19 Feb The Power of OKRs: How Objectives and Key Results Can Transform Your Company
OKRs, aka for Objectives and Key Results, have become an extremely popular framework for goal setting and strategic planning in companies and organisations over the past decade. Originally developed in the 1970s at Intel by Andy Grove and then popularised by John Doerr of Kleiner Perkins in the late 1990s, OKRs provide a simple but powerful way to set ambitious goals and measure progress towards achieving them. In this blog post, I’ll dive into what OKRs are, why they’re so effective, and how any company can implement OKRs to drive growth and performance.
What are OKRs?
OKRs stand for Objectives and Key Results. Objectives are the big, hairy, audacious goals that a company wants to accomplish. Key Results are the specific, measurable markers that track progress towards achieving an Objective. Some key features of OKRs:
– They are meant to stretch the organisation and push people outside their comfort zone. The goals should seem somewhat unrealistic at first. Intel set a goal in the 1970s of becoming “the largest semiconductor company in the world” despite only having 2% market share at the time.
– They are transparent and visible to the entire organisation. This alignment helps everyone work towards the same priorities.
– They are short time-bound goals, typically set on a quarterly or monthly basis. This cadence creates a constant pace of progress and planning.
– Objectives should be inspirational and qualitative rather than quantitative. For example “Launch the new website” rather than “Increase traffic by 25%”.
– Key Results are quantitative and measurable metrics to benchmark progress against the Objectives.
Why Are OKRs Effective?
There are several reasons why OKRs have proven to be such an effective goal-setting framework since their inception in the 1970s:
– Focus & Alignment – OKRs rally all employees around a common set of goals and priorities. This focus ensures efforts stay aligned across the organisation.
– Transparency – Open and public OKRs enable every employee to see organisational priorities and how their work ladders up to those goals.
– Accountability – Regular check-ins on OKR progress creates accountability within teams to hit their targets.
– Stretch Goals – With OKRs, employees are encouraged to set ambitious goals beyond what seems immediately achievable. This pushes innovation and creativity.
– Agility – Short quarterly OKR cycles allow goals to be adapted quickly in response to changing market dynamics.
Implementing OKRs at Your Company
Rolling out OKRs at an organisation requires careful planning and communication. Here are some best practices:
– Secure executive buy-in at the outset and align leadership around using OKRs. Google made OKRs a core practice starting in 1999.
– Provide training on OKRs and clarify expectations about their use. Many companies use specialised software like Betterworks or Weekdone to track OKRs.
– Start by piloting OKRs with a small number of teams rather than the whole company. Expand implementation gradually.
– Keep the number of objectives small (3-5 per team) to maintain focus. Too many objectives dilute priorities.
– Have teams develop their own OKRs aligned to company goals rather than dictating them top-down.
– Schedule regular check-ins to monitor OKR progress. Use tools to enhance transparency.
– Recognise that it takes time to become proficient at setting great OKRs. Progress will come with practice. Allow 6-12 months to become fully comfortable.
– Link OKRs to employee performance management and goal setting processes, but don’t tie compensation directly to OKR achievement.
OKRs offer a straightforward way to cascade company goals into priorities for teams and individuals. They provide alignment, accountability, and agility to help organisations execute on strategy and drive better performance. By implementing OKRs thoughtfully over time and integrating them into operations, any business can start to reap the benefits of this powerful goal-setting framework.
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