What are Annual Objectives?

Annual objectives are specific, measurable statements of what a business is expected to achieve within an annual period. These are usually one part or phase of the organization’s longer-term goals, for example, the first year objectives of a three-year growth strategy. This puts annual objectives in contrast to quarterly objectives which tend to have a narrower focus and shorter-term deliverables. 

Which begs the question, should you set annual or quarterly objectives? To which the answer is: why not both? 

Many companies following the OKR process find it valuable to set annual objectives as a tactic to keep their broader vision at the forefront while using quarterly objectives to execute the steps toward that vision. In fact - Google started out by setting quarterly OKRs, but today they set both annual and quarterly OKRs for the most impact.

Writing Annual Objectives

Writing annual objectives should feel a little different from writing quarterly goals. The larger scope lends itself to broad objectives: for example, ‘Raise market share by 5%’. If that sounds like a company-level objective, that’s because it is! It is a good practice to set annual objectives at the organization level and use them in combination with quarterly objectives.

Each annual objective should have 3-5 quarterly key results. These quarterly key results should be department or team level (depending on the size of the company) objectives, maintaining alignment through the hierarchy.

Team and individual OKRs are best left at a quarterly cadence - but most of them should still be aligned to annual objectives. It is not necessary or recommended that teams and individuals have annual objectives - which can introduce complexity and divide focus, but there are exceptions.  

Implementing Annual OKRs in Ally

Luckily, coming up with your annual objectives is going to be the hardest part. With Ally, implementing them is a snap! 

1. First, you will want to navigate to the appropriate annual time period. By default, Ally features annual time periods of the format Jan 1 - Dec 31 20XX, but if your company follows a different cadence, you can set up a custom time period from Admin -> Time Periods.

2. Write your organization-level objectives. 

3. Next, write 3-5 key results per objective. Here’s the secret sauce: set the time period of each key result to the relevant quarter. For example, KR1 might belong to Q1 20XX while KRs 2 and 3 belong to Q2 and so on until you have charted the entire progress of key results leading up to the top-level objective. Try to frontload the work - you’ll thank me later! 

4. Proceed as normal by setting up the team and individual level quarterly OKRs. 

5. Get to work! As individuals and managers make check-ins, Ally will automatically calculate the progress toward your annual objectives. Maintain a bird’s eye view with our attractive dashboards and use the objective explorer to drill down and generate reports where necessary. We happen to enjoy using chart view to easily visualize the alignment.  

An example - In the screenshot below, we have the broad organization-level objective ‘Double revenue to $20M’ in the annual 2019 time period. The KRs are set up as follows:

  • Q1 2019:  'Increase ARR to $14M'. Notice how this is the most ambitious of the key results
  • Q2 2019: 'Increase ARR to $17M'
  • Q3 2019: ‘Increase ARR to 19M’
  • Q4 2019: Finally, the last KR, 'Increase ARR to $20M', which was the annual objective

This setup breaks down a lofty goal into manageable, actionable chunks. The successful completion of all four key results distributed over the quarters will result in the completion of the overall annual goal.

You’re all set up. With your new annual objectives, you will never have to choose between the tactical value and focus of quarterly objectives and the strategic value and ambition of annual objectives. Set your sights on your company’s long-term vision and leverage the power of your OKR alignment to get there! 

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