OKR

Objectives and key results (OKR) is a goal-setting framework for defining and tracking objectives and their outcomes.

Overview

The development of OKRs is generally attributed to Andy Grove the "Father of OKRs", who introduced the approach to Intel during his tenure there and documented this in his 1983 book High Output Management.[1] Grove's simple but effective concept is explained by John Doerr: "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."[2]

OKRs comprise an objective—a clearly defined goal—and 3–5 key results—specific measures used to track the achievement of that goal.[3] The goal of OKR is to define how to achieve objectives through concrete, specific and measurable actions.[4] Key results can be measured on a 0–100% scale or any numerical unit (e.g. dollar amount, %, items, etc.). Objectives should also be supported by initiatives, which are the plans and activities that help to achieve the objective and move forward the key results.[5] It is recommended that your 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, key results should be reevaluated.[2]

History

In 1975, John Doerr, at the time a salesperson working for Intel, attended a course within Intel taught by Andy Grove where he was introduced to the theory of OKRs[2], then called "iMBOs" for "Intel Management by Objectives."

In 1999, Doerr, who by then was working for Kleiner Perkins—a venture capital firm, introduced the idea of OKRs to a start-up Kleiner Perkins had invested in called Google.[6] 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."[2] Doerr also published a book about the OKR framework titled Measure What Matters in 2017.

Larry Page, the CEO of Alphabet and co-founder of Google, credited OKRs within the foreword to Doerr's book: "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."[2]

Since becoming popular at Google, OKRs have found favour with several other similar tech start-up organisations[7] including LinkedIn,[8] Twitter,[9] Gett and Uber.[10]

OKRs may be shared across the organization with the intention of providing teams with visibility of goals with the intention to align and focus effort[3]. OKRs are typically set at the company, team, and personal levels although there is criticism[11] on this causing too much of a waterfall approach, which, OKRs, in many ways, tries to be the opposite.

OKRs overlap with other performance management frameworks, in terms of complexity, sitting somewhere between KPI and the balanced scorecard.[12]

The key benefits of OKRs are focus, alignment and engagement.

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See also

References
  1. Grove, Andrew (1983). High Output Management. Random House. ISBN 0394532341.
  2. 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.
  3. Wodtke, Christina (2016). Introduction to OKRs. O’Reilly Media, Inc. ISBN 9781491960271.
  4. Calin, Denis (3 February 2019). "What is OKR?". Retrieved 3 February 2019.
  5. Maasik, Alexander. Step by Step Guide to OKRs. Amazon Digital Services LLC.
  6. 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.
  7. "OKR Cycle". Enterprise Gamification.
  8. "The Management Framework that Propelled LinkedIn to a $20 Billion Company". First Round Review. Retrieved 10 January 2014.
  9. Wagner, Kurt. "Following Frat Party, Twitter's Jack Dorsey Vows to Make Diversity a Company Goal". recode. Vox Media, Inc. Retrieved 3 November 2015.
  10. Fowler, Susan. "Reflecting On One Very, Very Strange Year At Uber". Susan Fowler Blog. Susan Fowler. Retrieved 19 April 2018.
  11. Formgren, Johan (15 October 2018). "Power of making a difference at work – Blog Article". Its in the Node. Retrieved 15 October 2018.
  12. Davies, Rob (9 October 2018). "OKR vs Balanced Scorecard – Paul Niven Explains the Difference". Perdoo GmbH. Retrieved 3 December 2018.

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