Primer for OKRs

For those new to OKRs, this is a very brief primer about Objectives & Key Results (OKRs).

Note: For a much deeper introduction to OKRs I recommend you read, “Measure What Matters” by John Doerr. 

What are OKRs?

OKRs stand for Objectives and Key Results.  It is a methodology used by many leading companies for improving production and efficiency within their organizations. 

As Andy Grove (former CEO of Intel and the father of OKRs) stated: “There are so many people working so hard and achieving so little.” 

OKRs were designed to help solve this problem.

Who uses OKRs?

Intel is where OKRs were born in the 1960s. Since then, top-performing companies in various industries have successfully implemented OKRs to help achieve phenomenal success. 

Successful companies using OKRs include Amazon, Dell, Dropbox, Facebook, Microsoft, Google, GoPro, LinkedIn, Oracle, Spotify, Uber, Slack, Siemens, Panasonic, Netflix, LG, GE, Salesforce, Viacom, and Twitter.

Benefits of OKRs

 They:

• help the company FOCUS and COMMIT to priorities,
• help ensure that every employee is also FOCUSED and COMMITTED to the same corporate priorities, 
• help ensure corporate-wide accountability from the CEO on down throughout the organization, and
• are designed to push everyone in the organization to do more than what they thought was possible.

What are Objectives?

The Objectives (the “O” in OKR) simply indicate “WHAT IS TO BE ACHIEVED.”

As John Doerr indicates in his book, Measure What Matters, “By definition, Objectives are significant, concrete, action-oriented and (Ideally) inspirational. When properly designed and deployed, they’re a vaccine against fuzzy thinking – and fuzzy execution.”

Companies and employees generally focus on 1-3 objectives in a given period.  It is important to remember that each time you commit to an objective, you forfeit your chance to commit to something else. 

What are key results?

Key Results (the “KR” in OKR) tell you HOW you are going to get to the OBJECTIVE. 

As John Doerr writes in Measure What Matters, “Effective KRs are specific and time-bound, aggressive yet realistic.”  “Most of all, they are measurable and verifiable; 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 gray area.“

Companies and employees generally have between 3-5 Key Results per Objective. 

Objectives & Key Results – important notes:

• It is important to understand that if all the Key Results are met, then it should achieve the desired objective. 
• All Objectives and Key Results should be MEASURABLE and TIME BOUND. Setting a specific measurable goal with a deadline has proven to be effective at driving progress. 

Transparency

OKRs are intended to be transparent. That means all members of the company from the CEO on down have OKRs that can be viewed by any other department and employee along with their progress. Transparency tears down the department silos and pushes employees to become accountable team members within the organization.  Furthermore, transparency allows for other individuals or departments to assist when needed. 

OKRs are not a performance review

OKRs are not a performance review; they are a way for each employee to gauge how well they are performing in a given period. You want employees to push themselves and set stretch goals that might not be achieved 100%. For this reason, it is best to separate OKRs from bonuses or performance reviews. 

Who should use OKRs?

OKRs are designed to be simple, flexible, and adaptable to meet the specific needs of each company. They are designed to be effective in startups or Fortune 500 companies. Furthermore, they are industry agnostic.

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If your company is serious about growth and or improved profitability, then please reach out to me.