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A simple guide to OKRs

Roly Walter
14th November 2018

What are OKRs?

OKR stands for Objectives and Key Results. These were developed by IT giants Intel in the late 1990s, building on traditional performance management approaches. OKRs have since been adopted by many companies in Silicon Valley, most notably Google. They were designed to encourage more creative thinking, inspiring employees to work more collaboratively, pushing them to achieve better results.

Objectives should be SMART, inspirational, engaging, motivational and challenging.

Key Results should be quantitative and measurable.

Each objective should be measured against between two and five key results.

The typical structure of an OKR is:

“I will (objective) as measured by (set of results)”

The objective should describe the task and the set of results is how it will be measured. OKRs should be written in clear and simple language that everyone can understand.

How do they work?

Employees, with the support of their managers, set and review their objectives on a quarterly basis. This means employees are focused on the immediate future and their objectives are unlikely to become out of date or irrelevant. The company sets longer term goals, Strategic OKRs, for the business, which could be for two, five or even 10 years. Employees should know what these strategic OKRs are when setting their own objectives, to ensure they are compatible with these longer term aims.

What makes OKRs different?

Public

Unlike traditional objectives, OKRs are designed to be completely transparent. Everyone’s objectives, from the CEO downwards are made public, for anyone in the company to view. All objectives should be aligned with the overall company strategy, with the idea that everyone is moving in the same direction.

Ambitious

As these objectives are designed to be challenging and inspirational, employees aren’t expected to achieve them all. On average, employees will achieve between 60% and 80% of their objectives. This pushes employees to think creatively, consider different ideas and inspires them to achieve their best possible work.

Simplicity

The process around OKRs is meant to be as light weight as possible. A minimum amount of time should be spent setting objectives, meaning that more time can be spent achieving them.


Agile

There is no one right way to implement OKRs. Each business should adapt them to fit their own unique culture and set up. As the review cycle is much shorter, organisations can be nimble, reacting to events and changing their tactics accordingly much more quickly.

Not cascaded

Goals are not cascaded up and down the various levels of the organisation. Everyone has their own OKRs that relate to their function. These are specific to the role and should be in harmony with the rest of the organisation but will not be exactly the same as anyone else’s.

Not related to rewards

For ambitious goals to work, it’s vital that employees aren’t penalised for not reaching them. This will encourage them to keep challenging themselves and not be worried about losing out on a pay rise or bonus if they fall short. Companies like Intel, who use OKRs look at a range of factors including business impact and management effectiveness to determine how to reward employees.


What is V2MOM?

V2MOM was also created in California by Marc Benioff at Salesforce, the leading CRM platform. It stands for Vison, Values, Methods, Obstacles and Measurables.This is set at the top of the organisation, to give a clear view of the company’s purpose, what they want to achieve and how they plan to do this. All goals should then be set with the company’s V2MOM in mind and, like OKRs, be made public across the organisation to ensure everyone is working to achieve the same results.


Becoming Google or Intel is not realistic for most organisations but learning from their thinking and adopting aspects of OKRs which best fit with your workforce and culture could make a significant difference. Whatever approach you decide to follow, it’s vital that employees are made to feel included. Making changes should not be expected to happen overnight. It’s a journey, that everyone in the company needs to go on together and feel comfortable with the ride.