OKRs in project management: why projects fail without goal alignment

Although many projects are completed on time, within scope and within budget, they often have little impact. The reason is not poor execution, but a lack of alignment. Project teams deliver outputs, but too rarely do they deliver outcomes, which are, in essence, real change in line with the organisation's strategy. This is precisely where Objectives and Key Results (OKRs) come into play. OKRs bridge the gap between day-to-day project work and an organisation’s strategic goals.

Projects are often assessed using the time, cost and quality criteria. While these are important success factors, they say nothing about whether a project actually contributes to business success. For example, an IT project may successfully introduce a new tool. However, if users do not adopt the tool, the added value will not materialise. OKRs provide orientation in this situation. Rather than focusing solely on activities, they shift the focus to impact: how do our projects contribute to the desired outcome?

The OKR framework consists of two components:
 

• "Objectives" are qualitative goals that describe the desired future state. They answer the question: "What do we want to achieve?" An example would be increasing customer satisfaction.
• "Key Results" are quantifiable outcomes that indicate whether the objective is being met. They answer the question: "How is success measured?" How will we know if we are successful? One example would be increasing recommendations of the tool from 45 to 60.

While the Objective provides motivating direction, Key Results ensure clarity and objective evaluation. They demonstrate success, but also highlight areas for improvement. This transparency helps everyone involved to understand what matters and what progress has been made. Consequently, project teams can prioritise their work more effectively, ensuring that resources are used efficiently. Additionally, accountability and employee motivation are strengthened as individuals can see how their work contributes to achieving the overall goals.

In practice, goals are often formulated using the SMART method, while the success of specific measures is tracked using KPIs(Key Performance Indicators).

While SMART goals define individual tasks, they do not automatically establish a link to a project’s strategy. OKRs, by contrast, focus on change and progress, and are directly aligned with organisational objectives. KPIs demonstrate the effectiveness of a process by measuring ongoing performance indicators and assessing operational performance. They are therefore closely related to OKRs.

For example, if KPIs indicate that customer satisfaction with a tool is relatively low, a possible Objective could be to increase customer satisfaction. This, in turn, influences the Key Results. For instance, a Key Result could be an increase from 45 to 60, or the addition of a feature identified as missing through KPI analysis.

For OKRs to be effective in project management, they must be incorporated into the planning process. There are several approaches to doing this.

Organisational OKRs can provide the strategic framework from which project-level OKRs are derived. For example, if the corporate objective is to “increase market share in Europe”, a corresponding project Objective could be to “implement a go-to-market strategy in three new countries”. Project teams can also suggest ways in which they can support strategic goals. This shared responsibility strengthens collaboration and motivation. OKRs should be reviewed regularly — ideally on a quarterly basis — to ensure projects remain aligned, even as conditions change.

Even with a clear structure, OKRs can be implemented incorrectly. If too many Objectives are defined, it becomes impossible to focus on what really matters. Therefore, it is advisable to define no more than three to five Objectives per team or project. These OKRs should be ambitious yet achievable. Setting goals that are too high can lead to demotivation or even stagnation, as the team may no longer see the point of their work. It is also essential to ensure that stakeholders support the OKRs. A lack of commitment from management or sponsors can quickly cause the OKRs to lose relevance. The formulation of key results also requires careful consideration. Rather than defining an activity, such as holding a meeting — essentially a task — an outcome should be specified. For example, this could be increasing customer satisfaction by X%. Only then can progress be meaningfully measured.

Projects rarely fail due to poor execution; they fail because they execute the wrong things perfectly. Without a clear link to organisational strategy, performance lacks direction. OKRs counteract this by creating a shared framework in which every project contribution is connected to the bigger picture. This improves effectiveness and strengthens an organisational culture focused on outcomes and purpose.

OKRs are a leadership tool that helps to clarify priorities, measure progress, and create alignment. When they are consistently integrated into project planning, a culture emerges in which projects generate real value, not just deliver results.