OKR stands for objectives and key results. Many leading corporations use OKRs, Google, Twitter, Uber, and others. Organizations use OKRs as a management tool. It helps corporations set goals and measure progress on those goals. Out of all the companies using OKRs, Google has the most experience, and they offer an in depth OKR management playbook. For this article we will look at how google uses OKRs. This is Google's view on using OKRs:
“We use OKRs to plan what people are going to produce, track their progress vs. plan, and coordinate priorities and milestones between people and teams. We also use OKRs to help people stay focused on the most important goals, and help them avoid being distracted by urgent but less important goals”
The way Google manages their staff and organization with OKRs has made them a global leader in innovation and technology.
Effective OKRs
In order for OKRs to be an effective management tool, companies need to understand how to write effective objectives. Google offers a few simple rules for writing OKRs:
“Objectives need to: express goals and intents they are aggressive and realistic must be tangible, objective, and unambiguous; they should be obvious to a rational observer whether an objective has been achieved."
- The successful achievement of an objective must provide a clear value for a company.
Key results need to: express measurable milestones which, if achieved, will advance objectives in a useful manner; must describe outcomes, not activities, they describe end-state impact of activities. Must include evidence of completion.
This evidence must be available, credible, and easily discoverable. Google also separates OKRs into two categories, committed and aspirational. Committed OKRs are OKRs that need to be achieved. These are OKRs that require a 100% expected score, anything less than 100% achievement of these types of OKRs show something is either poorly planned or executed.
Measuring, Scoring, and Tracking
Aspirational OKRs are OKRs that are not clear whether they are achievable or what resources are needed to make them achievable. Aspirational goals are considered successful if they achieve a 70% score. Google also uses a color-coded system for measuring goals. Google uses the following scale:
0-30% is red
40-60% is yellow
70-100% is green
OKRs are considered lofty goals, they are not considered incremental achievements. The expectation is not to achieve all of them. The role of OKRs are to be ambitious, easily hit targets are not what you are looking for in OKRs. OKRs can be made at every level within an organization, but it is important for all the OKRs to align with the company’s OKRs.
OKRs should be created at the individual level, the team level, division level and at the corporate level. Each aligning with the overall goals and mission of the company.