Grading and reflecting is the moment we've been building towards. At the start of the cycle, we set a handful of goals and we tacked on measurable markers for success, and now we're calling time. Did we cross our finish line? If we did, what helped us cross it? But if we didn't, what were the causes and what would we do differently? Grading and reflecting on OKRs is how we end one cycle of OKRs and begin another. In this lesson, we're going to learn how to grade our OKRs and in the next one, we'll learn how reflecting on our OKRs helps us set better goals for the next cycle. Grading is an objective activity for every Key Result we mark how far we got. It's very clear if we exceeded our Key Result or if we didn't. Grading happens in a quick and efficient manner. If you've been tracking your Key Results over the cycle, you're going to have a good read and what those scores are, and there won't be many surprises. To get an overall score for the OKR, you average scores from all the Key Results. Remember, Key Results should be written so the score is easy to measure and that anyone on the team can verify it. There shouldn't be a debate on what the score is. There can be debate and discussion on why it's that score, but we're going to do that later in the reflecting stage. Here's an example, let's say your Objective is to increase the fuel economy of a car. The first Key Result was to reduce the weight of the car by 10 percent. Amazingly, our team reduced it by 9 percent, we got a score of 0.9. Our second Key Result was to reduce the drag by 12 percent and we reduced it by 6 percent, a score of 0.5. A half. Our third Key Result was to source new tires from a manufacturer that made more fuel-efficient ones. But unfortunately, we failed to make a deal with one by the end of the quarter, but we're about halfway through the process and the deal should come together next quarter. We give ourselves a score of 0.5. To get a score for our OKR, we take the average and in this example, we scored 0.63. Google grades based on a range from 0.7- 1.0 is green - we delivered, 0.4-0.6 is yellow - we made progress but we fell short of completion. If it's anywhere between zero and 0.3 - that's red. We failed to make progress. If we use Google scoring system in this example we just went through, we are yellow. Good progress but not quite where we're hoping to be. Grading is that quick. Once you've created each individual OKR, zoom out and look across all the OKRs together. For most teams, it's going to be a mix of greens, yellows, and reds. But if for some reason you see all reds, it's likely the team set OKRs that were unrealistic or irrelevant, or something happened that caused the team to miss the mark. Google, for example, aims for a 70 percent average over a year of setting OKRs. They're going to exceed on some of them, but they also fall short in others. But on average, they're 70 percent. For them, that represents the appropriate amount of stretch, especially since their culture is to set mostly aspirational OKRs. Because most of Google's OKRs are aspirational, the 70 percent bar might be high for your organization, and if it is, choose another number as a threshold for what a good score means. It really depends on your culture. For some organizations, getting 70 percent feels like a low score and might demotivate the team. And others may think getting all As is playing it safe. Whatever number you and leadership set make sure to communicate clearly what a good score means. Outside of your committed OKRs, remember those are the ones you're reaching for 100 percent, you don't want to see all green all the time. If every grading is perfect, it's an indicator that the team could be more ambitious. Use that feedback to stretch more in the next cycle. Remember, no one is shamed or judged in this process. This is about the collective effort of the team. You want to encourage teams to be intellectually honest and transparent about their collective performance. We ask, "How far did we get on this OKR?" If it wasn't far enough or if it was a total failure, that's okay because we're going to address it in the next round. If you didn't land where you wanted, it's a spark for a new plan. Grading is a learning exercise and use the principles of CFRs in your grading meetings. It can help to have a person leading the scoring exercise and pick the most objective person on your team to lead that conversation. It's a good rule for the OKR Shepherd. As you grade, give credit where credit's due, recognize and celebrate the major wins in your grading sessions. Hitting goals is hard, and admitting failure feels vulnerable, but acknowledging both can help keep your teams engaged in the process and stretching to the next level. We balance grading with introspection and context around those scores. In this next lesson, we'll take a look at how to turn grades into the seat of action for the next cycle -- with self-assessment and reflection.