What is OKR - Objectives and Key Resultst, the goal-setting system

Objectives and Key Results (OKR) is a goal-setting system that can be applied at any level, from the individual to teams and large organizations. This system ensures the achievement of very big and daring goals by reaching the Key Results established as necessary in this regard.

Therefore, we determine where we want to reach, what we need to accomplish to get there and focus on meeting the established milestones within a set time frame. Applying Objectives and Key Results (OKR) takes you out of the comfort zone and makes you learn both successes and failures. Properly applied this system helps you focus extraordinarily well and, most of the time, to accomplish much more than you ever thought possible.

How did the Objectives and Key Results (OKR) emerge?

Andrew Stephen Grove (born András István Gróf; 2 September 1936 – 21 March 2016) is known as the “guy who drove the growth phase” of Silicon Valley and also as “the father of OKR”. In his book, High Output Management (1983) has documented how he introduced the approach to Intel.
L. John Doerr (born June 29, 1951) learned about Objectives and Key Results (OKR) in 1975 while working at Intel. In 1999 he introduced the idea to Google’s leadership and in 2018 he published the book Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs, “a handbook for setting and achieving audacious goals”

OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of ‘organizing the world’s information’ perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most.
Larry Page, co-founder of Google

Objectives and Key Results (OKR), Committed vs. Aspirational

There are 2 variants of OKRs depending on the two types of goals one can set. We can have goals that must necessarily be achieved and those we know we may not complete, but we want to move forward in that regard.

Committed Objectives and Key Results are those goals whose fulfillment is very important for the company. Although they are more like business-as-usual they are needed to keep the company going and have better results. Committed OKRs are also called roof shot goals
Aspirational Objectives and Key Results are more visionary and ambitious and are about aiming high. In this, if a 66-70% progress is achieved, they can be considered to be a success. Aspirational OKRs are also called moonshots.

The Committed OKRs might be very challenging but are more realistic and to be a success, all the Key results must be accomplished. Meanwhile, the Aspirational OKRs are probably impossible to achieve in the available time frame and your resources should be evaluated before setting them.

Basic elements of the Objectives and Key Results (OKR) system

Goals, Objectives, Key Results, Initiative and Grades are the basic elements in the implementation of this system for setting ambitious goals and tracking progress towards achieving those goals.

Goals in OKR are the final and main results that must be achieved. Usually, goals are broadly defined and have a long time-frame but it must be very ambitious. Here are some of the features that must define goals, revealed in an interview for Betterworks by John Doerr

“Goals must be supported by the entire organization. Every team and working group should agree on their goals and priorities.
Goals must be measurable or have quantifiable targets. Maybe it’s shipping a certain number of products or hitting a release schedule, but in any case, we have to be able to track and measure the goals.
Goals should be aggressive yet realistic. We want to stretch ourselves and stretch our teams, but not to the point of breaking.
Don’t tie the OKR goals to bonus payments, except for sales quotas. We want to build a bold, risk-taking culture.”

Objectives in OKR can be viewed as an intermediate destination on the way to achieving the goals. Objectives are those that set a clear direction and provide motivation. Objectives must be bold but realistic and included in a time-frame. It also must be defined very specifically and formulated so that will push for new achievements. A limited number of objectives is recommended, between 3 and 5. Objectives must be so ambitious that they feel somewhat uncomfortable.

The objectives in the Objectives and Key Results system are given by the answer to the question “Where do I want to go?”

Key results in OKR measure progress towards an Objective. About 3 key results are recommended for each Objective. The key results should describe outcomes and must express measurable milestones, and should be easy to grade with a number. Also, it should include evidence of completion.

The Key results in the Objectives and Key Results system are given by the answer to the question “How do I know if I’m getting there?”

Initiative describes the work you’ll do to influence a Key Result. It can represent tasks, projects, or similar activities that should not be dependent on something or someone else, and their outcome should be a Key Result. There is a minimum 1 Initiative related to a specific OKR

The Initiative in the Objectives and Key Results system is given by the answer to the question “What will I do to get there?”

Grades. Each Key Result must receive a grade and then, using a rough average, the correspondingly the Objective is also graded. This way we can see how close we are to meeting the proposed objectives. When grading OKRs the following facts must be taken into account:

On a scale from 0 to 1, an average of 0.6 to 0.7 across all OKRs is a satisfactory result.
OKRs should not be treated as a comprehensive means of evaluating a person
Organizational OKRs should be Publicly graded within the organization
Intermediate check-in before assigning a final grade can be organized.

OKRs Cycle for company-team-contributor levels

OKR implementation should begin 4-6 weeks before the beginning of the year and for the First Quarter. This is done by senior leaders.
Now it is advisable to establish what the company’s annual plan is and which are OKRs for the first quarter OKRs
Two weeks before the First Quarter must be completed and communicated to everyone in the company which are the OKRs.
At the beginning of quarter 1, the teams must define their OKRs which must be based on the company’s OKRs, and communicate them in their meetings.
One week after the teams have communicated their OKRs, the contributors will need to establish and communicate their own OKRs. This stage may involve negotiations between contributors and their managers
During the quarter there will be meetings where contributors communicate the stage of their OKRS and where appropriate adjustments are made
One month before the beginning of quarter 2 starts brainstorming for the Second Quarter OKRs
Two weeks before the second quarter must be completed and communicated to everyone in the company which are the OKRs for the Second Quarter
By the end of the quarter, the contributors score their OKRs of the First Quarter and reflect on what has been achieved
The process continues for the Second and Third Quarters.

To avoid when applying the Objectives and Key Results system

Several elements that can undermine internal values and create a confusing strategy, which is why it is advisable to avoid them:

Miscommunicating goals – each team must understand the other team goal-setting philosophy
Business-as-usual OKRs – the OKRs must demand top efforts from the teams
Sandbagging – OKRs must be bold and demanding in terms of a team effort
Low-value objectives – OKRs should promise clear business value to make a difference
Insufficient key results for objectives – it must include all that is needed to fully achieve that objective

“The benefits are profound. OKRs surface an organization’s most important work. They focus effort and foster coordination. They keep employees on track. They link objectives across silos to unify and strengthen the entire company. Along the way, OKRs enhance workplace satisfaction and boost retention.”

Benefits of Objectives and Key Results (OKR) system

By definition Objectives and Key Results system that helps companies to align company, team, and personal goals, and ensure everyone is working collaboratively on goals that really matter.Properly applied this system will bring the following benefits: