OKRs is a goal-setting framework that helps organizations define objectives and then track results in days rather than months. OKRs have been around since the 1970s, created by Andy Grove, but popularized by John Doerr, one of Google's early investors. OKRs quickly became a key focus for Google, and since then, companies like LinkedIn, Twitter, Dropbox, Spotify, AirBnB, and Uber have followed suit.
In this article, we will delve deeper into implementing Objectives and Key Results (OKRs).
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What is OKR? Meaning, Definition, and Examples
OKRs stand for Objectives and Key Results. It is a collaborative goal-setting methodology used by teams and individuals to set ambitious and challenging goals with measurable results. OKRs track progress, create alignment, and encourage engagement around measurable goals.
Whether we are talking about office processes, software engineering, nonprofits, or more, OKRs work the same way to set goals across many levels of the company. They can also work for personal goals and can even be used by individuals to get things done in places where the upper management does not use them.
OKRs Methodology: History and Origin
The OKRs methodology was created by Andy Grove at Intel and taught to John Doerr. Since then, it has been adopted by many companies, including Google, Allbirds, Apartment Therapy, Netflix, and inspiring nonprofits like Code for America.
In his book "Measure What Matters," John Doerr wrote about "MBOs" or Management by Objectives. MBOs were the brainchild of Peter Drucker and provided Andy Grove with a foundation for his final theory on OKRs. In fact, Grove originally called them "iMBOs" or "Intel Management by Objectives." Despite the original name, Grove created some key differences between the two, which he passed on to Doerr.
Grove rarely mentioned objectives without linking them to "key results," a term he seems to have coined himself. Other key differences between MBOs and OKRs are that the latter are quarterly rather than annual and are separate from compensation.
Doerr coined the term "OKRs" and introduced this philosophy to Google's founders in 1999. While gathered around a ping-pong table that doubled as a board table, Doerr gave a presentation to the young founding team, which included Larry Page, Sergey Brin, Marissa Mayer, Susan Wojcicki, and Salar Kamangar.
Implementing Objectives and Key Results (OKRs)
When developing OKRs, you want to encourage your team to set goals outside their comfort zone and ambitious ones. However, it is important to emphasize that OKR results will not negatively impact performance reviews, compensation, or job security.
Brainstorming sessions where your team can clarify the objectives that will have the most impact in the upcoming quarter are worthwhile. Australian software company Atlassian suggests asking: "What are the most important impacts we need to make in the next quarter?"
Once the OKRs are set, you'll need to record them, typically using a scale from 0 to 1, or a percentage from 0 to 100. A score of 0.3 or 30% means you missed the mark, while a score of 0.7 or 70% means you made progress but did not hit the target. According to Atlassian, a score of 1.0 or 100% means you achieved your objective and key results, but Atlassian advises that even a score of 0.7 or 70% is considered a success. OKRs are typically long-term or "stretch" goals that will take longer than a quarter to complete.
Defining Key Results
Once you have set your objectives, you need to define the key results. Avoid turning your KRs into a to-do list; instead, focus on outcomes related to business priorities. Your KRs need to explain how certain tasks will achieve the desired results.
To make your objectives measurable, you will need to consider each objective and the results you want. Since objectives are qualitative by nature, you want to provide an objective way to measure success. Each KR should also have an owner on the team – this person is responsible for tracking progress and finding ways to achieve the desired outcome.
How Often Should OKRs Be Reviewed?
There are no hard and fast rules about when to review OKRs' progress, but it is generally recommended to review them weekly with key stakeholders and quarterly with a broader audience.
For most companies, the weekly progress review will involve the team dedicated to that goal or project. This is a good time to involve those closest to the project or goal, narrow down the finer details, and check in with all participants on overall progress. These meetings should consistently be held before quarterly check-ins involving a larger group of people invested in the OKRs' progress.
When it is time for the quarterly check-in, it is important to have a clear agenda outlining who will provide progress updates and which teams will be involved. There should also be enough time at the end for a Q&A session and to get constructive feedback on OKRs' success. It is important to foster an open environment where everyone feels comfortable providing feedback, asking questions, and raising any potential concerns.
What Makes a Good OKR?
OKRs are meant to be flexible, meaning they can adapt to your priorities. Once you set your OKRs, if you feel confident in your ability to achieve them, DocSuite HR suggests increasing the goal by over 30%. If you are unsure you will achieve your KRs, it means you are likely setting your goals high enough.
You should evaluate and check your OKRs monthly to ensure everything is on track. You will need to predict the end-of-quarter outcome for each KR to judge how it is tracking or identify any issues or adjust priorities if needed. Average the score for all your KRs, and this is the overall score for that specific objective.
Benefits of Using OKRs
OKRs are inherently designed to help companies move forward with a strategic growth and success plan. Some of the benefits of OKRs include:
- Aligning employees with business goals and defining productivity around those goals.
- Improving resource management and allocation.
- Establishing accountability and transparency and measuring goals.
- Identifying problems and their root causes, allowing you to address potential barriers.
- Creating a better environment for informed decision-making.
- Implementing weekly progress check-ins built on clear and defined goals.
- Tracking goal progress effectively and ensuring it aligns with business objectives.
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Best Practices for OKRs
OKRs are used to set individual and group goals to help knowledge workers prioritize work in fast-paced environments, such as the tech industry, says Reichheld. Therefore, it is important to stay focused on the most important priorities.
Reichheld says, "OKRs are valuable as a tool for prioritizing initiatives and defining the desired outcomes of those objectives."
DocSuite HR also offers the following checklist for setting OKRs:
- Put the customer first.
- Do not skimp on ambition.
- Tie objectives and key results to larger company goals.
- Only enough O’s and KRs.
- If you cannot measure it, it is not a good KR.
- KRs are outcomes, not tasks.
When your OKRs are complete, you will need to evaluate them to see what worked and what needs to change in the future. Ask yourself and your team if your goals were ambitious enough, if the key results were measurable, if any objectives and key results were overlooked, if they remained aligned with the business strategy, and if the organization felt invested in the OKRs. You will need to determine what you learned and how to apply it in the next quarter.