Objectives and Key Results (OKRs) - How to Use Them and Why They Matter
Objectives and Key Results (OKRs) is a company strategy for setting goals and outcomes. OKRs increase alignment, transparency, and measurable outcomes.
What are Objectives and Key Results (OKRs)?
Objectives and Key Results (OKRs) is a company strategy for setting goals and outcomes. OKRs increase alignment, transparency, and measurable outcomes once implemented. Typically, OKRs are managed in spreadsheets or using HR software that tracks OKRs.
OKR Definition
Objectives: Objectives are goals that are qualitative, ambitious, time-bound, and actionable. “What do we want to do?”
Key Results: Key Results are tied to an objective and should be ambitious, quantitative, and difficult but not impossible.
How were Objectives and Key Results (OKRs) Created?
- 1954: Peter Drucker invented Management by Objectives (MBO)
- 1968: Andy Grove co-founded Intel and molded MBO into the OKR system.
- 1974: John Doerr joins Intel and learns the OKR framework.
- 1999: John Doerr invests in Google while working at Kleiner Perkins Caufield and Byers and becomes an advisor.
- The 2000s: Google adopts OKRs with John Doerr’s help and rises as the #1 Search Engine in the world.
- 2017: John Doerr releases Measure What Matters outlining the OKR system and how it helped tech giants from Intel to Google achieve explosive growth—and how it can help any organization thrive.
OKR Components
1. Company Objectives and Key Results (OKRs)
- 3-5 Objectives set traditionally at a yearly level.
- 3-5 Measurable Key Results tied to each Objective.
2. Department / Individual Objectives and Key Results (OKRs)
- 3-5 Objectives set traditionally on a quarterly basis.
- 3-5 Measurable Key Results tied to each Objective.
- Department and Individual OKRs should contribute to achieving the company OKRs.
Benefits of Adopting OKRs
- Focus: When you adopt OKRs, your organization focuses on the objectives you defined.
- Alignment: OKRs allow everyone to be aligned across the company.
- Tracking: OKRs move companies toward an outcome-oriented culture with measurable results.
- Stretching: OKRs should be ambitious to promote a culture of growth.
OKR Examples
Objective: Win the World Cup
Key Result 1: Average scored goals rate of 2.0 throughout the tournament.
Key Result 2: Average conceded goals rate of 0.5 throughout the tournament.
Key Result 3: Ball possession rate of 75%.
Source: Measure What Matters Training Materials
Objective: Launch website for freelance consulting
Key Result 1: Research and buy the best available domain name by July 1.
Key Result 2: Choose and implement the best CMS (content management system) by July 10.
Key Result 3: Publish the first blog post by August.
Source: whatmatters.com