What is OKR?
OKR (also “OKRs”, Objective & Key Results) is a framework used to set and communicate company, team and employee objectives. It connects the objectives to a company’s vision and mission and measures progress against them.
OKR was originally developed by Andy Grove, one of the founders of Intel and author of High Output Management. John Doerr, from venture capital firm KPCB, later popularized OKRs by introducing them at many of his portfolio companies. Since then, OKR has been implemented and is actively used by Google, LinkedIn and other companies.
However, the method can also be applied to personal objectives. John for example has set a goal for how many times a week he wants to be home in time to have dinner with his family.
Objectives are what you want to accomplish and are usually qualitative. The objective is designed to get people inspired and excited, so you want to use the common language and vocabulary of your team, even if it is informal. An example of an important and hugely inspiring statement that pulls you towards the right direction was John F. Kennedy’s goal of the century: “Put a man on the moon by the end of the decade.”
When formulating goals, aim for fulfilling the Eisenhower IDEA criteria for goal setting:
- Inspiring — only visionary, bold and eloquent objectives move people and your organization forward.
- Difficult — aim high with stretch goals far from the status quo, even go up to the point where one might feel slightly uncomfortable.
- Explicit — make your objective clear, concise and easy to understand from a first and brief glance, even for an outsider.
- Achievable — only commit on goals that can be nearly or completely accomplished in the underlying goal period by the assigned team or individual.
A positively formulated goal with action verbs is more inspiring than a passive statement: Rather than saying “reduce the amount of junk food” you could make it more active and state “eat more calories from healthy food” when describing a goal.
Don’t set goals that mirror your basic expectations or describe your ordinary course of business. Your goals should not confirm the status quo or describe business as usual. You should also not set goals that will automatically come as you achieve other goals.
Key results explain how you get to a certain goal. They are usually quantitative, but always measurable in their progress. Some people choose to start their list of key results with “as measured by: …”. With key results, keep in mind: only results matter for each milestone on your way to accomplishing the corresponding goal. So a key result must not put too much focus on a potential solution nor can it be a plain task list. When formulating, aim for fulfilling most to all SMART criteria by George T. Doran:
- Specific — target a specific area for growth or improvement and leave little to no room for interpretation.
- Measurable — quantify or suggest an indicator of progress to track, e.g. a number or ratio.
- Assignable — specify who will do it or at least be held accountable (the fewer people the better).
- Realistic — state what results could realistically, even if difficult or aggressive, be achieved given circumstances, dependencies and available resources.
- Time-related — if not by default at the end of the given period, specify by which date or event each result should be achieved.
Try to drive the right behavior and outcome by avoiding wrong incentives (i.e., “win three happy customers vs. call 50 people”). They say, “you always get what you measure,” so put your focus on the right incentives.
Don’t camouflage a list of tasks as key results. You might want to refer to this helpful rule of thumb: everything you can do in a day is probably a task, not a key result. If you are still stuck with a task, convert it to a Key Result by using this approach: “When completing this task, what more or less of something measurable do we expect?”
If you don’t have a metric baseline to set a target for yet, start with a quick investigative task and even if imprecise, add the specific number later. You could also make the entire key result your development of measurement infrastructure during the quarter.
Keeping Track of Accomplishment Progress and Final Evaluation with Grading
OKR is not only a framework to set goals, but it should lead to an ongoing discipline to help people work together on measurable progress, in the right direction.
Objectives and key results should be reviewed weekly or bi-weekly to ensure focus and prevent “set and forget”. Use these review sessions to continuously assess progress and share wins, get feedback, share failures, examine issues, and discuss blockers together. If you want to drive motivation further, note your team’s successes and try to point out individual contributions from team members that made a difference in each and every success.
At the end of your goal period, take adequate time for an in-depth assessment of each key result to show respect for the time and efforts invested by the assignee and to find ways to further improve productivity and collaboration in your organization.
Grading should be done quickly using percentage-based scoring. For example, Google uses a 0.0–1.0 scale. Some, however, favor visualizing the accomplishment in different ways like traffic light colors or smileys.
Don’t weigh one key result more than the others when average-grading the total goal, even in the case of different value contribution levels — it’s about the tendency, not perfection.
Benefits of Rolling Out OKR in Your Organization or Personal Life
OKRs can help to clearly put down your plans and commit to taking action through continuous measurement. Further advantages are:
- Foster longer-term thinking and discipline of planning before taking action.
- Clarify and agree upon expectations for teams and individuals.
- Establish a common and open measurement of progress and definition of success.
- Help teams and individuals align goals among each other and enable them to see how they are contributing to the big picture in regards to the company and top-level goals.
- Establish transparency, cross-functional communication and understanding of priorities, both which are made and how potential reprioritization occurring along the way is decided in context.
Common Best Practices When Introducing OKRs in Order to Increase Your Chance of Success
Set goals per year and then per quarter — at a company (big picture at top-level), a team (inherited and newly-matched priorities, not just the bucket of individual goals) and an individual level (personal development and individual contributions).
1 company, 1 team and 1 individual objective is a good start for the first quarter with OKRs. Later, focus on 3-5 challenging objectives per year and 1-3 per quarter, with 4-5 or less key results for each.
Choosing objectives requires deeper thinking — a day or two in preparation and an extended drafting and review phase is not much when you work on your goals for the entire quarter or year.
Publication company-wide of drafts or a presentation with Q&A can assure cross-functional alignment and agreement on dependencies before finalization.
But don’t over-engineer anything — the goal setting, monitoring or grading process — it is the transparency, commitment, and actual work put towards the goals that matter.
Make sure the big picture goals are in a place where everyone can see them, like on the wall or your browser homepage.
Objectives are a network, not just a cascading hierarchy so some goals from far down in the organization might refer to long-term company vision rather than the reporting line’s quarterly goals.
At least 50% of objectives should be created from the bottom up (while mostly connected to top-level goals) to increase team motivation and aspiration.
For each key result, owners might list out projects and tasks for the month or week that they are working on themselves later.
You also need to occasionally step back and question the goals you’ve set for yourself. Stephen Covey wrote, “If the ladder if not leaning against the right wall, every step we take just gets us to the wrong place faster.” However, to keep motivation up, important goals should be rarely adjusted during the quarter, if ever. At most, a minor monthly adjustment in order to react to outside changes should be fine.
A performance review, compensation discussion, or bonus payment should not be linked to an OKR achievement grade, so individuals who are less risk-averse don’t try to game the system for short-term rewards. Performance evaluations are typically subjective and can be extremely discouraging while putting extreme focus on the individual. In contrast, OKRs should provide motivation, while placing focus on the common mission and company instead of on the individual.
Free Objective & Key Results (OKR) Cheat Sheet
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