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 in the 1970s [1] and documented the framework in his 1983 book High Output Management .

Contents

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. count, 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 "grey area" when defining a key result. [3]

History

Andrew Grove popularised the concept of OKR during his tenure at Intel in the 1970s. [5] He later documented OKR in his 1983 book High Output Management . [6]

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"). [7]

Doerr, who by 1999 was working for venture capital firm Kleiner Perkins, introduced the idea of OKRs to Google. [8] 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". [7]

Doerr published a book about the OKR framework titled Measure What Matters in 2018. Grove's simple but effective concept is explained by John Doerr in his book: [7]

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: [7]

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 [9] including LinkedIn, [10] Twitter, [11] Uber, [12] Microsoft [13] and GitLab. [14]

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. [7]

Considering this, OKRs are scored on a scale of 0.0 to 1.0, with 0.7 being the normal target for "aspirational" Key Results (where the aim is to make as much progress as possible), and 1.0 being the expected target for "committed" Key Results (where the outcome is the delivery of a product or feature, meeting a deadline, or a binary "done" or "not done" status). [15]

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. [16] Words like "help" and "consult" should also be avoided as they tend to be used to describe vague activities rather than concrete, measurable outcomes. [17]

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. [18]

Ben Lamorte, author of The OKRs Field Book, suggests 5 best practices for OKRs coaches: [19]

  1. "Less is more" - define a small set of OKRs
  2. "Crawl-walk-run" - Deploy OKRs piecemeal. Begin with pilot teams rather than a full-scale deployment across an entire organization. In the first cycle, emphasize learning about OKRs. Reserve the second cycle to explore how best to scale the program,
  3. "Outcomes, not output" - Write key results that mostly reflect outcomes (results) rather than output (amount of work delivered)
  4. "OKRs are not everything" - Write OKRs that reflect the most important areas to make measurable progress rather than attempting to reflect everything you do. Distinguish OKRs from tasks and health metrics. Health metrics are monitored and important to track, but, unlike key results, they are not the focus for near-term improvement
  5. The only way to learn OKRs is to do OKRs


Once planning and crafting OKRs is done, teams have the crucial task of managing their work effectively throughout the OKR cycle. Businessperson and author Christina Wodtke recommends setting a weekly cadence to ensure progress toward the goals is achieved.

In her framework, [20] Wodtke suggests answering the following questions every Monday:

  1. What is the team's confidence in achieving the OKRs?
  2. Are the team's Health Metrics in a good place?
  3. What are the most important things to get done this week?
  4. What should the team prepare for in the coming four weeks?

Criticism

OKRs were once typically set at the individual, team, and organization levels; however, most organizations no longer define OKRs for individual contributors as these OKRs tend to look like a task list and lead to conflating OKRs with performance reviews. The motivation for starting OKRs at the company, team, and individual levels was inspired by the 2014 Google Ventures Workshop Recording in which Rick Klau explains that OKRs exist at 3 levels. Subsequently, in November 2017, Klau clarified via twitter: “6- Skip individual OKRs altogether. Especially for younger, smaller companies. They’re redundant. Focus on company- and team-level OKRs.” Additionally, there is criticism that creating OKRs at multiple levels may cause too much of a waterfall approach, something that OKRs in many ways intend to avoid. [21]

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 performance indicator (KPI) and balanced scorecard. [22]

See also

Related Research Articles

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References

  1. ↑ Bas, Andriy. "A History of Objectives and Key Results (OKRs)". Plai. Archived from the original on 29 August 2022. Retrieved 29 August 2022.
  2. ↑ Wodtke, Christina (2016). Introduction to OKRs. O’Reilly Media, Inc. ISBN   9781491960271.
  3. 1 2 "What is an OKR? Definition and examples". What Matters. Archived from the original on 24 August 2021. Retrieved 24 August 2021.
  4. ↑ Maasik, Alexander. Step by Step Guide to OKRs. Amazon Digital Services LLC.
  5. ↑ Bas, Andriy. "A History of Objectives and Key Results (OKRs)". Plai. Archived from the original on 29 August 2022. Retrieved 29 August 2022.
  6. ↑ Grove, Andrew (1983). High Output Management . Random House. ISBN   0394532341.
  7. 1 2 3 4 5 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.
  8. ↑ 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.
  9. ↑ "OKR Cycle". Enterprise Gamification. 18 October 2017. Archived from the original on 8 February 2021. Retrieved 14 August 2019.
  10. ↑ "OKR Case Studies & Stories - Learn from the best who have had success". ZOKRI . Retrieved 13 July 2021.
  11. ↑ 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.
  12. ↑ Fowler, Susan. "Reflecting On One Very, Very Strange Year At Uber". Susan Fowler Blog. Susan Fowler. Archived from the original on 20 April 2018. Retrieved 19 April 2018.
  13. ↑ Chadda, Sandeep. "6 things I learnt about OKRs @ Microsoft". Medium. Archived from the original on 8 February 2021. Retrieved 9 September 2020.
  14. ↑ "GitLab: Objectives and Key Results (OKRs)". GitLab. Archived from the original on 25 February 2022. Retrieved 25 February 2022.
  15. ↑ "How to score OKRs". OKR-Dash Blog. Retrieved 21 September 2024.
  16. ↑ "OKRs are not "BAU"". What Matters. Archived from the original on 13 August 2021. Retrieved 24 August 2021.
  17. ↑ "re:Work - Guide: Set goals with OKRs". rework.withgoogle.com. Archived from the original on 19 November 2021. Retrieved 24 August 2021.
  18. ↑ "Going from Good to Better Part 2". What Matters. Archived from the original on 13 August 2021. Retrieved 24 August 2021.
  19. ↑ Lamorte, Ben (29 October 2020). "5 mantras for OKRs coaches". The OKRs Blog. Ben Lamorte. Archived from the original on 8 September 2022. Retrieved 8 September 2022.
  20. ↑ Wodtke, Christina (16 February 2014). "Monday Commitments and Friday Wins". Elegant Hack. Retrieved 6 March 2024.
  21. ↑ 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.
  22. ↑ 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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