Objectives and key results (OKR, alternatively OKRs) is a
goal-setting framework used by individuals, teams, and organizations to define measurable goals and track their outcomes. The development of OKR is generally attributed to
Andrew Grove
Andrew Stephen Grove (born András István Gróf; 2 September 193621 March 2016) was a Hungarian-American businessman and engineer who served as the third CEO of Intel Corporation. He escaped from Communist-controlled Hungary at the age of 20 ...
who introduced the approach to
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
in the 1970s.
John Doerr
L. John Doerr (born June 29, 1951) is an American investor and venture capitalist at Kleiner Perkins in Menlo Park, California. In February 2009, Doerr was appointed a member of the President's Economic Recovery Advisory Board to provide the Pre ...
published an OKR book which is called ''Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs'' in 2017.
Overview
OKRs comprise an ''objective'' (a significant, concrete, clearly defined goal) and 3–5 ''key results'' (measurable success criteria used to track the achievement of that goal).
Not only should objectives be significant, concrete, and clearly defined, they should also be inspirational for the individual, team, or organization that is working towards them.
Objectives can also be supported by initiatives, which are the plans and activities that help to move forward the key results and achieve the objective.
Key results should be measurable, either on a scale or with any numerical value (e.g. count, dollar amount, or percentage) that can be used by planners and decision makers to determine whether those involved in working towards the key result have been successful. There should be no opportunity for "grey area" when defining a key result.
History
Andrew Grove
Andrew Stephen Grove (born András István Gróf; 2 September 193621 March 2016) was a Hungarian-American businessman and engineer who served as the third CEO of Intel Corporation. He escaped from Communist-controlled Hungary at the age of 20 ...
popularised the concept of OKR during his tenure at
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
in the 1970s. He later documented OKR in his 1983 book ''High Output Management''.
In 1975,
John Doerr
L. John Doerr (born June 29, 1951) is an American investor and venture capitalist at Kleiner Perkins in Menlo Park, California. In February 2009, Doerr was appointed a member of the President's Economic Recovery Advisory Board to provide the Pre ...
, at the time a
salesperson
Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale.
The seller, or the provider of the goods or services, completes a sale in r ...
working for
Intel
Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California. It is the world's largest semiconductor chip manufacturer by revenue, and is one of the developers of the x86 seri ...
, attended a course within Intel taught by Grove where he was introduced to the theory of OKRs, then called "iMBOs" ("Intel
Management by Objectives Management by objectives (MBO), also known as management by planning (MBP), was first popularized by Peter Drucker in his 1954 book ''The Practice of Management''.Drucker, P., ''The Practice of Management'', Harper, New York, 1954; Heinemann, London ...
").
Doerr, who by 1999 was working for
venture capital
Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which ha ...
firm
Kleiner Perkins
Kleiner Perkins, formerly Kleiner Perkins Caufield & Byers (KPCB), is an American venture capital firm which specializes in investing in incubation, early stage and growth companies. Since its founding in 1972, the firm has backed entrepreneurs ...
, introduced the idea of OKRs to
Google
Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
.
The idea took hold and OKRs quickly became central to Google's culture as a "management methodology that helps to ensure that the company focuses efforts on the same important issues throughout the organization".
Christina Wodtke
Christina R. Wodtke (born October 22, 1966) is an American businessperson and specialist in the area of design thinking, information architecture and Management Science (specializing in OKR and team productivity.) She is currently a lecturer in H ...
's 2016 book ''Radical Focus'' popularised the concept of OKRs through a fable about a young startup.
Doerr published a book about the OKR framework titled ''Measure What Matters'' in 2018. Grove's simple but effective concept is explained by
John Doerr
L. John Doerr (born June 29, 1951) is an American investor and venture capitalist at Kleiner Perkins in Menlo Park, California. In February 2009, Doerr was appointed a member of the President's Economic Recovery Advisory Board to provide the Pre ...
in his book:
Larry Page
Lawrence Edward Page (born March 26, 1973) is an American business magnate, computer scientist and internet entrepreneur. He is best known for co-founding Google with Sergey Brin.
Page was the chief executive officer of Google from 1997 unt ...
, former CEO of
Alphabet
An alphabet is a standardized set of basic written graphemes (called letters) that represent the phonemes of certain spoken languages. Not all writing systems represent language in this way; in a syllabary, each character represents a syll ...
and co-founder of
Google
Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
, credited OKRs within the foreword to Doerr's book:
Since becoming popular at
Google
Google LLC () is an American multinational technology company focusing on search engine technology, online advertising, cloud computing, computer software, quantum computing, e-commerce, artificial intelligence, and consumer electronics. ...
, OKRs have found favor with several other similar large
tech organizations including
LinkedIn
LinkedIn () is an American business and employment-oriented online service that operates via websites and mobile apps. Launched on May 5, 2003, the platform is primarily used for professional networking and career development, and allows job se ...
,
Twitter
Twitter is an online social media and social networking service owned and operated by American company Twitter, Inc., on which users post and interact with 280-character-long messages known as "tweets". Registered users can post, like, and ...
