OKR (from the English Objectives and Key Results "goals and key results") is a method used in modern management for project management. Allows you to synchronize team and individual goals and provide effective control over the implementation of tasks. The OKR method was developed at Intel Corporation, after which it became widespread in a number of large technology companies, including Google, LinkedIn, Zynga.
When to use
- Lack of understanding how specific role or team affects business results (what benefits, how to measure)
- It is difficult to prioritize different areas of work - we are drowning in the routine
- organization of a flexible, focused, coordinated movement towards clear and ambitious goals;
- formation of the organization's strategy and the system for its implementation;
- determination of operational planning periods;
- Creation of vertical and horizontal alignment in the company;
- setting clear goals and key results;
- definition of numerical indicators of achievement of key results;
- development of a "road map" for the implementation of the system of goals and key results (OKR) in the organization;
- Development of a change management plan.
How to use
There are many use cases for OKRs, and each company or team can customize them to create more and more variations. But there are some general principles.
Instead of using static planning for the year ahead, OKR follows an Agile approach. By using shorter goal-setting cycles, companies can more easily adapt and respond faster to market changes.
In Intel's original model, goals were reviewed on a monthly basis, which required the goal setting process to be exceptionally easy. Therefore, OKRs are easy to understand and easy to use.
Companies that have implemented OKRs are reducing the time it takes to set goals from months to days, and as a result, spend resources not on discussion, but on achieving goals.
The main objective of OKR is alignment within the organization. To do this, OKRs are made public at all levels, and each employee is given access to all set OKRs. The CEO's OKR is usually posted on the Intranet.
OKR takes into account that strategy and tactics exist at different frequencies, and the latter changes much faster. To resolve this discrepancy, OKR applies two rhythms:
- Strategic cadences with high-level and longer-term OKRs for the company (usually annual).
- Tactical cadences with shorter OKRs for teams (usually quarterly).
- Operational cadences to track results and initiatives (usually weekly).
Bidirectional Goal Setting
Instead of the traditional top-down, time-consuming, value-adding waterfall model, OKR uses a two-pronged, market driven approach.
By knowing the company's strategic OKRs, teams better understand how they can interact to align with the overall strategy. In such a process, about 60% of the tactical OKRs that are set by the teams are aligned with the strategic goals of the company, and then fixed with the managers from the bottom up.
This model increases the engagement of employees and their understanding of the strategy as a whole, and the process becomes quick and simple.
According to the OKR philosophy, if a company always achieves 100% of all stated goals, then they are too simple.
Instead, OKR encourages the setting of inspiring and ambitious goals and believes that teams can set themselves ambitious performance goals that require them to rethink their current ways of working to achieve them.
The separation of OKRs and rewards/promotions is very important for setting ambitious goals. It is very difficult to set ambitious goals if you keep in mind that the bonus will need to pay for the child's college. Employees must be sure that they will not lose their money if they set an overly ambitious goal.
OKR is a management tool, not a personnel assessment.
What you get
Shorter planning cycles allow for more frequent adjustments, improve responsiveness to change, and encourage innovation while reducing risk and waste.
Alignment and cross-functional interaction
Having shared OKRs improves communication between teams, resolves internal interdependencies, and unifies competing initiatives.
Shorter goal setting time
The simplicity of OKRs speeds up and simplifies the process of setting goals, significantly reducing the time and resources required.
Through transparency and simplicity, teams better understand the goals and priorities of the organization as a whole, as well as the contribution that each individual member can make.
The bottom-up approach used with OKRs connects individuals to the company's goals, increasing their engagement.
Independence and responsibility
Teams get clear direction and can choose what to do to reach their OKRs. They take responsibility for their goals, with clear criteria for success known to the entire company, which creates mutual commitment.
Focus and discipline
Having a small number of goals allows the organization to focus on selected initiatives and direct efforts in a more targeted manner.
Separating OKRs from rewards, as well as using stretchable goals, allows teams to set bold goals.
More information and resources
Radical Focus SECOND EDITION: Achieving Your Goals with Objectives and Key Results
Radical Focus SECOND EDITION: Achieving Your Goals with Objectives and Key Results - Kindle edition by Wodtke, Christina, R. Download it once and read it on your Kindle device, PC, phones or tablets. Use features like bookmarks, note taking and highlighting while reading Radical Focus SECOND EDITION: Achieving Your Goals with Objectives and Key Results.
The OKR Origin Story: A closer look at the man who invented OKRs.
Learn about Andy Grove to take a closer look at the man who invented Objectives and Key Results (OKRs).
- OKR book Intel