OKR stands for Objective and Key Results. OKRs are goals, that through proposal and discussions, describe precisely where the biggest improvements need to be made, and a desirable future end-state that is typically hard to achieve and measurable. For example, 70% can be an acceptable success rate, depending on the difficulty grading.
The format or structure of an OKR is simple, which is a key reason behind why OKRs are used:
Objective format guidance encourages the use of clear, succinct and motivating language. Think of each Objective as a mission statement.
Key Result format guidance makes the need for measurement clear. For most Key Results this involves a metrics or a milestone based activity. But there are no hard rules on this.
When formatting OKRs the number of Key Results also benefits from the rule ‘less is more’. You can have 6 Key Results but that comes with an overhead, so 2 or 3 is better
The history of OKR is longer that than most think. In the 1950’s, Peter Drucker introduced MBOs or Management by Objectives to focus managers and employees on results, not simply on looking busy. Andy Grove whilst at Intel to the MBO idea and evolved it to become OKRs. Under Grove and using OKRs, Intel increased its revenues from $1.9 billion to $26 billion. He later documented this journey in his 1983 book High Output Management.
Andy Grove believed that top-down management systems were broken and that every employee not only counted and that could set their own goals.
John Doer attended an Andy Grove seminar and later took the idea to Google in 1999. The rest is history. Google went on to achieve x10 growth and has over 100,000 employees. John Doer’s book ‘Measure What Matters’ is still a popular OKR book.
Roll forward to now and Objective and Key Results (OKRs) are now a mature and established way of setting goals. Taking the best of frameworks that have come before, like MBOs, Balanced Score Card, SMART and KPIs, and evolving them, introducing ideas like ambition, alignment, and agility. All necessities for performance management and survival in modern companies.
OKRs are not just a goal setting format, they create focus, inspire ambition, accelerate innovation and encourage collaboration. It’s no surprise to those using them that they have been credited with Google’s x10 growth.
In choosing OKRs as your way of setting, communicating, and managing goals you will be benefiting from the fact the framework that has been created and refined over a long time.
As far as this OKR guide is concerned, and how it can help you today, OKR best-practices are well understood and are tried, tested, and trusted. We have shared what great OKRs and OKR management looks like in this ultimate OKR guide.
People normally try the OKR framework and OKR coaching because they are looking for a new and better way of working. Perhaps you are looking at the framework because you are:
It is really hard to foresee and manage your way through all of complexity and dependencies you face, so structure and support is needed. Which is where the OKR (Objectives and Key Results (OKRs) framework come in.
Their simple structure makes OKR accessible to everyone. Here is the basic OKR format, with an Objective and 3 – 5 Key Results.
OKRs are designed to be inclusive, with a bottom-up, top-down and side-to-side approach to setting goals. Which is very different to the old-school top-down approaches. So once you have an OKR like this it is for other teams and suggest other OKRs and To-dos for help to achieve it. Many of the OKRs that do this are likely to be cross-functional.
By using OKR goals and you will be embedding the systems, processes, technology and habits that will ensure that your strategy, goals and productivity are continually being aligned with opportunities for value capture. Embedding the best ways of working in your company DNA and culture. If you learn to use Objectives and Key Results well, you will:
“At Google, all OKRs, starting with the CEO’s, are visible to all other employees. At LinkedIn, the CEO’s executive team reviews OKRs weekly. This kind of transparency also has several benefits: surfacing interdependencies among teams and units, creating urgency and “mindshare,” and reinforcing the nonhierarchical culture and mind-set that characterize truly agile organizations.”
OKR’s advantage over other goal setting frameworks is the frameworks ability to set highly aligned goals with measurable outcomes within shorter planning cycles. This improves goal clarity, agility, business and team performance.
OKRs can be a core part of your drive for continuous improvement. The journey there will need persistence, commitment, agility, understanding and the ability to deal with set-backs along the way.
Is the reward worth the effort? For most the change is transformational and for employees is like having oxygen pumped into the building.
Changing the way you set goals will evolve every aspect of your business. From the strategy defined, the processes followed, the tasks that are done, the behavioural norms adopted, and an individual’s own personal development.
You should expect all the big lagging metrics to improve; from Revenue to Retention, and NPS to Employee Retention, the KPIs that investors care about should trend in the right way.
Every company and starting points are different, you will need to find ‘your’ way of working with OKRs and evolve it through time.
You’re going to be creating momentum and having some amazing and some really challenging conversations – and the truth is that not everyone will be onboard initially. This is where ‘getting the right people on the bus‘ comes in.
OKRs and OKR Software won’t just to magically embed themselves though. Likely challenges faced by those implementing the framework include:
But do not worry. Help is at hand and there are solutions to these and any other problem you might face. Plus the rewards are worth the effort.
Only 15% know the most important goals
Research by FranklinCovey suggests that only 15% of employees actually know their organization’s most important goals —either there are no goals or they have too many goals.
The critical path to goal achievement is unknown
It’s common to not know which critical activities provide the greatest leverage on goal achievement.
Progress is not being discussed in over 90% of cases
Less than 10% of employees meet their manager to discuss goal progress at least monthly.