Introduction to OKRs starts with understanding the basic concepts of Objectives and Key Results. You need to know what are Objectives. And what are the Key Results. You also need to know, how they differ from other popular goal setting methodologies.
OKRs stands for Objectives and Key Results. It is a framework of defining and tracking objectives and their outcomes.
The main goal of the system is to set company and team “Objectives.” And set the measurable “Key Results” that define achievement of each objective.
One OKRs book defines OKRs as “a critical thinking framework and ongoing discipline that seeks to ensure employees work together.” In addition, OKRs are shared across the organization. That way, teams have visibility into goals across the organization, helping to align and focus effort.
So, here you’ll find everything you need to know about OKRs.
To get the best results OKRs should be aligned to one another. Each part of your company must know what’s going on and how each part contributes to the whole. Our belief is that in order to get all the employees in your company working as one, they all should share an aligned, hierarchical tree of objectives and key results.
Moonshot OKRs or stretch goals are goals that seem impossible to achieve. They should force teams and individuals to rethink how they work and take you out of your comfort zone.They should make everyone involved wonder, how far you can go.
Committed OKRs (roofshot OKRs) are ones that your organization or team has agreed to execute and might have a clear action plan for achieving. Aspirationational OKRs (moonshot OKRs) are more visionary and likely won’t get completed 100%, but they are important for moving towards the future.
Moonshot OKRs are the lofty and ambitious Objectives where 100% completion is likely impossible. Objectives should be set with very high bars. Achieving these OKRs brings huge success, but the risk of failing is high as well.
For both the roofshot and the moonshot OKRs what you measure with the Key Results can be the same. But how big the stretch is will define which type of goal it is.
With moonshots, 66-70% progress achievement can be called a success. But you have to be careful. While these goals should be just out of reach, it’s important that people would still take them seriously. Employees need to do everything to achieve them. If 66% becomes the new 100% for everyone, nobody will push hard enough.
The easiest way to get started with OKRs is to start using them.
There are a lot of resources you can read and watch before, but to understand how they work, they need to be tested on your team.
It is very common to finish your first quarter with mostly 100% or with mostly zeros, especially if you had no prior experience in setting OKRs. It’s important to remember that OKRs are not a project you run for 3 months. To work well, they must be used constantly and the progress must be improved every quarter. In 3 or 4 quarters, you should have a clear idea on how they work, Then you’re all set.
Key results measure how far from reaching your objective you are. It adds metrics to objectives.
The biggest challenge that most of the companies face is that instead of defining Key Results as measurable outcomes they set a list of action based Outputs. This goes against the whole point of OKRs.
The output is an action that you take towards your goals. One thing is for sure, they are not measurable outcomes! Writing and delivering a new marketing plan doesn’t mean that the new plan is good and that it will bring lots of new customers.
Outcomes are the measurable results that you hope to see after you have finished your outputs. Outcomes are not about doing, they are about delivering real, valuable business results. If the marketing plan is our output then the desired outcome of it might be that the new marketing plan increases incoming leads from 4000 to 5500 per quarter.
The OKR methodology is a simple process of setting and aligning company and team goals (Objectives) and connecting each Objective with 3-5 measurable results (Key Results) to measure progress. For example, increase _ from X to Y. Reduce by X%. Improve __ up to X%. Key Results can be measured on a 0-100% scale or any numerical unit (ex: dollar amount, %, items, etc.).
There are two types of goals one can set – committed or aspirational OKRs. Committed OKRs are ones that your organization or team has agreed to execute and might have a clear action plan for achieving. Aspirational OKRs are more visionary and likely won’t get completed 100%, but they are important for moving towards the future.
When you use OKRs, everyone understand what they have to do, what others have to do, and how everyone’s individual tasks help them move forward as a team.
According to the “Step by Step Guide to OKRs”, The history of OKR methodology started its climb to popularity when John Doerr introduced OKRs at Google in 1999. But actually, OKR methodology had been championed even earlier by Andy Grove, the late CEO of Intel during the 1970s.
Doerr 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.”
The beggining of history of OKRs.
The birth of OKRs can be traced back to Peter Drucker. He was one of the first managerial thinkers. And in the 1950s he introduced a system called “Management by Objectives” (MBOs). That system called for setting objectives for everyone who works in a company. These goals had to “lay out what contributions a given individual and their unit are expected to make to help other units obtain their objectives.”
Andy Grove, CEO of Intel, reshaped the MBO system into a simpler form that answers the questions:
Where do I want to go?
How will I pace myself to get there?
He also suggested objectives should be set more frequently, on a quarterly or monthly basis. Arguing that as the fast-paced world requires constant feedback. He also believed multiple performance management tools should be used in conjunction with OKRs. Finally, he believed OKRs should be stretch goals and achieving them 100 percent should be next to impossible.
Having gotten a lot of leadership lessons from Grove, John Doerr introduced the system to Larry Page and Sergey Brin, co-founders of Google.
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