What is an OKR?
Objectives and Key Results (better known as OKRs) is a management strategy for setting business objectives and measurable outcomes. It relies on set, tracked, and re-evaluated goals paired with measurable results.
Andy Grove introduced OKRs at Intel in the 1970s. They spread throughout Silicon Valley in the 1990s.
OKRs set qualitative objectives and establish key results metrics for the business. Often used for quarterly planning, they’re either established for shorter or longer timelines. These common, measurable objectives keep all employees on the same page while moving towards the strategic goal. These objectives are then reevaluated and adjusted regularly to ensure optimal organizational alignment.
OKRs aren’t intended to be easily achieved, and compensation is seldom tied to them. Instead, they’re ambitious direction setters, singularly focused on the company’s ideal destination. If an objective was 100% reached, it was likely too modest of a goal to begin with.
According to Google’s Ten things we know to be true: “We set ourselves goals we know we can’t reach yet because we know that by stretching to meet them we can get further than we expected.”
Why use OKRs?
OKRs marry two important elements of successfully creating and executing a strategy.
First, objectives are identified and agreed upon, with clear targets for teams to shoot for. These are typically brief and inspiring goals that get employees excited and motivated.
Second are the key results, which are measurable and quantifiable. By relying on quantitative versus qualitative measures, there’s no disagreement or uncertainty about desired outcomes and the defined levels of success. Each objective has multiple key results, with the final measure of progress occurring when the quarter ends (versus when the objective is reached).
OKRs’ directness, simplicity, and clarity have boosted their popularity. Because they’re discrete and measurable, there’s no confusion.
This also makes the objective setting venture itself quick and painless. OKR adherents don’t spend days and days defining and refining snappy mantras or translating top-level goals into department-specific metrics.
Another benefit is there is organization-wide transparency. Everyone in the company knows what they’re working to achieve. They have clear results that are widely socialized.
And, since they’re usually reset or revisited quarterly, OKRs naturally adapt as the company does. They don’t lose their relevance or lock the company into long-term predictions and expectations that no longer match the reality of the situation on the ground.
Who’s using them (and how)?
Google is the most famous adherent and has been using OKRs since the company’s founding in 1999. Many other tech companies have adopted them since, including Spotify, Twitter, LinkedIn, and Airbnb. Even some non-tech companies now use OKRs, including retail giants such as Target and Walmart.
After Blogger was acquired by Google, Rick Klau had an objective to improve Blogger’s brand awareness. The key results he selected were:
- Speak at three industry events
- Use Blogger’s 10th birthday as a PR opportunity
- Identify and personally contact top-end users
- Avoid having to take down blogs because they were illegally sharing music
- Create a Twitter presence and be active participants
At Buffer, a company always experimenting with different management styles, their initial OKR experience included an objective of expanding Buffer’s reach and engaging new audiences. The key results for this objective were:
- Get 10,000 people (including 8,000 non-users) to attend a webinar
- Use three pieces of content to generate 250,000 views
- Attract 600 new people to three local events
- Research and create a proposal for a Buffer conference
- Get 125,000 listeners for a podcast
Both of the above examples illustrate how measurable those key results are. Some are binary (you did it or didn’t), while others would have a specific percentage of achievement.
Like any new initiative, communication is key to successful adoption. OKRs only work if everyone knows what they are, what’s expected of them, and how the company is progressing.
Kick things off with an initial presentation establishing the vision for the initiative. This should explain why OKRs are being introduced and what the company hopes to accomplish by using them. This should also include information about what’s not tied to the OKRs, such as individual performance and compensation.
Next up are planning sessions for setting OKRs. This includes agreeing on their time period (the standard quarterly, the shorter monthly, or a longer time period). The output is a set of objectives helping the company advance toward longer-term goals.
For each agreed-upon objective, there should be two-to-five easily measurable key results. There should also be a consensus about which method will be used to collect the required data and who will be responsible for aggregating and communicating progress.
Sharing OKR progress shouldn’t require a separate effort. Instead, incorporate this communication into standing meetings and communications.
Decide how frequently to reconvene, verify progress, and reevaluate each objective’s validity. These check-ins make sure the company isn’t pursuing short-term objectives that no longer make sense in a larger strategic context. It’s also where they can adjust key results if they’ve become unreasonable or too easy to achieve.
Finally, the OKR process itself should be assessed to ensure it’s working well. Individuals shouldn’t spend too much time on the process itself or distort their behavior in the service of OKRs. Course correction to minimize overhead is a prized element of OKR usage, reinforcing its lightweight nature.
As demonstrated by many wildly successful companies in the tech sector and beyond, OKRs can help organizations measure success and stay on target with their strategy and vision.
Breaking down big-picture goals into shorter-term, quantifiable chunks highlights the relevance of the everyday activity to corporate ambitions. With an emphasis on efficiency and transparency, OKRs keep everyone informed at all times.