Published by: Brett Malden, VP Innovation + Technology, BrandStar Tech
Setting business goals is nothing new and many “experts” have written books, given presentations and achieved fame for coining terminology and creating their own goal systems. One system in particular, OKR, has actually been around since the 70s, but is gaining increasing popularity as revered companies like Google, Intel, Netflix, Twitter, Facebook and Amazon are all reaping its benefits. If these corporate power houses are achieving success with OKR, then they are most definitely on to something. And, it begs the question … how can you make OKR work for your organization?
With all the acronyms in today’s business world, the first thing you need to know is what exactly does OKR mean. Simply put, it stands for Objectives and Key Results. Two terms that when combined together are creating focus, alignment and engagement within Fortune 500 companies and beyond. The beauty of OKR is that it can be adapted to fit any industry and work in organizations of any size.
OKR In Detail
OKR stands for Objectives and Key Results, but what does that mean? How can such a simple phrase illicit such a big impact on an organization? If OKR is executed properly, it’s almost magical so bear with us as we explain.
An OKR is a collaborative goal-setting methodology used by organizations and teams to set goals with measurable results. It’s made up of an objective which is basically a clearly defined goal. In addition to the goal, an OKR also consists of 3-5 definitive and key results that can be measured and tracked to determine if the original objective (goal) is achieved.
OKR’s are measurable and allow you to set weekly, monthly, quarterly and annual goals. It is important to remember that OKR’s are not to-do’s on a list that continues to grow with unfinished tasks. They are also not set it and forget it and should be revisited on a regular basis to track progress and to celebrate successes or to adjust failures. OKR’s keep things fluid and moving in the organization and enable employee focus and efforts to move in sync. This goal setting methodology creates an environment of positivity and a sense of accomplishment which helps to continue the cycle of creating OKR’s and working as a cohesive unit to achieve them.
OKR – A Quick History Lesson
In 1975, John Doerr, an Intel sales rep, attended a course within Intel taught by Andy Grove who introduced the theory of OKR, then called iMBO’s or Management by Objectives. Years later in 1999, Doerr who was then working for a venture capital firm introduced the concept to Google. The concept quickly became a central part of Google’s culture and management philosophy and is still used today. In 2017, Doerr published a book on the subject titled Measure What Matters. Google’s co-founder, Larry Page, credits OKR to leading them 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”1
Setting goals and objectives is nothing new and every organization does it. The problem is that we often set these goals during annual team meetings or team building events. An entire day is spent brainstorming ideas and bonding and result in a long list of goals, strategies and objectives that are often unattainable, immeasurable and never given a second glance. If an objective is too complex or seems impossible human nature is going to prevent us from accomplishing it.
An OKR approach sets a common objective (goal) that is known to everyone in the organization. The objective is obtainable, measurable, and transparent which provides many benefits to an organization. Here are a few to note:
- Creates clarity, unity and alignment within the organization
- Everyone is moving in the same direction which improves efficiency
- Motivates employees to work towards a higher purpose increasing productivity
- Tracks progress with measurable results to identify successes
- Improves engagement and allows the team to be proactive vs reactive
- Boost morale and enhances overall corporate culture
- Streamlines communication
- Improves focus and keeps team on task
- Shared across the organization
The key to setting up OKR’s is to keep it simple at first. Provide an objective of where you want to go as a company or as a team. Then, as you achieve the OKR you can continue to add more, like building blocks, but you don’t want to overwhelm your team. OKR’s should be challenging, but not impossible and not too easy. It requires balance and a certain finesse at first. Here are a few examples to get you started:
OBJECTIVE: Improve Customer Satisfaction
- Key Result #1: Receive 300 customer surveys per quarter.
- Key Result #2: Reach 85% of customer base each quarter with a thank you call.
- Key Result #3: Decrease customer complaints by 50% by quarter end.
OBJECTIVE: Increase online marketing presence in Q2
- Key Result #1: Increase followers on Facebook from 10,000 to 20,000.
- Key Result #2: Receive a 25% increase in blog subscribers.
- Key Result #3: Increase organic search traffic to our website by 20%.
The possibilities are endless, but the true end goal is to create OKR’s that everyone can work together to achieve. In terms of measuring success – “the goal of OKR is to define how to achieve objectives through concrete, specific and measurable actions. Key results can be measured on a 0–100% scale or any numerical unit (e.g. dollar amount, %, items, etc.). It is recommended that your target success rate for key results be 70%. A 70% success rate encourages competitive goal making that is meant to stretch the organization and its employees. If 100% of the key results are consistently being met, key results should be reevaluated.”2
Creating and setting an OKR strategy sounds simple enough but with the daily pressures of work and life sometimes the best laid intentions fizzle. To avoid fizzling and to keep that spark alive sometimes we need a little support. At BrandStar Tech, we can help you stay connected to your goals and keep you on track. For more information, please contact us HERE or at (844) 200-2525.
- (2018) Doerr, John. Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs. Penguin Publishing Group. p. 31. ISBN 9780525536239.
- (2020) Wikipedia. Available at https://en.wikipedia.org/wiki/OKR accessed on 14 November 2020.