How Google and Others Succeed with OKRs
Grow Your Business, Not Your Inbox
Objectives and key results (OKRs) is a popular method for setting and tracking goals. First developed in the 1970s by the late Andy Grove in Intel, it's now increasingly popular and used not only in big companies like Google, LinkedIn and Twitter but in many SMEs as well.
OKRs can be used in any company, with any team size and there really is no downside for having clear goals. The methodology helps people be more productive and focused.
John Doerr, one of the advocates for OKRs, has said:“I remember being intrigued with the idea of having a beacon or north star every quarter, which helped set my priorities. It was also incredibly powerful for me to see Andy’s OKRs, my manager’s OKRs and the OKRs for my peers. I was quickly able to tie my work directly to the company’s goals. I kept my OKRs pinned up in my office and I wrote new OKRs every quarter, and the system has stayed with me ever since.“
Big objectives and measurable key results.
Although used a little differently in every organization, OKRs have some fundamental similarities. Objectives are set every quarter on personal, team and company level and they should summarize the most important things that a person or the team has to do.
Each objective should have three to four clearly measurable key objectives. It’s very common to use the SMART goals methodology for that. SMART stands for “specific,” “measurable,” “achievable,” “relevant” and “time-bound.” For instance, “selling more products” is not a good key results. Instead it should be “to sell 20 percent more products than last quarter in U.S. market.”
Key results must be 100 percent measurable and looking at your OKRs, you should easily see, how well you’re doing.
Google's ambiguous goals.
It was John Doerr who originally introduced OKRs in Google in 1999 and they've been using the methodology ever since.
In Google, the quarterly goals are set as high as possible to make people really push for the stars. At the same time, each goals have easily measurable key results on a scale from zero to 1.0.
It is a common belief that if you can achieve 100 percent of all your OKRs each quarter, you're not aiming high enough. The OKRs must be structured. In Google, each individual and team has it's own objectives that contribute to a higher (department) level objectives. That helps to make sure that everyone is working in sync.
One other key thing about OKRs is openness. Anyone in Google can see anyone's OKRs and so, everyone knows what others are working on and how they contribute to the whole.
OKRs make your mission actionable.
Using OKRs has been very good for LinkedIn.
LinkedIn CEO Jeff Weiner defines them more broadly. They should be about “something you want to accomplish over a specific period of time that leans toward a stretch goal rather than a stated plan. It’s something where you want to create greater urgency, greater mindshare.”
He has also said that good leaders show to each person in a company, that they can make a real difference and OKRs help you with that.
SMEs need an OKRs management tool.
OKRs are a vital tool for smaller enterprises as well.
In 2015, one of the team members in Zlien, which makes preliminary notices, lien waivers and mechanics lien compliance, suggested using objectives and key results.
They first tested it with their technology team, but quickly included the department managers as well.
Scott Wolfe Jr., CEO of Zlien, recommends using OKRs in general. It's very good to align and focus your team on the main things you are trying to work on as a company. He said: “I like the structure and how it breaks down each department and team.”
Lyle Stevens, co-founder and CEO of Mavrck also loves the objectives and key results framework.
“It makes it easier to align what every individual of the company wants to achieve each quarter,” said he.
For Mavrck, it's a great system for prioritizing resources and for making sure everybody is focused on the right goals. OKRs help them to make trade-off decisions. For example, if they have a new potential priority, OKRs help them to compare it to what they already want to achieve.
I can think of no reasons, why implementing a clear goal setting system in a company would do harm. From Google to two-people teams, OKRs are a “one size fits all” solution and your competitors probably already know that.
OKRs can be managed in an Excel spreadsheet or using a specific tool like Weekdone and taking the time every quarter, will save you a lot of time along the road.