I have been reading recently about Google’s strategies for growing their business and a key driver is the way they define and track objectives and their outcomes using Objectives and Key Results (OKRs).
Many commentators mistakenly claim OKRs were a Google invention, in fact they were invented at Intel and John Doerr of Kleiner Perkins Caufield & Byers originally presented the idea to Google’s leadership in 1999 when Google was less than a year old, and they’ve been in use ever since. Here is your two minute guide to OKRs.
- Objectives are ambitious, and should feel somewhat uncomfortable.
- Key Results are measurable; they should be easy to grade with a number (Google use a 0 – 1.0 scale to grade each key result at the end of a quarter).
- OKRs are public; everyone in the company should be able to see what everyone else is working on (and how they did in the past).
- The “sweet spot” for an OKR grade is 0.6 – 0.7; if someone consistently gets 1.0, their OKRs aren’t ambitious enough.
How to implement OKRs?
- Set your Objectives; these should be significant, should communicate action and should be supported by the organization as a whole.
- 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.
Why use OKRs?
- Disciplines thinking – major goals will surface.
- Communicates accurately – lets everyone knows what is important.
- Establishes indicators for measuring progress – shows how far along we are.
- Focuses effort – keeps everyone in step with each other.
Guidelines for successfully implementing OKRs in your organisation
- Maximum of five objectives per company, department, team and person.
- Maximum of four 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.
The difference between personal, team and organisational OKRs
- Personal OKRs define what the person is working on.
- Team OKRs define the priorities for the team (not a collection of all individual OKRs).
- Company OKRs are big picture, top-level focus for the entire company.
And here is a live, working, example of an organisational OKR for the introduction of our new training courses and workshops. Sophie and I both have personal OKRs to deliver this organisational OKR.
Launch Make Happy Training and sell three courses in Q3 2014.
Introduce digital and print sales collateral for each of the courses.
Mailshot the clients and friends database with details on the courses.
Launch the programme with three free breakfasts introducing a course and the course facilitator.