,
Uber
Uber Technologies, Inc. (Uber), based in San Francisco, provides mobility as a service, ride-hailing (allowing users to book a car and driver to transport them in a way similar to a taxi), food delivery (Uber Eats and Postmates), package ...
,
Microsoft
Microsoft Corporation is an American multinational technology corporation producing computer software, consumer electronics, personal computers, and related services headquartered at the Microsoft Redmond campus located in Redmond, Washing ...
and
GitLab
GitLab Inc. is an open-core company that operates GitLab, a DevOps software package which can develop, secure, and operate software. The open source software project was created by Ukrainian developer Dmitriy Zaporozhets and Dutch developer S ...
.
Best practices
Doerr recommends that an organization's target success rate for key results be 70%. A 70% success rate encourages competitive goal-making that is meant to stretch workers at low risk. If 100% of the key results are consistently being met, the key results should be reevaluated.
Organizations should be careful in crafting their OKRs such that they don't represent
business as usual since those objectives are, by definition, not action-oriented and inspirational. Words like "help" and "consult" should also be avoided as they tend to be used to describe vague activities rather than concrete, measurable outcomes.
When coming up with key results, it is also recommended to measure leading indicators instead of lagging indicators. Leading indicators are readily measurable and provide organizations with an early warning when something isn't going right so they can course-correct. Conversely, lagging indicators are those metrics which can't be attributed to particular changes and so prevent organizations from course-correcting in time.
Ben Lamorte, author of ''The OKRs Field Book'', suggests 5 best practices for OKRs coaches: 1) "Less is more" - define a small set of OKRs, 2) "Crawl-walk-run" - Deploy OKRs piecemeal. Begin with pilot teams rather than a full-scale deployment across an entire organization. In the first cycle, emphasize learning about OKRs. Reserve the second cycle to explore how best to scale the program, 3) "Outcomes, not output" - Write key results that mostly reflect outcomes (results) rather than output (amount of work delivered), 4) "OKRs are not everything" - Write OKRs that reflect the most important areas to make measurable progress rather than attempting to reflect everything you do. Distinguish OKRs from tasks and health metrics. Health metrics are monitored and important to track, but, unlike key results, they are not the focus for near-term improvement, and 5) The only way to learn OKRs is to do OKRs.
Criticism
OKRs were once typically set at the individual, team, and organization levels; however, most organizations no longer define OKRs for individual contributors as these OKRs tend to look like a task list and lead to conflating OKRs with performance reviews. The motivation for starting OKRs at the company, team, and individual levels was inspired by the 2014 Google Ventures Workshop Recording in which Rick Klau explains that OKRs exist at 3 levels. Subsequently, in November 2017, Klau clarified via twitter: “6- Skip individual OKRs altogether. Especially for younger, smaller companies. They’re redundant. Focus on company- and team-level OKRs.” Additionally, there is criticism that creating OKRs at multiple levels may cause too much of a
waterfall approach, something that OKRs in many ways intend to avoid.
Similar frameworks
There is an overlap with other
strategic planning
Strategic planning is an organization's process of defining its strategy or direction, and making decisions on allocating its resources to attain strategic goals.
It may also extend to control mechanisms for guiding the implementation of the st ...
frameworks like
Objectives, goals, strategies and measures
Objectives, goals, strategies and measures (OGSM) is a goal setting and action plan framework used in strategic planning. It is used by organizations, departments, teams and sometimes program managers to define and track measurable goals and act ...
(OGSM) and
Hoshin Kanri Hoshin Kanri (Japanese: 方針管理, "policy management") is a 7-step process used in strategic planning in which strategic goals are communicated throughout the company and then put into action. The Hoshin Kanri strategic planning system originate ...
's X-Matrix. OGSM however explicitly includes "Strategy" as one of its components.
In addition, OKRs overlap with other
performance management
Performance management (PM) is the process of ensuring that a set of activities and outputs meets an organization's goals in an effective and efficient manner. Performance management can focus on the performance of a whole organization, a d ...
frameworks, sitting somewhere between
performance indicator
A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it en ...
(KPI) and
balanced scorecard
A balanced scorecard is a strategy performance management tool – a well structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from t ...
.
See also
*
Management by objectives Management by objectives (MBO), also known as management by planning (MBP), was first popularized by Peter Drucker in his 1954 book ''The Practice of Management''.Drucker, P., ''The Practice of Management'', Harper, New York, 1954; Heinemann, London ...
*
Objectives, goals, strategies and measures
Objectives, goals, strategies and measures (OGSM) is a goal setting and action plan framework used in strategic planning. It is used by organizations, departments, teams and sometimes program managers to define and track measurable goals and act ...
(OGSM)
*
Key performance indicator
A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it eng ...
(KPI)
*
Balanced scorecard
A balanced scorecard is a strategy performance management tool – a well structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from t ...
*
SMART criteria
S.M.A.R.T. is a mnemonic acronym, giving criteria to guide in the Goal setting, setting of goals and objectives that are assumed to give better results, for example in project management, employee-performance management and personal development. T ...
* Goal Question Metric (
GQM)
References
{{Use dmy dates, date=May 2019
Business terms
Google
Intel
Strategic management