I find it increasingly challenging to stay aligned with the company and team goals of a modern business organization. The reason is simple, I believe we live in super fast paced times and it has become imperative for a business to make swift turns on its path to success. This is why OKR seems to be an excellent (and proven) system to align and quickly adapt to change while at the same time measuring results.
OKR is an abbreviation for Objective & Key Result. The concept comes initially from Intel Corporation and is well known for being used amongst the biggest technology companies like Google and Uber.
OKRs are meant to set strategy and goals over a specified amount of time for an organization, teams and individuals.
At the end of a set period, the OKRs provide a reference to evaluate how each piece of the organization did in executing the objectives.
If you have an hour and half I recommend to watch Rick Klau’s video on the topic. If you don’t, take a look at my notes on the topic. Credit goes to Rick but there is plenty of examples and resources on the topic.
The OKR starter hints:
- Works well if OKRs are publicly available to the entire company.
- Do not turn them into performance evaluation.
- Set, reviewed, and revised quarterly (and annually).
- Initiated or at least supported by the management.
- Try to do with ready tools. There are plenty of them e.g. Perdoo (Made in Berlin), BetterWorks, 7geese.
Objectives (the WHAT you want to achieve):
- Cannot exceed 5 in total.
- Must be strategic.
- Not necessarily measurable (e.g. grow profit margins).
- Should cascade – relate to the OKRs one level up and same time to what the individual wants to work on.
- Mostly (60%) set by the individual.
- Should get a score.
Key results (the HOW you know you have achieved your objective):
- Must be measurable (e.g. launch a new feature; reduce defects by x%).
- Should be hard to achieve so there is a substantial effort.
- Are graded quarterly (should average 0.6 or 0.7 so it is fairly hard to get 1; 0.4 or below is bad, but a learning opportunity, not a failure)
- Max. 4 key results per objective
Jason Carlin summed it up quite well:
The most useful thing I was ever told about writing effective OKRs is “Key Results must describe outcomes, not activities. If your KRs include words like ‘analyze’, ‘help’, ‘participate’, they’re describing activities. Instead, describe the end-user impact of these activities. ‘Publish latency measurements from ADR ad serving study by March 7th; is better than ‘assess ADR latency’.”
As said there is plenty being said about the topic. If you are sensitive on your spend, try to work out your OKRs using tools like the Startup OKR template. For established businesses I would recommend getting a coach and a good tool to get you started (Perdoo, BetterWorks).