Objectives and Key Results (OKR) is a goal-setting system that can be applied at any level, from the individual to teams and large organizations. This system ensures the achievement of very big and daring goals by reaching the Key Results established as necessary in this regard.
Therefore, we determine where we want to reach, what we need to accomplish to get there and focus on meeting the established milestones within a set time frame. Applying Objectives and Key Results (OKR) takes you out of the comfort zone and makes you learn both successes and failures. Properly applied this system helps you focus extraordinarily well and, most of the time, to accomplish much more than you ever thought possible.
Andrew Stephen Grove (born András István Gróf; 2 September 1936 – 21 March 2016) is known as the "guy
drove the growth phase" of Silicon Valley and also as "the father of OKR". In his book, High
Management (1983) has documented how he introduced the approach to Intel.
L. John Doerr (born June 29, 1951) learned about Objectives and Key Results (OKR) in 1975 while working at Intel. In 1999 he introduced the idea to Google’s leadership and in 2018 he published the book Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs, "a handbook for setting and achieving audacious goals"
OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of 'organizing the world’s information' perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most.
There are 2 variants of OKRs depending on the two types of goals one can set. We can have goals that must necessarily be achieved and those we know we may not complete, but we want to move forward in that regard.
The Committed OKRs might be very challenging but are more realistic and to be a success, all the Key results must be accomplished. Meanwhile, the Aspirational OKRs are probably impossible to achieve in the available time frame and your resources should be evaluated before setting them.
Goals, Objectives, Key Results, Initiative and Grades are the basic elements in the implementation of this system for setting ambitious goals and tracking progress towards achieving those goals.
Goals in OKR are the final and main results that must be achieved. Usually, goals are broadly defined and have a long time-frame but it must be very ambitious. Here are some of the features that must define goals, revealed in an interview for Betterworks by John Doerr
- Goals must be supported by the entire organization. Every team and working group should agree on their goals and priorities.
- Goals must be measurable or have quantifiable targets. Maybe it’s shipping a certain number of products or hitting a release schedule, but in any case, we have to be able to track and measure the goals.
- Goals should be aggressive yet realistic. We want to stretch ourselves and stretch our teams, but not to the point of breaking.
- Don’t tie the OKR goals to bonus payments, except for sales quotas. We want to build a bold, risk-taking culture."
Objectives in OKR can be viewed as an intermediate destination on the way to achieving the goals. Objectives are those that set a clear direction and provide motivation. Objectives must be bold but realistic and included in a time-frame. It also must be defined very specifically and formulated so that will push for new achievements. A limited number of objectives is recommended, between 3 and 5. Objectives must be so ambitious that they feel somewhat uncomfortable.
The objectives in the Objectives and Key Results system are given by the answer to the question "Where do I want to go?"
Key results in OKR measure progress towards an Objective. About 3 key results are recommended for each Objective. The key results should describe outcomes and must express measurable milestones, and should be easy to grade with a number. Also, it should include evidence of completion.
The Key results in the Objectives and Key Results system are given by the answer to the question "How do I know if I’m getting there?"
Initiative describes the work you’ll do to influence a Key Result. It can represent tasks, projects, or similar activities that should not be dependent on something or someone else, and their outcome should be a Key Result. There is a minimum 1 Initiative related to a specific OKR
The Initiative in the Objectives and Key Results system is given by the answer to the question “What will I do to get there?”
Grades. Each Key Result must receive a grade and then, using a rough average, the correspondingly the Objective is also graded. This way we can see how close we are to meeting the proposed objectives. When grading OKRs the following facts must be taken into account:
Several elements that can undermine internal values and create a confusing strategy, which is why it is advisable to avoid them:
By definition Objectives and Key Results system that helps companies to align company, team, and personal goals, and ensure everyone is working collaboratively on goals that really matter.Properly applied this system will bring the following benefits: