What are OKRs?

Origin story

Who invented OKRs?

What are OKRs? OKRs (Objectives and Key Results) were popularized by John Doerr, a venture capitalist at Kleiner Perkins, who learned about the framework from Andy Grove, the former CEO of Intel, in the late 1990s.

Andy Grove, exceptional businessman and creator of OKRs

Andy Grove was a Hungarian-born American businessman, engineer, author and a pioneer in the semiconductor industry. He was the CEO of Intel Corporation from 1987 to 1998, and helped the company become the world’s largest manufacturer of microprocessors.

Grove came up with the concept of OKRs while he was at Intel. He believed that setting clear, measurable objectives and establishing specific, quantifiable goals to achieve them were crucial to the success of a business. He began using OKRs as a way to align the entire organization around specific, measurable goals and to track progress towards those goals.

The framework helped Intel to achieve significant growth during Grove’s tenure as CEO, and he wrote about it in his book “High Output Management”.

Grove is widely considered as one of the most influential figures in Silicon Valley and his management philosophy is still studied and applied by many companies today.

John Doerr, responsible for popularizing OKRs the world over

John Doerr wrote “Measure What Matters” in which he describes how OKRs can be used to achieve business success. The book is based on Doerr’s experience working with companies like Google, Intel, and Amazon, which have all used OKRs to achieve significant growth and success.

The book is designed to be a practical guide for managers, leaders, and entrepreneurs, providing a step-by-step process for creating and implementing OKRs in their companies. Doerr also shares real-life examples of how OKRs have been used to help companies achieve their goals, as well as the lessons he has learned along the way. The book is considered as a must-read for anyone looking to implement OKRs in their business, or for those looking to achieve more from their current OKR program.

One of the most valuable aspects of Measure What Matters are the real-life examples of companies that have successfully implemented OKRs. The book features mini case studies from a diverse range of organizations, including startups, fast-growth companies, and non-profits. This allows the reader to see how OKRs can be adapted to different types of companies and organizations. Often, one of the main concerns that founders have with OKRs is that they may only work for large companies like Google. However, by providing these diverse examples, Doerr dispels this myth, and demonstrates that OKRs can be effective for any ambitious and outcome-oriented organization.

Who uses OKRs?

Does Netflix use OKRs?

Yes, Netflix uses OKRs in their business. The company has implemented a unique version of OKRs, called “Freedom and Responsibility Culture” which is part of their culture deck which you can access here.

The company uses OKRs to align the organization around specific, measurable goals and to track progress towards those goals.

OKRs at Netflix are set by teams, not individuals, and are aligned with the overall company strategy. The company encourages its employees to think big, and to experiment and take risks in pursuit of their objectives, this way it helps to keep the focus on the most important things and to move quickly.

Does Microsoft use OKRs?

Yes, Microsoft uses OKRs in their business. The company has been using OKRs for many years and it’s one of the important part of their performance management system. Microsoft uses OKRs to align the organization around specific, measurable goals and to track progress towards those goals.

OKRs at Microsoft are set by teams, not individuals, and are aligned with the overall company strategy. The company uses it to identify and prioritize the most important initiatives, measure progress and make adjustments as needed.

Microsoft’s OKR system also helps to keep teams aligned, focused and motivated, which helps them to achieve their goals.

Does Apple use OKRs?

The company is known for its secrecy and it does not publicly disclose much information about its internal practices and processes. While it’s possible that Apple may use OKRs or a similar framework to align the organization around specific, measurable goals and track progress, there is no official confirmation of this from the company.

Not satisfied with this, we spoke to a number of the staff at the Cupertino headquartered business and learned that they do indeed use their own-branded version of OKRs to guide global staff on resource allocation and focus.

Does Google use OKRs?

Yes, Google uses OKRs in their business. The company has been using OKRs for many years and it’s an important part of their performance management system. Google uses OKRs to align the organization around specific, measurable goals and to track progress towards those goals.

OKRs at Google are set by teams, not individuals, and are aligned with the overall company strategy. The company uses it to identify and prioritize the most important initiatives, measure progress and make adjustments as needed.

Google’s OKR system also helps to keep teams aligned, focused and motivated, which helps them to achieve their goals. The company has even developed an internal software called “Google Goals” which allow the employees to set, track and achieve their OKRs.

There are rumours that Google lets its artificial intelligence write its OKRs. Whilst not publicly confirmed, employees we’re close to have confirmed this is the case. In any case, Google is known for being at the forefront of AI research and development, and it’s hard to believe they’re not using AI for OKRs given they are using AI in various aspects of their business.

Why are OKRs so popular?

