OKR – Objectives and Key Results

How do you adapt fast to an ever-changing market and build great products? Lots of companies like Intel, Google, and many others are faced with this question, and when going through their answers, a particular pattern appeared around the term of OKRs.

Focus and prioritization, alignment between team members, accountability, and goal awareness throughout the company are some of the reasons why it proved to be the right answer for many of them.

So what are OKRs?

The term comes from “Objectives and Key Results” and it appeared initially at Intel, where Andy Grove developed this concept during the time where the company was facing one of their biggest challenges in the battle with Motorola around microprocessors.

To explain the beauty and simplicity of the framework I will use an excerpt from the hands of their creator:

Andrew Grove – “The Father of OKR”

Now, the two key phrases . . . are objectives and the key result. And they match the two purposes. The objective is the direction: “We want to dominate the mid-range microcomputer component business.”That’s an objective. That’s where we’re going to go. Key results for this quarter: “Win ten new designs for the 8085” is one key result. It’s a milestone. The two are not the same. . . .The key result has to be measurable. But at the end you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it. Now, did we dominate the mid-range microcomputer business? That’s for us to argue in the years to come, but over the next quarter we’ll know whether we’ve won ten new designs or not.

If you want to find out the whole history around the creation of OKRs and the challenges that Intel was facing at that time, I recommend checking out the book “Measure What Matters” by John Doerr. You will also find many other success stories and examples of ambitious and inspiring objectives from companies like Google, Youtube, Adobe and many more.

Examples of OKRs

Objective: Develop the next generation client platform for web application
Key Result: Chrome reaches 20 million seven-day active users


Objective: We should make the web work as smoothly as flipping through a magazine
Key Result: Make javascript execute 10x faster


Objective: We own product delivery and we learn every time
Key Results:

  • 100% of releases have a retro
  • 0 customer-reported bugs
  • 0 repeat production bugs

Objective: Continue to build a world-class team
Key results:

  • Recruit 10 engineers
  • Hire a commercial sales leader
  • 100% of candidates feel they had a well-organized, professional experience even if we did not extend an offer

Objective: We attract, retain, and enable the best people to operate at their best

Key Results:

  • Every team has OKRs and achieves 85% of key results
  • 80% of people feel we value their growth and development
  • We achieve 90% of our hiring plan and all roles have a defined ramp plan
  • 100% of employees have 360 reviews

Now, coming back, let’s take a look at the main qualities of OKRs.

Objectives are:

  • Ambitious – Inspiring objectives help align the team around a common purpose.
  • Qualitative – Instead of being measurable or quantitative, qualitative objectives give freedom to interpret. Remember, they represent the direction, not the amount of results that your team had.
  • Time-bound – Objectives should take at least one month to complete; otherwise, they are not ambitious enough and relate more to daily or weekly tasks. The most common durations are a quarter, a half, or an entire year. My personal preference is quarterly for extra flexibility.
  • Actionable by the team – There is a high level of frustration when an objective cannot be completed, because the ball is in another team’s court and/ or out of their priorities. Tip: I recommend building cross-functional teams that have a mix of skills so you can always achieve the required progress and reduce the chances of getting blocked.

Objectives are always accompanied by key results that are:

  • Measurable and quantifiable
  • Make the objective achievable
  • Lead to objective grading
  • Difficult, but not impossible

MBO vs OKRs

A big difference from the classic MBOs (management by objectives) is that OKRs are driven bottom-up. Each team member is asked to define what in his opinion represents the right objective for his team. Managers will also have prepared one or two objectives, but in the end the whole team discusses and agrees on what will be the next OKRs that they will strive for.

When defining them, objectives must be “uncomfortable existing ones,” as a top manager at Google likes to call them. This means that by default, they are challenging goals, and from the beginning, the team should feel that they have a 50% chance of achievement. When they are ambitious and inspiring, they can put forth the best of themselves and think outside of the box to come up with smart and unique solutions.

When Intel moved away from MBOs

After creating and setting the OKRs, the next phase is the execution. Christina Wodtke in her book “Radical Focus” shares valuable advice along with a great execution framework. She explains that there must be a system where every week the team checks progress, prioritizes and does only the right things.

She talks about two main meetings: The planning meeting on Monday morning and the Weekly Wins Meeting on Friday evening. She recommends this routine to enforce focus only on work that has an impact on the quarterly OKRs. This prevents the team from chasing “golden apples.” She uses this term to define other useful ideas or actions that do not help in achieving the primary purpose of the company.

