OKR – An Effective Tool to Drive Goal Achievement
Developed by Intel’s CEO Andy Grove back in the 1970’s, the goal and management method Objectives and Key Results (OKR) has since become the de facto methodology for many tech giants like Google, Amazon and Spotify and is spreading like wildfire across successful startups. The method enables companies achieve their goals by focusing on what is most important – at any given time.
Qualitative Objectives & Quantitative Key Results
OKR is an abbreviation for Objectives & Key Results. The rationale behind OKR is to set truly aspirational and inspiring Objectives, and 3-5 supporting Key Results per objective to enable tracking of progress towards it. The OKR formula is simple in theory: “we will [Objective] as measured by [Key Results]”. For example, “we will reach a 100% growth rate within one year as measured by reaching an average monthly revenue of 200.000€, 10 new employees hired and one new physical store opened every two months”.
“OKR have helped lead us to 10x growth, many times over”
- Larry Page, co-founder of Google
Although not new and seemingly similar to other goal setting techniques (e.g. SMART), OKR has been proven as an effective tool to drive goal achievement with Google being a prominent advocate that has spurred adoption. Google implemented OKR already in 1999 with, at that time, just 40 employees and has since grown to 140 000 employees with OKR still in use companywide - demonstrating the sustainability of the method.
Creating alignment towards what matter
OKRs allow for transparency of corporate goals to encourage all employees to engage in the overall targets, and to see how their work brings value to all levels of the company. This is specifically valuable when organizations are growing rapidly or undergoing significant changes, where alignment throughout all departments and teams easily become challenging. Furthermore, incorporating OKR in the company culture allows for continuously setting new aspirational goals and high targets. Not reaching all Objectives should not be seen as mistake, rather the opposite.
“If you are achieving all of your goals, you’re not setting them aggressively enough”
- Lazlo Bock, co-founder & CEO of Humu
Yet so simple in its core, OKR has shown to bring value to multiple companies over the years. The implementation requires time, patience and an overall change in company culture, but for organizations that are ready to commit it has a real potential to make a difference.