OKR stands for Objectives and Key Results and is an effective goal-setting and leadership tool for communicating what you are looking to accomplish and what milestones you will need to meet in order to do so. They are used by some of the world’s most prominent and leading organizations to set and then enact their strategies. So let us take a look at how they are used and provide some good examples of OKRs.
As previously mentioned, OKR is an acronym for Objectives and Key Results and is a performance management framework designed to encourage the setting of challenging, ambitious goals with measurable results. So, OKRs are how you track any progress made, create alignment, and encourage full engagement around the measurable goals.
Whether you are talking about software engineering, office operations, nonprofits, or something else, OKRs work in the same manner for setting goals throughout many company levels. For example, if you are interested in sales OKRs, you can easily set them all up with the help of a very useful website that does all the heavy lifting for you. OKRs can also be used for personal goals and by individuals.
OKRs are broken into two components, objectives and key results, to no one’s surprise. They are generally written with an objective at the top and then 3–5 supporting key results below, resembling the structure of an essay. This can look like this: “I will (Objective) as measured by (Key Results).” An objective is basically what needs to be achieved and is by definition significant, concrete, and ideally inspirational. When they are properly designed, they can be highly effective against confused thinking and ineffective action.
Key results are how we measure and monitor how to get to the objective we have set. The most effective key results are those that are specific and time-bound, realistic but aggressive. Most importantly, they are verifiable and measurable, a lot like mathematics. There is no place for questions or gray area under the KR’s criteria, which is extremely satisfying for any organization that wants to operate fast and effectively with no time for arguments or lengthy disputes. Where the objective is often long-lived, key results can often evolve as the work progresses, and once they are all complete, the objective is achieved.
Who created OKR?
The OKR framework was created by Andy Grove at Intel, who then taught it to John Doerr, and since then many companies have adopted it as well, including Google, Allbirds, even Netflix, and nonprofits like Code for America. “Management by Objectives” was the brainchild of Peter Drucker, which provided Andy Grove with a basis for his eventual creation of OKRs. His initial name for them was actually iMBOs, for Intel Management by Objectives, but despite the name, Grove created some very important differences between the two, which he later passed along to John Doerr, such as always using the term “key results,” a term he seems to have coined himself when mentioning Objectives.
This is a good example of a personal OKR:
- O: Run a 10K in under 60 minutes by June
- KR1: Go for a run 3 times a week for at least 30 minutes
- KR2: Increase the distance run by 1 mile every week
- KR3: Increase the mile speed by 5 seconds every week.
Types of OKRs
There are three things OKRs can be: Aspirational, Committed, and Learning OKRs.
Aspirational OKRs are sometimes also called “moonshots” and are often long-term, beyond the typical OKR cycle. Committed OKRs are exactly what the name suggests: commitments, and when graded at the end of a cycle, it is expected to have a passing grade. And Learning OKRs can be compared to when the journey was the goal, not the destination. They are more about learning something new and seeing it as the most valuable outcome. They are often used when a team is not sure how to proceed and can later evolve into a Committed or Aspirational OKR.
Yes, this all sounds frightfully dull and dry and impossibly complicated, but if you are looking for an efficient way to manage your business and see your goals and objectives achieved, Objective and Key Results could just be the thing you have been looking for. Give it a chance, get together with your team, discuss and communicate clearly, and begin to think up an OKR, and you shall quickly see the fruits of your labors bloom. We hope this article will be helpful in understanding all the benefits the implementation of OKR in your business may bring.