclusion, learning, and wellbeing metrics. In this way, OKRs help teams address and improve the broader company culture. “We want all employees to think about how to improve our culture, and we build that directly into our team OKR. Currently, our objective is to create a diverse, inclusive team that can balance business performance and wellbeing” says Emeric.

Seeing the bigger picture through clear objectives

Prior to using OKRs, Microsoft employees did not always understand the connection between their work and larger company objectives. “We did regular pulse surveys asking engineering organization employees if they understood why they are asked to do the work they do, and the results tended to be pretty disappointing,” says Steven Bailey, a Corporate Vice President of Engineering at Microsoft. “But with OKRs becoming a habit in our organization, that is changing and it’s a really good sign.”

That sense of connection to a larger purpose plays a significant part in employee satisfaction. “Especially at the individual contributor level, OKRs have helped people see how the work that we do directly impacts our business strategy and our business objectives,” notes Emeric. “It's critical for people to see how their work drives that impact.”

Ravi Vedula, a Vice President of Engineering at Microsoft, uses OKRs to create cohesion for his team. He sends a monthly update on the team’s objectives to his manager that is also shared with his entire organization. “We document all of our progress towards the OKRs each month, and that keeps everyone on track because everyone knows what the entire team is doing,” says Vedula. “All of my conversations are now shaped by OKRs. Everyone on my team knows our objectives and how they fit into them.”

Shahine noticed the impact of OKRs on new employees. He meets with each new hire in his organization after three months. One employee raved about OKRs because she could see how her work connected to outcomes and knew it was a priority for the leadership team. “OKRs are how we explain the goals and how people’s work connects to them. This insight is especially important when we hire people remotely, where they may not get the opportunity to meet with our leadership team directly,” says Shahine. “And now that we’re adopting a hybrid work environment, we can ensure employees still feel like they are part of the team and doing work that matters.”

Breaking down silos through shared objectives

One of the biggest benefits for Microsoft teams using OKRs is in defining partnerships between teams. “When we struggle to partner with another team, I always ask if we have OKRs. If we don’t, then that has to be the next step because otherwise we’ll just waste time talking about alignment and principles without ever agreeing on an objective,” says Shahine. “When we do have common objectives with achievable outcomes, we can focus on doing the actual work and removing blockers.”

By creating key results that represent real business outcomes, Microsoft has brought together teams that did not share common objectives in the past. “Within Engineering, the adoption of Viva Goals has broadened our view of success, creating deeper partnerships throughout Microsoft. A success metric might be X number of customers using the product,” says Patrick Kelleher, a Principal Product Manager at Microsoft. “We can develop the product, but unless we’ve aligned with Marketing and Sales, the metric doesn’t change. These clear, outcome-based metrics ensure that our teams work together towards a common goal.”

Using Viva Goals as a standard platform to create objectives and track key results facilitates conversations between teams. “Once the OKRs are in Viva Goals, they are easy to share between teams,” says Emeric. “We can easily see where we’re working towards the same goals and where we’re not aligned.” Identifying OKRs helps clarify cross-group relationships because they provide the common vocabulary to compare workstreams and see if they can fit together to produce a result.

Balancing flexibility and consistency

As part of the culture of empowering employees, teams at Microsoft have the freedom to implement OKRs to best suit their needs. Teams can support any number of objectives, with many teams using the standard four or five, but Viva Goals provides the flexibility to track more as required. Teams also have flexibility in deadlines. “We found that it didn’t always make sense to have quarterly key results for projects. When we set longer due dates for some items, it made the process easier,” says Emeric.

Microsoft has established an OKR Enterprise Accelerator Team, which facilitates training and sharing standardized practices that make comparing key results across the organization easier. A champions network of team members trained on the OKR methodology also helps scale best practices around OKRs and help teams write good objectives and clear key results.

Teams across Microsoft now use Viva Goals to track their OKRs. They have learned quickly how to focus their work through a few clear objectives with measurable key results. The most successful teams have developed a set of habits to keep their OKRs up to date, whether through relying on weekly ship room meetings and monthly email updates in Engineering or holding quarterly recognition and refresh meetings in Marketing. “When OKRs are infused into the rhythm of business, they become natural. Viva Goals brings them into the flow of work to really drive focus and create a sense of purpose,” says Emeric.

Using OKRs at Microsoft only gets easier as teams link their Azure DevOps tasks and Power BI data into Viva Goals and begin to leverage the Projects feature so they can better connect their everyday work to their team’s objectives. Though Viva Goals has only been in use at Microsoft for a short time, the visibility provided into departmental and team goals has helped drive business process improvements and a closer relationship between Product Development, Sales, and Marketing teams. As the OKR process becomes further ingrained into its business processes, Microsoft looks forward to better orchestrating individual and team workflows to focus tasks and achieve its business objectives faster.

Find out more about the employee experience platform on the Viva webpage.

“Especially at the individual contributor level, OKRs have helped people see how the work that we do directly impacts our business strategy and our business objectives.”

Maryleen Emeric, Chief of Staff, Microsoft Modern Work marketing organization, Microsoft

Take the next step

Fuel innovation with Microsoft

Talk to an expert about custom solutions

Let us help you create customized solutions and achieve your unique business goals.

Drive results with proven solutions

Achieve more with the products and solutions that helped our customers reach their goals.

Follow Microsoft