There’s actually only really one person responsible for the popularity of OKRs. Since the 1990s, John Doerr has been singing its praises whilst putting the OKR framework to work in businesses across the globe. As a result of his efforts, CEOs across the planet have been asking “What are OKRs?” for the last 30 years.

John Doerr and Measure What Matters

“Measure What Matters” is a book written by John Doerr, a venture capitalist at Kleiner Perkins. The book is about the OKR framework, which he popularized in the late 1990s. The book provides a comprehensive guide on how to set, track and achieve objectives and key results.

In the book, Doerr describes his experiences with OKRs and how they have helped companies achieve significant growth. He explains how OKRs can be used to align the entire organization around specific, measurable goals and to track progress towards those goals. He also provides examples from his own experiences with OKRs at companies such as Google, Intel and Amazon.

The book is divided into three parts: part one explains the OKR framework and how it works; part two provides case studies of how OKRs have been used to drive growth and success in different industries; and part three provides guidance on how to implement OKRs in your own organization.

The book is very practical and provides step-by-step guidance on how to set, track and achieve OKRs, as well as how to overcome common challenges that companies may face when implementing OKRs. It is a great resource for any organization looking to improve performance and achieve growth through the use of OKRs.

What are the pros and cons of OKRs

It’s important to keep in mind that OKRs, like any performance management system, can have pros and cons, and it’s important to evaluate whether it’s the right fit for your organization and to implement it in a way that works best for you and your teams.

The advantages of OKRs

The main pros of OKRs include:

1. Alignment: OKRs help align the entire organization around specific, measurable goals, which helps to keep teams focused on the most important initiatives.
2. Clarity: OKRs provide a clear and measurable way to track progress towards goals, which helps to keep teams motivated and on track.
3. Prioritization: OKRs help to identify and prioritize the most important initiatives, which helps to ensure that resources are being used effectively.
4. Flexibility: OKRs are flexible and can be used by teams and individuals at all levels of the organization.
5. Transparency: OKRs are transparent and progress towards goals can be easily tracked and reported.
6. Continuous improvement: OKRs help organizations to measure progress, make adjustments and improve performance over time.
7. Goal-oriented: OKRs keep everyone’s focus on achieving specific objectives, which is important for companies that want to achieve growth and success.
8. Accountability: OKRs create accountability and it’s easy to identify who is responsible for achieving a specific goal.

This disadvantages of OKRs

Some of the main cons of OKRs include:

1. Complexity: OKRs can be complex to implement and may require significant time and resources to set up and maintain (hint: it doesn’t have to be hard – check out our step-by-step implementation cheatsheet here).
2. Rigidity: OKRs can be rigid and may not allow for flexibility or changes in direction.
3. Short-term focus: OKRs may lead to a short-term focus, which can be detrimental to long-term goals and strategy.
4. Overburden: OKRs can be overwhelming for employees and may lead to burnout if expectations are not appropriately communicated by management. Most importantly employees need to be aware that OKRs are not the same as performance management and 100% achievement of an OKR typically actually means your OKRs were not aggressive enough. In other words, as an employee, you’re not actually expected to achieve your OKRs. The general rule of thumb is to achieve 70% of your OKRs on average.
5. Lack of creativity: OKRs may restrict creativity and experimentation, which can stifle innovation.
6. Misaligned incentives: OKRs can create incentives for employees to focus on achieving specific goals, rather than working on what is best for the company as a whole. This really comes back to management giving deep consideration to the stated objectives of the business and how they cascade down throughout the various divisions and functions of the business.
7. Limited perspective: OKRs are based on quantitative data and not on the qualitative data, which can lead to a limited perspective on the company’s performance. This is a common claim by employees but it really comes down to management’s communication of the goals. Often staff will say “the business is too focused on profit, etc.” but the reality is that profit facilitates the ability to fund the other qualitative outcomes that employees enjoy. As such, there’s always going to be a level of discontent from a focus on qualitative measures like revenue and profit.
8. Limited feedback: OKRs are based on a specific time frame, which can limit feedback and make it hard to identify the root cause of problems or opportunities. Further, OKRs don’t foster a deep review process of the failures and successes during the quarter. This is ok in a fast-growing organisation, though, as it’s up to management to identify the shortfalls of last quarter and re-align staff on the objectives of the coming quarter.

There are valid criticisms for OKRs but the reality is that no system is perfect. The most important thing is finding a system that your staff will actually stick to and persist with. Check out this post on the common traps that businesses fall into when creating their OKRs.

Don’t all performance management systems suck?

Yes and no… Generally, employees hate doing performance reviews, particularly in large organisations where they feel like a mandatory task that is rarely read by their managers and is ultimately just a massive waste of time.

