What are OKRs and how do they work?
by Cecilia Thirlway, on 25 Oct 2019, 15:11:25
We take a brief look at 'the simple idea that drives 10x growth', which emerged from Intel in the 1950s and famously inspired the founders of a little startup called Google.
Described by author John Doerr as 'the simple idea that drives 10x growth', OKRs (Objectives and Key Results) are the core of a management framework used by a number of high profile companies such as Google, LinkedIn, and Twitter. They were devised by leading management thinker Andy Grove, who honed his skills at Intel in the 1950s.
In a similar way to other Management by Results approaches such as the Balanced Scorecard or KPIs, OKRs are designed to ensure that everyone in a team or organisation is focused on the same objectives, know how to go about achieving them, and that it is easy to assess whether they have been successful.
By outlining each objective and its component parts in a succinct, clear manner, and then setting a (ideally numerical) verifiable measure of what success would look like, there can be no doubt about what needs to be done.
The beauty of OKRs is that they are simple and incredibly flexible, and can be used by commercial, not-for-profit, and public organisations of all shapes and sizes to focus their efforts on any kind of outcome.
Writing great OKRs
It can be helpful to think of the Objectives element of OKRs as the What - What do you want to achieve? Objectives can be highly aspirational moon-shots, or more achievable strategic aims, but they must be clearly expressed, and ideally short. They provide the direction of travel for your people's efforts, so should be focused on the outcome, not how you're going to achieve it.
Key Results, on the other hand, are the How - How will you achieve the Objective? Each Objective can (and should) have multiple Key Results, although if you find you're writing more than five then it might be worth rethinking your approach. The overriding principle of OKRs is simplicity, so on a similar note if you find yourself creating more than seven Objectives for your team or organisation then pause to consider whether you are risking splitting your people's focus too much.
One critique of OKRs is that it's easy to misuse the Key Results by expressing them as outputs rather than outcomes - for example, if your Objective is to increase the number of sales on a specific product, you might be tempted to enter a KR of 'run marketing campaign to a new audience segment'. But this KR is an output, not an outcome, because if you achieve it, it might still have no effect on the delivery of the Objective. A better Key Result here would be 'increase sales by xx by targeting new market segments'.