What are Objectives and Key Results
The OKR system came originally from Intel and was quickly adopted by Google when the investor John Doerr introduced it to the company when the company was less than one year old. Google has been using it ever since. It is a simple way of creating structure and aligning teams and individuals so everyone in the organisation focuses on what really matters.
Objective… is Qualitative
The objective should describe what you want to achieve, it should be ambitious and somewhat uncomfortable.
Key result… is Quantitative
The Key result should describe how you will achieve the objective. It should be Specific, Measurable, Actionable, Realistic and Time-bound (S.M.A.R.T)
Adding measurable goals makes it easier to objectively evaluate the performance, it’s easy to understand and it communicates exactly what’s important to the company.
Objective: “Share my knowledge and experiences with the rest of the company and industry”
Key Result: “Contribute to company blog tech.vg.no”
This is a vague key result because I will achieve the objective if I write 100 or just 1 blogpost.
A better and more measurable key result would be “Write 1 blogpost on tech.vg.no every month”
It is important to focus on the quality of the OKRs rather than quantity. Focus on the key things you need to do do to achieve your business goals. Some key results will be more important than others.
How does it work?
OKRs are set at the company, team and individual level.
- Company: The company OKRs give the big picture and set the direction and focus for the entire company.
- Team – Team OKRs define the priorities for the team. Not all sub team OKRs are represented in the company OKRs.
- Individual – Define your own OKRs based on what you are working on, negotiate and balance your OKRs with what the company and your team wants you to work on.
OKRs should not be tied to performance reviews/compensation. Keeping them separated encourages team members to set aspirational OKRs, tying them together stunts innovative thinking and leads to sandbagging.
The OKRs for the coming quarter are developed and finalised at the start of each quarter. Teams need to decide on their own OKRs. Their objectives should be based on the overall objectives for the organisation, based on the results from the last quarter and objectives need to be synced and agreed upon between dependent teams. OKRs determined at a team level can contribute and help define the overall objectives for the company. People working in teams with different competencies are often in a unique position to use their knowledge to contribute to the overall strategy for the company. Transparency and collaboration is important to land on the optimal set of goals for the whole organisation.
Individual OKRs are based on personal goals and on team and organisational objectives the individual can contribute to.
At the end of the quarter OKRs are graded. The sweetspot is achieving 70% of your objectives. If you consistently achieve 100% you are not being ambitious enough with your OKRs.
By systematically evaluating performance you will naturally see what areas are working and should be expanded on and what areas can be reevaluated or dropped.
What are the benefits of and the potential pitfalls of OKRs
- Enforces/encourages disciplined thinking. The major goals will automatically surface.
- Communicates accurately. It lets everyone know whats important for the organisation.
- Establishes indicators for measuring progress. It shows how far along we are and what we have left to achieve our goals
- Focuses effort. Keeps employees and teams in step with each other
- Inspires confidence that everyone is working together and that everyone knows exactly what everyone else is working on. Aligns multiple teams towards working on common goals
- You get what you measure. People will only focus on the written OKRs and not what you want to achieve in a larger perspective.
- Limiting creativity. Teams might feel too focused on OKRs and forget to try new things or adjust when needed.
- It’s not always easy to distinguish an objective from a key result or a key result with a simple task but with time your ability to define objectives and key results that make sense for you and your team will become easier. Try to keep the metrics out of the objective.
OKRs will not work for every organisation but if it fits yours it can be an effective, simple, unifying and motivational tool for making everyone in your organisation focus on what really matters.
OKRs – Schibsted learning lab e-book
Goal Summit 2015: Why Goals Matter with John Doerr
Startup lab workshop: How Google sets goals