OKR refers to Objectives and Key Results, a prominent goal-setting framework that aids in implementing and executing strategy. The OKR framework has several advantages, including a stronger focus on important goals, increased transparency, and improved (strategic) alignment.
OKR accomplishes this by focusing employees and their efforts on achieving common goals.
OKR has been around since the 1970s, and while Andy Grove invented the concept, it was popularised by John Doerr, one of Google’s first investors. Google quickly prioritized the OKR framework, and companies such as LinkedIn, Twitter, Dropbox, Spotify, Airbnb, and Uber have since followed suit.
OKRs can help you achieve your goals or vision by being quantifiable, adaptable, transparent, and aspirational. They’re generally determined by management and never related to pay or performance evaluations.
Finally, OKRs let companies set ambitious goals and then focus on achieving them over a quarter.
What are OKRs, and how do you apply?
According to Ben Brubaker-Zehr, founder of Meddo, OKRs are “simple and flexible,” which can be helpful or harmful depending on how they are implemented inside your firm. OKRs should be aligned with business goals and enterprise efforts, with regular check-ins to measure success throughout the quarter to avoid a “put it and forget it” approach.
Three to five high-level objectives are typically included in OKRs, with three to five critical quantifiable outputs for each target.
It’s not quite recommended to have more than five OKRs at a time, even in the largest corporations. You’ll want to keep it to three for smaller teams and businesses. Following the establishment of your objectives, you’ll track the progress of each significant result separately and refer to them frequently during the quarter.
“It’s a good tool for steering projects and initiatives in the workplace because when a project comes along that doesn’t fit within our quarterly OKRs, it’s a useful tool for directing it. We have to determine if we want to put it in and prioritize something lower or if we need to say no to this project,” explains Chen Rekhi.
An overview of OKR framework history
The OKR framework has a long history that dates back to Peter Drucker’s invention of MBO (Management by Objectives) in 1954.
Andrew Grove co-founded Intel in 1968, and while serving as its CEO, he further refined MBO into the current OKR architecture. John Doerr joined Intel in 1974, and during his time there, he learned the OKR framework.
Doerr went on to work at Kleiner Perkins Caufield & Byers, one of Google’s first significant investors, and served as an adviser to the company in its early days. Larry Page and Sergey Brin, Google’s founders, were introduced to OKR by Doer, who later applied it at Google (which still uses it today).
What are the different kinds of OKRs?
OKRs might be committed, aspirational, or learning in nature.
- Committed OKRs– It is just what their name implies: commitments. A Committed OKR is expected to receive a passing grade when graded at the end of a cycle.
- Aspirational OKRs– Stretch goals or “moonshots” are terms used to describe aspirational OKRs. Because no one has gone before, a path to an Aspirational OKR is predicted to be constructed. They might also be long-term and last beyond an OKR cycle, or they could be shared among team members to increase employee engagement.
- Learning in nature– When learning something new is the most valuable outcome of the cycle, learning OKRs are used. If a team is unsure how to proceed, they can create a Learning OKR that answers the question, “In the next 90 days, what is the most important thing we want to learn?”
When it comes to choosing aspirational or committed goals, it will depend on the company and its overall strategy. It is important that both types of goals have a unique value within an organization. When determining when to use each type of goal, you’ll be pivoting your business for success.
The Advantages of OKR framework in the Workplace
According to recent research, when groups of employees who used the OKR framework were compared to those who didn’t, those who utilized it were far more effective at their professions, resulting in higher performance and sales. Many who did not use OKR actively requested to be included in future cycles.
- Cultural advantages: In most firms without goal management, the most significant benefit of implementing OKR is a culture shift from output to outcomes. The OKR framework provides focus, accountability, openness, and alignment within an organization. As a result of all of this, employee engagement and performance have improved.
- Alignment of strategy: OKR assists managers and employees in aligning their efforts, ensuring that everyone in the organization is on the same page.
- Execution that is focused: By prioritizing only the work that has the most significant business impact, OKR helps you focus on what’s most important.
- Employees who are enthusiastic about their work: When people are engaged with a goal in mind, they produce astonishing outcomes. OKR makes it easier to express the overall picture to understand.
OKRs help managers boost interest and engagement by giving them the information they need to know who is engaged. This information can easily be accessed through a weekly OKR goals check-in process, which gives managers visibility into who’s achieving their goals. With OKRs, managers are able to build high-performing teams by empowering individuals that will then do better at their work.
