Short for Objectives and Key Results. It is a collaborative goal-setting protocol for companies, teams, and individuals. Now, OKRs are not a silver bullet. They cannot substitute for sound judgment, strong leadership, or creative workplace culture. But if those fundamentals are in place, OKRs can guide you to the mountaintop. KEY RESULTS benchmark and monitor HOW we get to the objective. Effective KRs are specific and time-bound, aggressive yet realistic. Most of all, they are measurable and verifiable. (As prize pupil Marissa Mayer would say, “It’s not a key result unless it has a number.”) You either meet a key result’s requirements, or you don’t; there is no grey area, no room for doubt. At the end of the designated period, typically a quarter, we declare the key result fulfilled or not. Key results evolve as the work progresses when an objective can be long-lived, rolled over for a year or longer. Once they are all completed, the objective is necessarily achieved. (And if it isn’t, the OKR was poorly designed in the first place.) Employee expectations have never been higher. Top talent can write their ticket and choose where they work.
Who should care about OKRs? The short answer, of course, is that everyone should care about OKRs at your company. From the executives and division heads to every team of teams, team, and individual team members. And if you do it right, OKRs can be a lightweight way to align key strategies at your company from the very highest level, defining who you are as a company down to how every single team will help the company achieve its short and long-term objectives. In 1968, when Intel opened shop, a psychology professor at the University of Maryland cast a theory that undoubtedly influenced Andy Grove. First, said Edwin Locke, “hard goals” drive performance more effectively than easy goals. Second, specific challenging goals “produce a higher output” than vaguely worded ones. In the intervening half-century, more than 1,000 studies have confirmed Locke’s discovery as “one of the most tested, and proven, ideas in the whole of management theory.” Among experiments in the field, 90 per cent confirm that well-defined, challenging goals enhance productivity. Similar benefits accrue in the not-for-profit world. At the Bill & Melinda Gates Foundation, a $20 billion start-up, OKRs deliver the real-time data that Bill Gates needs to wage war against malaria, polio, and HIV. Sylvia Mathews Burwell, a Gates alumna, ported the process to the federal Office of Management and Budget and later to the Department of Health and Human Services, where it helped the US government fight Ebola. Objectives Qualitative goal that you want to achieve. This is your desired outcome. Key Results Measurable, quantitative metrics contribute to an objective's achievement. Key Initiatives and Projects These actions will be taken to achieve critical results.
OKRs are not
- Unrealistic or ambiguous goals
- Task list or to-do list
- Overly specific Common mistakes
- No real plan to achieve OKRs
- Key results aren’t measurable
- Too many Objectives or Key Results
IN 2009, THE Harvard Business School published a paper titled “Goals Gone Wild.” It led with a catalogue of “destructive goal pursuit:" exploding Ford Pinto fuel tanks, wholesale gouging by Sears auto repair centres, Enron’s recklessly inflated sales targets, and the 1996 Mount Everest disaster that left eight climbers dead. Goals, the authors cautioned, were “a prescription-strength medication that requires careful dosing . . . and close supervision.” They even posted a warning label: “Goals may cause systematic problems in organizations due to narrowed focus, unethical behaviour, increased risk-taking, decreased cooperation, and decreased motivation.” The dark side of goal setting could swamp any benefits, or so their argument went. In business, alienation isn’t an abstract, philosophical problem; it saps the bottom line. More highly engaged work groups generate more profit and less attrition. According to Deloitte, the management and leadership consulting firm, issues of “retention and engagement have risen to No. 2 in the minds of business leaders, second only to the challenge of building global leadership.”
OKR Superpowers Review your OKRs against the 5 OKR superpowers:
- Focus: What can be eliminated?
- Alignment: Who are the stakeholders?
- Tracking: Can we track if we were successful?
- Transparency: Where are there unseen implications or bottlenecks?
- Stretch: Is it propelling the business forward?
But exactly how do you build engagement? A two-year Deloitte study found that no single factor has more impact than “clearly defined goals written down and shared freely. … Goals create alignment, clarity, and job satisfaction.” Goal setting isn’t bulletproof: “When people have conflicting priorities or unclear, meaningless, or arbitrarily shifting goals, they become frustrated, cynical, and demotivated.” An effective goal management system—an OKR system—links goals to a team’s broader mission. It respects targets and deadlines while adapting to circumstances. It promotes feedback and celebrates wins, large and small. Most importantly, it expands our limits. It moves us to strive for what might seem beyond our reach.
Summary
- They are, first and foremost, a communication mechanism or information radiator to explain strategy and intent simply and succinctly (upwards, outwards, and inside your team).
- More than just goal setting, OKRs are meant to inspire and guide your work using both short (the key results) and long-term timeframes (the objectives).
- Great OKRs for a team-of-teams, for example, will also reflect and align to the cohesive strategy in the OKRs set at a company or division level and dovetail nicely with the OKRs of the individual teams in your team-of-teams. It may take some iterating to get everything aligned.
- OKRs are a flexible framework to explicitly state intentional direction, define boundaries, and, most importantly, provide the specific and measurable vital results you (and your team) will use to understand your progress definitively. Then, as per usual, inspect and adapt and carry on.
- The key results should be revisited at least monthly (Have we made progress yet? Are we on track to meet our quarterly key result measures? Even a quick gut check with the team is good). Then, OKRs should be refreshed, renewed, or replaced, perhaps quarterly, so that the focus remains on a small number of relevant and short-term items. This ensures you deliver the correct value to customers and establish feedback loops to verify that impact. It also helps you, your Product Managers and teams avoid working on too many things at once (and be able to say “no” to things not explicitly called out in your current strategy).
- As any good strategy does, OKRs connect all involved to WHY the work matters and ultimately HOW the customers and end users will benefit from your work. Ultimately, this encourages the team to deliver value incrementally against those goals to ensure all your work aligns with the intended direction.
References
When John Doerr Brought a ‘Gift’ to Google’s Founders | WIRED
Introduction to Microsoft Viva Goals | Microsoft Docs
Writing OKRs Cheat Sheet (microsoft.com)
Amazon.com: Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs: 9780525536222: Doerr, John, Page, Larry: Books