OKRs must not be connected to performance evaluations, bonuses or other kinds of financial compensation. This is one of the most common mistakes that companies fall into, and it has negative consequences on their people and their results. We want all team members to “reach for the stars.” When people have their OKRs connected to bonuses, some of them will start “sandbagging” them or playing defensively or negotiating with their managers to make them “more realistic” to a level that the results are nothing out of the ordinary. Intrinsic motivation becomes extrinsic motivation, and the pursuit and the drive to achieve incredibly great things quickly fades away.

For more on common hurdles when implementing OKRs check out this Quora answer here.

OKRs adoption trend in the industry continues to rise. More and more companies are adopting and applying them across departments, components, and levels.

They are a great tool to fulfill a company vision or strategic mission and must be part of the toolbox of every successful executive or manager.

If you want to learn more, I collected a list of resources that helped me understand the concept, and I can gladly recommend:

Resources

Note: Some of the book links below are affiliate links, which means that if you choose to make a purchase, I will earn a commission. This commission comes at no additional cost to you.


Also published on Medium and LinkedIn.

Goals Setting Framework

Do you have difficulties breaking down big goals, let’s say like life goals into actionable steps?

If yes, you are not alone as this is one of the most common difficulties for people that I work with.

In this article, we will take a look at a technique/framework that is designed to help you achieve this.

Let’s start with explaining to you the idea behind it.

Imagine you have a difficult journey ahead. Let’s say you must climb the highest mountain in the world. The amount of effort needed makes you quiver only by thinking of it.

If you look only at the peak of the mountain, it feels like an impossible task, even scary.

A way to prevent this feeling is to find and focus on a closer milestone, like the next big tree that you see exactly ahead on your path. After you reach it take the big rock as guidance, and after the other landscape element and repeat the process.

Soon you will realize that you made a lot of progress from the place you started, and with grit and determination, you will reach the peak.

When the next goal or milestone is clear, visible and reachable progress is made easier, motivation is maintained high and the ultimate goal will be reached.

Now let’s look at the framework and after take an example.

The Framework

We start by defining a big, lifetime goal that can be achieved in 10, 20 or even more years. So what is that one thing that brings you joy, motivates you and you wish that would be a reality now?

Based on that, you must decide what is the one thing that you can do in the next 5 years, to bring you closer to your lifetime dream. This will become you’re 5 years goal.

Next based on this goal you must define what the one thing that you can do in one year to get you closer to your previous goal.

You do this for defining a monthly, a weekly and sometimes even a daily goal. I mentioned sometimes daily goals because it depends on your own time management style and there are persons who work well with daily goals and targets and others prefer the flexibility of weekly targets.

Now, let’s put all of this in practice with an imaginary situation where John, a successful professional, that has a life goal of getting his own motor boat to travel the world.

John’s Dream

John’s Dream: Have a boat to travel the world

We start by doing initial research of what kind of boat John wants, what features and packages he wants and what are the average prices. As John is very passionate about sailing, this part is very exciting for him as he has no constraints and he is guided only by the things that make him happy.

Let’s imagine that he found his dream boat at half of million euros. The next step is to define what he can do in the next 5 years to get closer to his dream.

He realizes that there are many things that he needs to complete so that he can have and drive the motorboat. For example, he needs to get a license and of course to save the money to get it.

Now comes the strategic thinking in place as John needs to find out how he can turn this dream into reality. John feels that the goal of getting a boat license is easier to achieve than how to afford the boat. Therefore he wants to tackle the financial part first.

After some brainstorming, he decides on the goal of doubling his income so he can get the boat in 10 years instead of 20.

So the next step is what John can do in one year based on his 5 years goal? When considering his option he realizes that he can improve his work performance and results so that he gets a raise or a higher paid job, or to start a side business around his passion for boats.

Let’s imagine that he decides on the latter one. So now we know what John want to achieve in his life, in the next 5 years and in the next year. We are now getting closer to the ground level, where goals are much easier to grasp.

So what can be John’s goal for the next month? For example, he can research different business models that would help him turn his passion into a sustainable channel for cashflow.

As he has no experience with business models, he decides that his weekly goal is to collect all possible resources and contacts that can support him on this journey.

His daily goal for today would be something like check and contact all my contacts that have skills or experience in creating and managing a business.

