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Objectives and key results

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Objectives and key results (OKR, alternatively OKRs) is a goal setting framework used by individuals, teams, and organizations to define measurable goals and track their outcomes. The development of OKR is generally attributed to Andrew Grove who introduced the approach to Intel during his tenure there.[when?] John Doerr published an OKR book which is called Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs in 2017.[1]

Overview

OKRs comprise an objective (a significant, concrete, clearly defined goal) and 3–5 key results (measurable success criteria used to track the achievement of that goal).[2]

Not only should objectives be significant, concrete, and clearly defined, they should also be inspirational for the individual, team, or organization that is working towards them.[3] Objectives can also be supported by initiatives, which are the plans and activities that help to move forward the key results and achieve the objective.[4]

Key results should be measurable, either on a 0–100% scale or with any numerical value (e.g. dollar amount or percentage) that can be used by planners and decision makers to determine whether those involved in working towards the key result have been successful. There should be no opportunity for "gray area" when defining a key result.[3]

History

Andrew Grove popularised the concept of OKR during his tenure at Intel.[when?] He later documented OKR in his 1983 book High Output Management.[5]

In 1975, John Doerr, at the time a salesperson working for Intel, attended a course within Intel taught by Grove where he was introduced to the theory of OKRs, then called "iMBOs" ("Intel Management by Objectives").[6]

Doerr, who by 1999 was working for venture capital firm Kleiner Perkins, introduced the idea of OKRs to Google.[7] The idea took hold and OKRs quickly became central to Google's culture as a "management methodology that helps to ensure that the company focuses efforts on the same important issues throughout the organization".[6]

Christina Wodtke's 2016 book Radical Focus popularised the concept of OKRs through a fable about a young startup.

Doerr published a book about the OKR framework titled Measure What Matters in 2017. Grove's simple but effective concept is explained by John Doerr in his book:[6]

The key result has to be measurable. But at the end you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it.

Larry Page, former CEO of Alphabet and co-founder of Google, credited OKRs within the foreword to Doerr's book:[6]

OKRs have helped lead us to 10× 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.

Since becoming popular at Google, OKRs have found favor with several other similar large tech organizations[8] including LinkedIn,[9] Twitter,[10] Uber,[11] Microsoft[12] and GitLab.[13]

Best practices

Doerr recommends that an organization's target success rate for key results be 70%. A 70% success rate encourages competitive goal-making that is meant to stretch workers at low risk. If 100% of the key results are consistently being met, the key results should be reevaluated.[6]

Organizations should be careful in crafting their OKRs such that they don't represent business as usual since those objectives are, by definition, not action-oriented and inspirational.[14] Words like "help" and "consult" should also be avoided as they tend to be used to describe vague activities rather than concrete, measurable outcomes.[15]

When coming up with key results, it is also recommended to measure leading indicators instead of lagging indicators. Leading indicators are readily measurable and provide organizations with an early warning when something isn't going right so they can course-correct. Conversely, lagging indicators are those metrics which can't be attributed to particular changes and so prevent organizations from course-correcting in time.[16]

Criticism

OKRs are typically set at the individual, team, and organization levels, although there is criticism that this causes too much of a waterfall approach, something that OKRs in many ways intend to avoid.[17]

Similar frameworks

There is an overlap with other strategic planning frameworks like Objectives, goals, strategies and measures (OGSM) and Hoshin Kanri's X-Matrix. OGSM however explicitly includes "Strategy" as one of its components.

In addition, OKRs overlap with other performance management frameworks, sitting somewhere between KPI and the balanced scorecard.[18]

See also

References

  1. ^ "What is OKR? - Objectives and Key Results Guide in 2021". Corvisio OKR. 17 May 2020. Retrieved 15 October 2021.
  2. ^ Wodtke, Christina (2016). Introduction to OKRs. O’Reilly Media, Inc. ISBN 9781491960271.
  3. ^ a b "What is an OKR? Definition and examples". What Matters. Retrieved 24 August 2021.
  4. ^ Maasik, Alexander. Step by Step Guide to OKRs. Amazon Digital Services LLC.
  5. ^ Grove, Andrew (1983). High Output Management. Random House. ISBN 0394532341.
  6. ^ a b c d e Doerr, John (2018). Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. Penguin Publishing Group. p. 31. ISBN 9780525536239.
  7. ^ Levy, Steven (2011). In The Plex: How Google Thinks, Works, and Shapes Our Lives. Simon & Schuster. pp. 162–3. ISBN 978-1-4165-9658-5.
  8. ^ "OKR Cycle". Enterprise Gamification. 18 October 2017. Archived from the original on 8 February 2021. Retrieved 14 August 2019.
  9. ^ "OKR Case Studies & Stories - Learn from the best who have had success". ZOKRI. Archived from the original on 12 July 2021. Retrieved 13 July 2021.
  10. ^ Wagner, Kurt (27 July 2015). "Following Frat Party, Twitter's Jack Dorsey Vows to Make Diversity a Company Goal". recode. Vox Media, Inc. Archived from the original on 8 February 2021. Retrieved 3 November 2015.
  11. ^ Fowler, Susan. "Reflecting On One Very, Very Strange Year At Uber". Susan Fowler Blog. Susan Fowler. Retrieved 19 April 2018.
  12. ^ Chadda, Sandeep. "6 things I learnt about OKRs @ Microsoft". Medium. Archived from the original on 8 February 2021. Retrieved 9 September 2020.
  13. ^ "GitLab: Objectives and Key Results (OKRs)". GitLab. Retrieved 25 February 2022.{{cite web}}: CS1 maint: url-status (link)
  14. ^ "OKRs are not "BAU"". What Matters. Retrieved 24 August 2021.
  15. ^ "re:Work - Guide: Set goals with OKRs". rework.withgoogle.com. Retrieved 24 August 2021.
  16. ^ "Going from Good to Better Part 2". What Matters. Retrieved 24 August 2021.
  17. ^ Formgren, Johan (15 October 2018). "Power of making a difference at work – Blog Article". Its in the Node. Archived from the original on 8 February 2021. Retrieved 15 October 2018.
  18. ^ Davies, Rob (9 October 2018). "OKR vs Balanced Scorecard – Paul Niven Explains the Difference". Perdoo GmbH. Archived from the original on 8 February 2021. Retrieved 3 December 2018.

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