What are OKRs
Objectives and Key Results (OKRs) are quarterly, yearly, and sometimes monthly objectives. They lay out a company plan to execute strategy and help make sure that the company goals and how to achieve them are clear for everyone in the company. Often, this means OKR’s are shared throughout a company transparently.
The Objectives help everyone understand what the company aims to do and the Key Results help paint the picture of how we’ll measure success.
Objective: What you’re going to accomplish Key Results: The metrics to know if the objective was achieved.
The OKR methodology was pioneered by Andy Grove at Intel and has since helped companies around the world. John Doerr wrote a book about OKR’s and their power. Superpowers, as he calls them.
The superpowers of OKR’s
OKRs have four superpowers:
- Stretch - uitleg uit boek
Less is more - “A few extremely well chosen objectives make it very clear to what we say ‘yes’ and to what we say ‘no’” 3 objectives is good, 5 is the absolute maximum. (per: company, team, individual) Set goals from the bottom up - Promote engagement, teams and individuals should set ~50% of their own OKR’s, in consultation with managers. No dictating - Cooperative social contract for priorities and progress. Collective agreement. Stay flexible - No need to stick to objectives if climate changed. Dare to fail - failure = progress. Though there are operational objectives that must be met in full. Uptime of 99.95% for example. Aspirational objectives must be stretch goals however. A tool, not a weapon. In short, dont’t link it to performance reviews. Just don’t. Unlinking it encourages risk taking and prevents sandbagging. Be patient, be resolute - trial and error, be agile and adapt. You will get better at it.
It’s best to not couple OKR’s to performance reviews. Do not use them for compensation review or to give performance feedback. For example, people will start sandbagging instead of setting stretch goals if you do.
At least around 50% of OKR’s should be set bottom-up. Also, when starting with OKR’s, expect to require 4-5 quarters of OKR setting to get the hang of it.
- “What” and “How”
- Quarterly or Monthly
- Public and transparent
- Bottom-up or Sideways (~50%)
- Mostly divorced from compensation
- Agressive and aspirational (as opposed to risk averse)
OKRs are stretch goals by default
OKRs should be ambitious but achievable. Stretch goals. If you achieve less than 60% of your KR, it may have not been achievable. If you are regularly achieving 100% of your KRs, your goals may not be ambitious enough.
Aim for an achievement rate of 60-70%
If there is something important that requires two (or more) parts of the organization, all leaders involved should share the same, or a similar objective. Key results should not conflict so each can achieve things within their own sphere of control. This helps with accountability.
OKRs are what is different
The OKRs are what initiatives a company is focusing on in a given quarter specifically. The most important work is things that happen every quarter. These tend to have a more operational nature. Things that happen every quarter are measured with Key Performance Indicators (KPI’s). Part of the OKRs will be KPI’s or cause changes in KPIs.