Example Goal Breakdown

This is it. Now John has a set of low and high-level goals to turn his dreams into a reality. This can be used in different situations, from goals like retiring at 35 years old, buying your dream home, getting the CEO job at a major company and so on.

Before ending this article, I would like to ask you to write down one of your life goals, use this framework to turn it into reality and share your experience.

My Secret Behind Successful Commitments

To commit or not to commit? That is the question asked by many teams in an agile world as well as individuals that set strict goals for their development. The answer must not be taken lightly as the faith and trust in oneself or of fellow team members depend on it.

Is there a way that we can ease the burden of this question or increase the likelihood to succeed?

Yes, I say. And in this article, I would like to share some insights into the elements that I consider essential to reach your commitments: Clarity, Focus and Perseverance.

Clarity

clarity

Commitment goes hand in hand with goals. If you don’t have a goal there is nothing to commit to. Pretty obvious, right?

Even if it sounds trivial, setting good goals is not easy. Start by establishing SMART (specific, measurable, achievable, relevant, time-bound) goals, then make sure that every member of the team is on the same page. Explain why the goal is important and visualize what it will mean when the task is completed. Ensuring everyone has a shared understanding and view of the goals is critical.

If it is a team goal, have it written down and visible in an accessible location of your team space: on a big whiteboard, or a big screen so that everyone can see it. Don’t rely on a Jira board that shows tasks or current progress. Mention it daily so that it is engraved in everyone’s mind until it is completed. 

If it is a personal goal, have it written down on your desk, on your entrance door, on your bathroom mirror, on your refrigerator. This plants the seeds of success in your mind and focuses your attention on things that will help you achieve your goal.

If there are uncertainties, or unclear elements or even unknown requirements, make sure that they are exposed and dealt with first. Reduce the risk by preparing in advance or consulting specialists that can provide insight or suggestions on how to deal with the unknown.

Clarity of purpose is the stepping stone of any commitment, so make sure you do it right.

Focus

Focus is the next vital element in achieving your commitment. You have your goal, now it is about breaking it into small steps so that each day you get closer to reaching it. Each step becomes a target. Each target requires an explicit focus to reach it.

You have a limited amount of time and energy, and chances are, you’ll never have enough of both to accomplish everything you need to do every single day. Not everything on your list is urgent. Take a moment to identify the most important task. This is the crucial task you must get done, tackle it first. By completing the vital task, you’ll ensure that you’ll have a productive day no matter what.

Do one thing at a time. It is very easy to give in to temptation and start multiple things simultaneously. This might work when doing physical tasks or chores but went you require brainpower, each of us has only a limited bandwidth. When stretched too thin, it will result in a decrease in quality or speed.

Always have a goal or target in front of you. Open your calendar, check for major events, manage your availability, and start setting goals for the month, the week, the day. Keep things simple. Don’t overthink what tool to use, or what structure to have. Pen and paper are good enough, but if you want a digital application, my recommendations are Todoist and Trello.

Start your day by reviewing your goals and targets so they are engraved in your mind, then it will be easy to deflect distractions and achieve your commitment.

Perseverance

Clarity and focus will point the direction, but perseverance is the fuel that you need to reach the finish line. Take action, because you will not be able to achieve anything without it. Action is what makes your goals and dreams come true.

Pace yourself as you require endurance, consistency, and perseverance to make a considerable impact on yourself or your team. Starting strong, but collapsing before the finish line will not help you or anyone in any way. The way how you finish a project is even more important than how you start it.

Have your mind and body in check as you require both mental and physical energy.  Endurance is key – Life is long, small drawbacks and problems are not the end of the world. Success comes when you plan for the long term and do everything in your power to achieve it.

Stay optimistic. Having positive beliefs, hopes, and expectations rule your motivation to persevere. Instead of letting your mind run wild with all the ways how you could fail, excite it with anticipated victories.

Summary

I would like to end the article with a quote from a famous Jedi Master:

“Do or do not. There is no try”

– Yoda

When you are nervous that your plan won’t work, you might find yourself saying, “OK, I’ll try to do it.” By doing that, you are laying the foundation for being unsuccessful from the beginning, giving yourself a way out. Yoda’s statement is a passionate reminder that life rewards those who let their actions rise above their excuses. Clarify intentions, eliminate all doubts, be bold, and say: Yes, I commit!


Also published on Medium and LinkedIn.