So, what is an OKR? In simple terms the abbreviation stands for “Objectives and Key Results”. In more detail an OKR can be defined as a rigorous goal setting and tracking method invented by Andy Grover and used in Intel from its early years. Andy Grover derived the concept of OKR from the teachings of Peter Drucker’s Management by Objectives.
OKR consists of two components.
- Objective: the term for the goal itself, for what you want to accomplish on whatever scale and timeline.
- Key Results: the term refers to the actionable steps that form the plan of action to reach the objective. It’s important that are steps whose effectiveness can be measured and quantified in order to realistically track the progress toward the objective.
OKR methods are not just for the leadership team in an organization but for every employee in the organization. Employees can set goals, track, and measure their progress towards goals. It puts everyone in the company right from c-suite executives to entry-level executives on the same page.
Corporate OKRs essentially break down the company’s vision, which then can be followed by departments, teams and individuals. You don’t have to use OKRs at all levels. To simplify how your OKR practice, you can choose just to use Corporate and Department OKRs. And then slowly introduce team and individual OKRs as your organization gains OKR maturity.
Vision typically defines the purpose of your organization’s existence. It can be a really long term goal, typically achievable in 4-5 years. OKRs help you to take this vision and convert them into meaningful, achievable chunks of progress. The following illustration shows how a company’s vision is broken down into multiple objectives, which then gets tracked/measured by associated key results and finally the tasks that get you to those key results.
Setting OKRs does not end with putting it on a goal journal. It is a continuous management process. You need frequent check-ins to track and measure progress, and adjust the direction and level of your effort. Check-ins show the difference between the expected result and actual result. Most OKR check-ins are done weekly, while in some cases it makes sense to check-in on a monthly, or quarterly basis.
When you use OKRs properly, you will observe that:
- All your teams and individuals are aligned with their management
- All your employees know what they are accountable for
- Self-driven teams
- Culture of transparency
These and other benefits of OKRs are summarized by the OKR Payoffs.
A well-written OKR will guide you to move on the right path with a laser-sharp focus on what matters to your business. Therefore, many successful companies have embraced OKRs and have attributed their success to OKRs. OKRs have been a part of their culture and has helped them to create a results oriented team that continually delivers results. They have observed that, when incorporating OKRs into their management process, they build a thriving, powerful team that will continuously deliver results that matter the most.