Overview of the OKR Framework
OKR is a framework, but it’s also a learning process that often necessitates a fundamental shift in how people think about and measure their work, shifting away from output and toward outcomes.
- Company mission: The company mission is a concise statement of its vision and purpose and how they should be carried out.
- Mid-term objectives: The link between the firm mission and the OKR is the mid-term goals (also known as MOALS). They are typically set for a year.
- OKR PLANNING: The aim and critical results are specified throughout the entire cycle and at all levels during OKR Planning. This is done from the top-down as well as the bottom-up.
- OKR WEEKLY: The OKR Weekly encourages self-responsibility as a solid ritual of the teams during the cycle by synchronizing the target and critical results implementation. The weekly should take no more than 15 minutes and should provide an overview of the OKR’s current condition.
- OKR review: At the end of an assessment cycle, review sessions are conducted to determine the degree of achievement. The scoring should be in line with the team’s expectations.
- RETROSPECTIVE ON THE OKR PROCESS: The teams systematically examine the OKR process during a retrospective. What did the group discover? What aspects of the next cycle should be improved?
- OKR COACH – OKR Coaches serve as experts, coaches, facilitators, and change agents for their teams, assisting them in defining OKRs and other regular events.
Objectives and Key Results (OKR) is a goal-setting framework that helps organizations define goals – or objectives – and then track the outcome. The framework is designed to help businesses establish far-reaching goals in days instead of months, weeks, even hours.
The OKR Framework’s Life Cycle
There are several possibilities to improve teamwork, communication, and strategic goals during each cycle. The following occurrences are beneficial:
Weekly OKR Planning OKR Review OKR Retrospectives
Unless the organization is confronted with an unexpected and significant incident to which it must respond, objectives and key results are rarely revised during the cycle.
However, this is unusual; most reviews and retrospectives reveal areas where the next cycle might be improved.
It takes time to adopt the OKR framework in a corporation long-term. To receive the full pull from OKR typically takes 3-4 cycles. A well-thought-out implementation strategy can significantly speed up the learning process.
Measures such as in-house training, OKR Coach training, orientation seminars, expert-moderated planning, review, and retrospectives improve the quality and pace of learning.
It’s crucial to remember to keep your head down and be willing to make mistakes and learn new things!
How to Set Objectives and Key Results for Your Team
Step 1- set the scene
Introduce or reintroduce OKRs to your team, explaining how they are rated and how it affects their performance.
Tell them that OKRs are supposed to be ‘uncomfortable’ and that it’s OK to set a lofty goal and fall short of it (as long as they are making progress, of course).
Step 2: Make a list of your goals
Encourage everyone on your team to engage in the brainstorming session. Your team’s objectives should align with the senior objectives (company objectives).
Make a list of three to five aspirational goals.
Step 3: Make a list of your most important outcomes
Make a list of the measurable results that show whether you’ve met your goals. Keep in mind that you’re not working on a project. You’re dealing with effects.
Step 4: Examine and evaluate
As you go through your initial list, you may find yourself modifying your objectives or actual results. If you’re 100 percent certain you’ll meet your KRs, you’re not being ambitious enough, and you’re still in the safe zone,’ though. Increase your target till it becomes uncomfortably high for you. Examine and evaluate your key and results.
Step 5: Request feedback
It’s critical to get feedback, especially from those involved in the execution. They might be able to help you enhance your OKRs.
Step 6: Calculate your score
Scoring is an essential part of determining Key Results. You can use Google’s sliding scale, which ranges from 0 to 1. This numerical measure indicates whether you missed, came close, or hit your goal.
It’s worth noting that a score of Seven on a crucial outcome is deemed more successful than a score of 1.
This OKR Cheat Sheet will make adopting OKR easier for your team and company.
Most organizations have a purpose and vision, but they are frequently difficult to understand and mixed. We suggest converting your mission and vision into a long-term objective.
Moreover, you can make your OKR plans at different time intervals. For instance, once a year for company-wide goals or every quarter for team goals. Bear in mind that quarterly OKRs should align with annual ones!
OKRs (Objectives and Key Results) are an actionable way to create transparency and accountability in your organization while arming teams with a better way of setting goals. For businesses looking to scale Agile or evolve their administrative structure around value creation, organizing into value streams is key.
Corps undergoing Lean / Agile transformations will get the most out of OKRs if they use them within the structure of a value stream.