OKRs stands for Objectives and Key Results. They are a relatively light way for a company, team, project to set goals in a clear and transparent way.
An objective is simply WHAT is to be achieved. Objectives are significant, concrete, action oriented, and aspirational. (Matt’s take: these can be a tiny bit vague in the sense that they’re not measurable)
Key Results bechmark and monitor HOW we get to the objective. Effective KRs are specific, time bound, aggressive, yet realistic. Most of all, they are measurable and verifiable. You either meet a key result or you don’t; there is no gray area.
Here are a few more relevant details about what OKRs are:
- Key Results must be easily verifiable. There should be no ambiguity as to whether or not a key result was achieved.
- Key Results describe outcomes, not activities.
- The achievement of all key results should strongly imply the achievement of the objective.
- Types of OKRs:
- Objectives can be classified as either committed or aspirational. Committed objectives are those you expect to achieve. Anything less than a 100% success rate is a failure. Aspirational objectives are not guaranteed. They have a target success rate of around 70%.
- Objectives can be business or personal. Business objectives are things that will push the business forward. Personal objectives are about personal growth.
A few tips about how to put OKRs into practice successfully:
- Keep the number of objectives small. Maybe 3-5. If you have too many objectives, they no longer provides focus and alignment.
- Keep the number of key results per objective small. Also maybe 3-5.
- Objectives should not be set exclusively top-down or bottom-up. Teams and individuals should be encouraged to create roughly half their own OKRs. The other half should be constructed to align with their company or team-level objectives.
- This balances alignment with autonomy. Often the most innovative ideas start at the bottom/edges.
- Most objectives should be business, but a few personal objectives are great.
- It should be clear that your score on OKRs does not determine your bonus. Obviously they are correlated (i.e. productivity informs compensation) but falling just short of an extremely ambitious goal is much better than acheiving an easy goal.
Doerr claims setting OKRs provides four “superpowers”:
- Focus and committment to priorities
- Alignment and connecteness for a team
- Stretch goals
Here are the PROs in my words:
- OKRs are explicit. Explicit is better than implicit. You actually write down what your goals are and how you plan to achieve them. It’s much harder for miscommunications to happen.
- Writing is clarifying. By writing down your goals, as opposed to just “knowing them”, it forces you to clarify and cristalize them. In general, people put a lot more effort into things they need to publicly share in written form.
The simple act of writing down a goal increases your chances of reaching it. Your odds are better still if you monitor your progress while sharing the goal with colleagues.
- Transparency. Within a team or across teams. There is relatively little overhead if someone wants to understand what another team or teammate is doing.
- OKRs force concensus between a manager and a managee about what success looks like. There is no more guesswork for the managee. I suspect most employees would find this liberating.
- OKRs introduce timeframes, i.e. deadlines. We don’t currently have those and I think some amount of time pressure would be helpful.
- Research shows that hard goals drive performance more effectively than easy goals. Specific hard goals “produce a higher level of output” than vaguely worded ones.
- OKRs provide the opportunity to set ambitous goals and, importantly, to agree with your manager that they are in fact ambitous! That’s motivating.
- Having extremely clear-cut and verifiable goals is motivating. You can “achieve success”. You can also “officially fail”. Either outcome can light a fire. When everything is implicit it’s harder to know whether you’ve succeeded or failed.
- OKRs provide a mechanism to make sure everyone is working towards a common (small) set of goals. This can be inspiring.
- Top-down vs. Bottom-up. Alignment vs. Autonomy
- Stretch goals vs. Achievable goals (Aspirational vs. Committed)
- Too much structure, lack of autonomy. Employees feel like a cog in a giant machine. Maybe giving 20% “play time” is a nice antidote?
- I suspect that OKRs bias you to choose grandiose, big picture sounding objectives over incremental improvements.
“hard goals” driver performance more effectively than easy goals. Specific hard goals “produce a higher level of output” than vaguely worded ones.
