I always liked to read, but in the last couple of years I have been reading more books about leadership and management. One of the best I have been reading is the New York Times bestseller “Measure What Matters” by John Doerr. It is a very engaging book about a simple, but extremely effective goal setting technique called OKRs—Objectives and Key Results.
The development of OKRs is generally attributed to Andy Grove who introduced the approach to Intel during his tenure there and explained how he applied them in his 1983 book High Output Management.
In 1975, John Doerr participated in a course within Intel taught by Andy Grove where he was introduced to the theory of OKRs. In 1999 Doerr, while working for a venture capital firm, introduced the idea of OKRs to a start-up called Google. The idea was well received and OKRs quickly became central to Google’s culture.
Larry Page, the CEO of Alphabet and co-founder of Google, credited OKRs within the foreword to Doerr’s book: “OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of ‘organizing the world’s information’ perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most.”
Since becoming popular at Google, OKRs have been used and is still used with great success by many other organizations, including the Gates Foundation, Twitter, LinkedIn, Spotify, and Airbnb, and more.
An Objective is simply what needs to be achieved, a clearly defined goal, the “WHAT”, and Key Results are specific measures used to track the achievement of that goal, the “HOW”. Key Results should be specific, time-bound, and measurable.
The purpose of OKRs is to align company, team, and personal goals to measurable results while having all team members and leaders work together in a unified direction. To achieve this result is essential that Objectives and Key Results be public, so that everyone moves towards the same goals and is aware of what others are working on.
The keys to success with OKRs are transparency and alignment. Right from the CEO to managers and colleagues, an employee can see everybody else’s OKRs in the organization. Transparency increases openness and help overcome conflicts and redundancies. OKRs need to be aligned vertically and horizontally, allowing employees to understand how their work connects with the organization’s goals.
Key Results at one level become Objectives of the next level, like in this example: Let’s say a franchise with 50 stores wants to increase the number of stores.
To answer the question, “WHAT I want to achieve”? the CEO of the company, may set a few objectives including this one: Increase the number of stores by 30%
“To answer the question, “HOW I will achieve my objective?” the CEO of the company will set up key results for each objective.
- Select 50 new franchise candidates by February
- Sign contracts with 35 of them before July
- Open 30 stores before October
Each one of these key results will then become an objective for one or more of the departments of the organization.
Just to make sure that you will not forget the benefits of OKRs, John Doerr describes in his book what he calls the four OKRs “superpowers”:
- Focus and commit to priorities: OKRs give the focus needed to win by forcing leaders to make choices and define priorities.
- Align and connect for teamwork: Because of OKRs transparency, everybody’s goals are openly shared and each contributor is connected to the organization’s success.
- Track for accountability: OKRs are driven by data, so that when those data show that a key result is not being achieved, they trigger action to get it back on track, or to revise or even replace it, if needed.
- Stretch for amazing: OKRs motivate to excel and test limits.
OKRs are typically part of the quarterly planning process. While the majority of OKR usage is quarterly, some companies will also set annual or monthly OKRs.
John Doerr’s book is filled with focused example of how the implementation of OKRs have helped many organizations to be successful.