OKRs – objectives and key results

Businesses live and die by hitting their targets, and OKRs (objectives and key results) is one way that Silicon Valley companies are trying to ensure that happens in a simple, straightforward and transparent way.

Invented by Intel, popularized by venture capitalist John Doerr, and now adopted by companies including Zynga and Google, the idea is that the company, department, team and employees set not just their objectives, but identify the key results for hitting those objectives. It means goals are clear and measurable, and there is alignment company-wide.

Benefits of OKRs?

  • It disciplines thinking (the major goals will surface)
  • Communicates accurately (lets everyone know what is important)
  • Establishes indicators for measuring progress
    (shows how far along we are)
  • Focuses effort (keeps organization in step with each other)

How to implement OKRs?

Firstly, set your Objectives; these should be significant, should communicate action and should be supported by the organization as a whole.

Secondly, for each Objective, write down your Key Results, which is how you’re going to accomplish the goals. These  few key points should be aggressive yet realistic, measurable, and time related.

okrExample:

OBJECTIVE:

Increase sales by 25% in the next quarter

KEY RESULTS:

  • Hire 2 great new sales people
  • Introduce new more effective sales collateral
  • Increase conversion rate on visits to website by 10%

Some guidelines:

  • Maximum of 5 objectives per company, department, team and person.
  • Maximum of 4 Key Results per Objective
  • OKRs must be mutually agreed upon by managers and employees
  • OKRs should be a “stretch” – managers should expect a score of 60-70% completion. (100% indicates the OKRs were too easy in the first place).
  • Review regularly, and carry forward only those Key Results which are still relevant.
  • Objectives should be supporting the company as a whole.
  • Key Results should be outcome based not task based.

Software to track OKRs?

Teamly handles OKR management really well, as part of our complete Social Performance Management offering. If you would like to know more request a demo.

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About Scott Allison

Co-Founder and CEO of Teamly

8 Responses to OKRs – objectives and key results

  1. Don says:

    Explain the difference between outcome based and task based key results. In the example abofve it looks like the key result is the result of a completed task – in an effort to achieve the objective.

  2. Kimball Norup says:

    To give credit where it is due, this pre-dates Andy Grove and Intel by 25 years.

    Peter Drucker first identified and expounded on the concept he called Management by Objectives in his 1954 book titled The Practice of Management. It was a process of defining the objectives of the organization and key results needed to achieve them. He went on to describe Key Result Areas for the organization…

  3. Camilo says:

    You got it a bit backwards. Objectives are supposed to be qualitative and Key Results are supposed to be quantitative. See this, written by a Googler: https://docs.google.com/document/d/1OHpQOvZz76_10ebJP2AKvvXUF3H9yd6FC89F5jS4mks/edit#

    Whatever works for your team though!

  4. [...] it out to know precisely what you want and how you’re going to get there. See SMART goals or OKR.  Simplicity is good, but it’s got to be [...]

  5. […] Objectives and Key Results are the system that I used with my mentor at Shopify to drive my professional growth […]

  6. […] of the performance metric systems from Google and Whole Foods, like inter-department and individual OKRs, and have found that this is an extremely successful way for our team members to be held […]

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