OKR has been around since the 1970s. The concept was created by Andy Grove, but popularized by John Doerr, who was one of the earliest investors in Google. Their philosophy is: "it almost doesn't matter what you know, execution is what matters the most". Objectives and key results (OKR) is a goal-setting framework that helps organizations define goals — or objectives — and then track the outcome. The framework is designed to help organizations establish far-reaching goals in days instead of years. Every quarter Google-employees create their OKR's and publish them visible for everyone. It's not used for bonuses or promotion, it's used for a higher purpose and that's to get collective commitment to truly stretch goals.
What are objectives?
Objectives are ambitious and may feel somewhat uncomfortable. "What do I want to accomplish?" is the main question you should ask when setting up objectives. Objectives should be significant, concrete, action-oriented and inspirational. An other important part about OKRs is their transparency. When bringing OKRs to an organization, it can be helpful to be clear about why they can be helpful, what they are and how they will be used.
Tips for setting objectives:
- Pick just three to five objectives - more can lead to over-extended teams and a diffusion of effort.
- Avoid expressions that don’t push for new achievements, e.g., “keep hiring,” “maintain market position,” “continue doing X.”
- Use expressions that convey endpoints and states, e.g., “climb the mountain,” “eat 5 pies,” “ship feature Y.”
- Use tangible, objective, and unambiguous terms. It should be obvious to an observer whether or not an objective has been achieved. It shows that more specific goals can result in higher performance and goal attainment.
What are key results?
Your key results need to explain how certain tasks will produce desired results. Good key results are specific and time bound, aggressive yet realistic, measurable and verifiable. Avoid turning your key results into a to-do list, instead focusing on outcomes related to business priorities. Key results are measurable and should be easy to grade with a number (Google uses a scale of 0 – 1.0). "How will I pace myself to see if I am getting there?" This answer provides the milestones, or key results.
Tips for setting key results:
- Determine around three key results per objective.
- Key results express measurable milestones which, if achieved, will directly advance the objective.
- Key results should describe outcomes, not activities. If the key results include words like “consult,” “help,” “analyze,” “participate,” they’re describing activities. Instead, describe the impact of these activities, e.g., “publish customer service satisfaction levels by March 7th” rather than “assess customer service satisfaction.”
- Measurable milestones should include evidence of completion and this evidence should be available, credible, and easily discoverable.
Things to consider when grading OKRs:
- The sweet spot for OKRs is somewhere in the 60-70% range. Scoring lower may mean the organization is not achieving enough of what it could be. Scoring higher may mean the aspirational goals are not being set high enough.
- OKRs are not synonymous with performance evaluation. Rather, they can be used as a summary of what an individual has worked on in the last period of time and can show contributions and impact to the larger organizational OKRs.
- Publicly grade organizational OKRs.
- Check in throughout the quarter. Prior to assigning a final grade, it can be helpful to have a mid-quarter check-in for all levels of OKRs to give both individuals and teams a sense of where they are. An end of quarter check-in can be used to prepare ahead of the final grading.