OKR: Goal-setting on steroids
Simple goal-setting methology for executing strategy
“A goal properly set is halfway reached.” – Zig Ziglar
In the 2018 #1 New York Times bestseller Measure What Matters – How Google, Bono, and the Gates Foundation Rock the World with OKRs, legendary venture capitalist John Doerr revealed how the goal-setting framework of Objectives and Key Results (OKRs) has helped tech giants including Intel and Google achieve explosive growth – and how it can help any organization thrive.
So what is OKR and how does it differ from earlier goal-setting processes?
What is OKR?
OKR stands for Objective and Key Results and is a tool used by individuals, teams, and companies for setting goals to focus on strategic objectives, align resources, and measure outcomes while ensuring transparency when pursuing ambitious goals. The OKR methodolgy was created by Andy Grove, former CEO of Intel, and advocated by engineer turned venture capitalist, John Doerr, who used OKRs while at Intel then taught the process to funded start-ups at Kleiner Perkins. Click here for a short video by Andy explaining the OKR process.
Objectives are what you want to achieve. They serve as beacons that signal to everyone the direction in which the business aspires to go. Objectives start with the company’s strategic objectives, filtering out to teams and individuals who create their own objectives, both cross-functionally and bottom up, while all in support of the overall strategic objectives. Objectives are memorable and qualitative descriptions that are short, motivating and engaging.
Key results describe how you are going to achieve the objectives and are quantitative. For each objective there will be 2-5 key results which are specific, calendar-based, and most important, they are measurable. According to Marissa Mayer, former Google Vice President, “If it does not have a number, it is not a Key Result.” Important to note, it is highly recommended that the number of key results is limited. Otherwise, they will not be remembered.
OKRs have a cadence that are tied to the business calendar. High level business objectives come from the annual planning process. Typically, OKRs are set on a quarterly basis and their progress reviewed to determine whether objectives were achieved or must be tweaked in the next quarter.
This quarterly “OKR cycle” is a rule of thumb and can be adjusted depending upon the needs of the business. Smaller businesses or start-ups have been known to utilize a monthly OKR cycle. Teams ensure steady progress on quarterly objectives with weekly check-ins. Focusing on time and measurement allows the progress to be tracked throughout the OKR cycle, creating a common framework for achieving big goals.
What makes OKR better?
Outcomes not tasks
“A major benefit of OKR is moving from project management to outcomes thinking,” according to Felipe Castro, OKR trainer, speaker and author. This is a critical difference between OKRs and other project management or goal-setting tools. OKRs is about measuring key results, not checking off tasks.
Castro always asks in his OKR workshops: “If you deliver all your tasks and nothing improves, are you still successful?” No, of course not. With OKRs, when you measure what’s important to the organization, you need to focus on the outcomes you want to achieve in support of the objective, not a checklist of tasks or deliverables.
Cadence of Check-ins
For acclaimed author and speaker, Christina Wodtke, “When people ask me what is the difference between OKRs and SMART* goals or other goal setting approaches, I tell them it is the cadence of check-ins. The cadence is what makes the difference between goal setting and goal achieving.”
According to Wodtke, the critical part of the process is the constant review and challenges to the OKRs in the weekly check-ins and quarterly meetings. She highly recommends “baking your OKRs into your weekly team meetings (if you have them) and your weekly status emails.”
But Wodtke cautions those getting started with OKRs, “Don’t set OKRs for everything you do. Create an OKR set for the mission-critical thing you are afraid you won’t get done.”
Good advice, for sure. If you’d like more information on how OKRs might be able to help your business, please contact me.
* SMART is a goal-setting process that ensures goals are Specific, Measurable, Achievable, Relevant, and Time bound, attibuted to George Doran, Arthur Miller and James Cunningham in their 1981 article “There’s a S.M.A.R.T. way to write management goals and objectives.”