What is the OKR method?

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OKRs are a framework that companies can use to define, coordinate and achieve their objectives. What are OKRs and how can they be used? Here are some answers.

Imagine: your organization has an ambitious new goal: to reduce waiting times and improve customer satisfaction. The only problem? There's no system in place, and you don't know where to start. That's where OKRs (Objectives and Key Results) come in.

What are objectives and key results (OKRs)?

Implementing the OKR methodology helps organizations decide which goals matter most, and create a collaborative framework for achieving them. With key results, it enables everyone to focus on the specific functions needed, prioritize tasks and achieve desired goals. OKRs have helped many organizations, including Google, to successfully set priorities, create internal alignment, increase accountability and achieve their goals.

The OKR methodology was originally developed in the 1970s by Intel CEO Andrew Grove, who taught the concept to one of the company's most successful salesmen, John Doerr. Doerr went on to sit on Google' s board of directors and introduced OKRs to its founders, Larry Page and Sergey Brin. The company implemented OKRs in 1999 and has been using them on a quarterly basis ever since. Other companies, such as Disney, Samsung and Amazon, use OKRs to help them focus their resources and achieve their goals.

How are OKRs used?

The most effective OKRs give team members clarity about what they are trying to achieve, and how they will measure the steps to get there. OKRs are intended to provide a framework for groups, not individuals. The process is designed to ensure that all company departments work together towards the same goals. OKRs are made up of two elements: objectives and key results. An objective is usually followed by two or three key result statements.

Objectives are specific, clearly defined goals that will have a major impact on the company. They must be ambitious, but achievable, and align with the organization's strategic objectives.

Key results are the way in which progress towards a goal is measured or monitored on the way to achieving the goal. Key results serve as evidence that a goal has been achieved, or that an objective has been met.

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When to use the OKR method

Setting specific, ambitious goals can help improve team commitment and satisfaction. OKRs can be used to set quarterly, half-yearly or annual targets, depending on the needs of the organization, as well as what the team agrees on. OKRs are particularly useful with the rise of remote working: the framework encourages efficient workflow, enables communication and aligns employees with company objectives, even when they are spread over several sites.

OKR examples

Implementing an OKR starts with a clear, ambitious and time-bound objective statement. The next step is to decide on three to five key, quantifiable and actionable results to achieve the objective.

Example of OKR Marketing

OKR: increase brand awareness in 2024.

Key results :

• Win at least 10,000 new subscribers on TikTok
• Create 15 influencer partnerships
• Increase conversion rates by 3%.

Example of a human resources OKR

OKR: create a better system for integrating new employees within six months.

Key results :

• Comprehensive survey of all new employees on their induction experience
• Research the integration processes of at least three competitors
• Meet with department heads to obtain feedback on the integration process

OKR types

With the help of OKRs, organizations can define and achieve their immediate objectives, while preparing for future challenges. OKRs are generally divided into two types, committed and ambitious: while the two concepts are similar, the strategy is very different.

OKR engaged

Realistic and achievable, committed OKRs are the most important goals. They're the ones everyone agrees on.

OKR ambitious

Ambitious OKRs, or "Moonshots", are more ambitious goals that are likely to fail. Here, it's the intention and the attempt that are celebrated, rather than the result.

Benefits of OKRs

Interviewed in 2018 by Harvard Business Review about his book Measure What Matters John Doerr examines management methodology and the role OKRs can play in a business. In it, Doerr refers to the five benefits of OKR otherwise known as FACTS: Focus, Alignment, Commitment, Tracking and Stretching.

Focus

According to Doerr, no more than seven OKRs should be defined. The optimum number is three or four. Keeping to a small number helps to promote concentration. It's easier to prioritize what needs to be done, to decide which goals are most important, and to stick to a schedule.

Alignment

Many companies are starting to use OKRs to align their teams: everyone is invested in the vision and the resulting results. Keeping teams unified, rather than working in independent silos or going in different directions,maximizes the chances of success.

Commitment

Creating a harmonized, focused framework requires vertical commitment (start at the top and work your way down). Accountability and transparency must be the watchwords so that every team member can track progress, achieve milestones and meet expectations.

Measurement

OKR measurement is simplified through the use of tracking and metrics defined by written key results. Regular weekly meetings review progress and resolve any issues threatening alignment.

Exceeding

The intention behind overachievement is for companies to set themselves ambitious targets and key results, knowing that they probably won't reach the target. According to Doerr, while it's normal not to reach every goal, over time companies will continue to build on their past key results to go further and further.

Are OKRs and KPIs the same thing?

Although similar, OKRs and KPIs (key performance indicators) are different. KPIs are measures used to assess progress, while OKRs are methods for defining and achieving business objectives.