At Intel, it almost doesn’t matter what you know. It’s what you can do with whatever you know or can acquire and actually accomplish that tends to be values here. (Matt: results over expertise)
I’d never worked at a place where you wrote down your goals, much less where you could see everyone else’s, on up to the CEO. I found it illuminating, a beacon of focus. And it was liberating, too. When people came to me mid-quarter with requests to draft new data sheets, I felt I could say no without fear of repercussion. My OKRs backed me. They spelled out my priorities for all to see.
Less is more: “A few extremely well-chosen objectives”. 3-5 OKRs per cycle. Each objective should be tied to 5 of fewer KRs Set goals from the bottom up: Teams and individuals should be encouraged to create roughly 1/2 their own OKRs No dictating ? I don’t get it Stay flexible: If the climate has changed and an objective no longer seems practical, discard it Dare to fail: Output will tend to be greater when everybody strives for a level of achievement beyond their immediate grasp A tool, now a weapon: OKRs and bonuses should be kept separate Be patient; be resolute: An organization may need up to 4-5 cycles to get the hang of OKRs
We were all taught that if you measured it, things got better.
When you are tired of saying it, people are starting to hear it.
Clear cut time frames intensify our focus and commitment; nothing moves us forward like a deadline.
To safeguard quality while pushing for quantitative deliverables, one solution is to pair key results. They paired counterparts should stress the quality of the work. For example, the number of square feet cleaned by a custodial group should be paired with a rating of teh quality of work as assessed by a senior manager with an office in that building.
Completion of all key results must result in attainment of the objective. If not, it’s not an OKR. (Matt: the example he gave immediately after saying this did NOT satisfy this. The objective was to “Win the Indy 500” and the key results were things like increase average lap time by 2%.)
We don’t hire smart people to tell them what to do. We hire smart people so they can tell us what to do. - Steve Jobs
OKRs are the vehicle of choice for vertical alignment
20% time. By liberating some of the sharpest minds in captivity, Google changed the world as we know it.
Encourage some goals to emerge from the bottom up. Innovation tends to dwell less at the center than at the edges.
a healthy OKR environment strikes a balance between alignment and autonomy
focus and alignment are binary stars
Today every employee owns 3-5 business objectives per quarter along with 1-2 personal ones.
When a goal is too aspirational, it’s bad for credibility. In philanthropy, I see people confusing objectives with missions all the time.
Committed goals vs aspirational goals
Engineers struggle with goal setting in two big ways. They hate crossing off anything they think is a good idea, and they habitually underestimate how long things take.
Stretch goals can be crushing if people don’t believe they’re achievable. That’s where the art of framing comes in.
One-on-one: it should be regarded as the subordinates meeting with agenda and tone set by him. The supervisor is there to learn and coach.
Today’s workers want to be empowered and inspired, not told what to do.
Objectives are the “Whats.” They:
- Express goals and intents
- are aggressive yet realistic
- must be tangible, objective, and unambiguous
- the successful achievement of an objective must provide clear value
Key Results are the “Hows.” They:
- Express measureable milestones which, if achieved, will advance the objective in a useful manner
- Must describe outcomes, not activities. Verbs like “consult”, “help”, “analyze”, or “participate” describe activities.
- Are easily verifiable
Types of OKRs
- Committed vs. Aspirational
- Business vs. Personal
- Trap #1: Failing to differentiate between committed and aspirational OKRs
- Trap #2: Business as usual OKRs
- Trap #3: Timid aspirational OKRs
- Trap #4: Sandbagging
- Trap #5: Low Value Objective (aka the “Who cares?” OKR)
- litmus test: Could the OKR get a 1.0 score without providing direct end-user or economic benefit?
- Trap #6: Insufficient KRs for committed Os
- litmus test: It is reasonably possible to score a 1.0 on all KRs but still not achieve the O?
Other litmus tests
- If you wrote them in 5 minutes, they probably aren’t good.
- If your objective doesn’t fit on one line, it probably isn’t crisp enough.
- Use dates for KRs.
- Make sure KRs are measurable.
- Make sure metrics are unambiguous. If you say “latency” - which latency? median, 99%?