It’s for this reason that businesses need a light-weight approach to goal-setting. The objective is not to force people to fill out 4 x 360 Review forms per year, it’s to get them to aligned with the company’s objectives so that when they’re faced with the decision of suggesting a new product module to an exisiting client, or staying silent so they don’t create more work for themselves, they do the former!

What is an OKR?

The concept behind OKRs is to set specific, measurable goals and track progress towards those goals in order to align the organization, improve performance, and achieve growth. OKRs are a framework for setting and achieving goals that is intended to be simple, flexible, and action-oriented.

An OKR consists of two parts: an objective, which is a specific, measurable goal that the organization or team is trying to achieve, and key results, which are specific, measurable metrics that will be used to track progress towards the objective.

The objective should be ambitious and inspiring, and should be something that the organization or team is excited to work towards. The key results should be specific and measurable, and should be used to track progress towards the objective.

OKRs are usually set on a quarterly basis, and progress is tracked and reported regularly. They are typically set by teams, not individuals, and are aligned with the overall company strategy.

The concept behind OKRs is to create a clear and measurable way to track progress towards goals, to align the entire organization around specific, measurable goals, and to identify and prioritize the most important initiatives. It’s a simple framework that can be used to drive growth and success in any organization.

How do OKRs create business alignment?

OKRs create business alignment by aligning the entire organization around specific, measurable goals. This alignment helps to ensure that all teams and individuals within the organization are working towards the same goals and that resources are being used effectively.

OKRs provide a clear and measurable way to track progress towards goals, which helps to keep teams motivated and on track. By regularly tracking and reporting progress, teams can see how their work is contributing to the overall success of the organization.

OKRs also help to identify and prioritize the most important initiatives, which helps to ensure that resources are being used effectively. This helps to ensure that the organization is working on the initiatives that will have the biggest impact on the company’s success.

OKRs align the entire organization around specific, measurable goals and keep teams focused, motivated and aligned on the most important initiatives. This helps the organization to achieve growth and success by using resources effectively and achieving specific goals that are aligned with the company’s strategy.

Common mistakes when setting OKRs

It’s important to keep in mind that OKRs, like any performance management system, can have some common mistakes, and it’s important to be aware of them and to implement them in a way that works best for your organization and your teams.

Some common mistakes when setting OKRs include:

1. Not making them specific or measurable: OKRs should be specific and measurable in order to track progress towards the goal. Without specific and measurable goals, it becomes difficult to determine if the goal has been achieved.
2. Not aligning them with overall company strategy: OKRs should be aligned with the overall company strategy in order to ensure that all teams are working towards the same goals. Without alignment, teams may be working on initiatives that do not contribute to the overall success of the organization.
3. Not involving all relevant stakeholders: OKRs should be set by teams, not individuals, and should involve all relevant stakeholders in order to ensure that all perspectives are considered. Without input from all relevant stakeholders, the goal may not be achievable or may not align with the overall company strategy.
4. Not making them challenging enough: OKRs should be ambitious and challenging in order to drive growth and success. Without challenging goals, teams may become complacent and may not push themselves to achieve their full potential.
5. Not tracking and reporting progress regularly: OKRs should be tracked and reported on regularly in order to ensure that teams are on track to achieve their goals and to make adjustments as needed. Without regular tracking and reporting, it may be difficult to determine if the goal is achievable.
6. Not providing feedback and support: OKRs should be supported by feedback, coaching and resources that are needed to achieve the goal. Without feedback and support, teams may struggle to achieve their goals.

How many OKRs is too much?

The number of OKRs that an organization or team should set will vary depending on the specific circumstances. However, generally speaking, it’s important to keep the number of OKRs to a manageable level so that teams can focus on achieving a few key goals, rather than trying to achieve too many goals at once. Again, OKRs are all about focusing on the 3-5 key things that will drive your business forward!

One best practice is to set one to three OKRs per quarter for each team, with a maximum of five at the organization level. This allows teams to focus on a few key goals and to achieve them in a relatively short period of time. Setting too many OKRs can be overwhelming and can lead to teams becoming spread too thin, making it difficult to achieve any of the goals.

It’s also important to keep in mind that OKRs should be aligned with the overall company strategy and should be achievable within a specific time frame. Setting too many OKRs can lead to goals that are not aligned with the overall strategy or that are not achievable within the given time frame.

The number of OKRs should be manageable and aligned with the overall company strategy and achievable within the specific time frame. One to three OKRs per quarter per team, with a maximum of five for the entire organization, is a good starting point but it will depend on the specific circumstances of the organization and the team.

Are OKRs used for performance management?

OKRs can be used as part of a performance management system, but they are not the only component of performance management.

Generally speaking, performance management systems are focused on measuring the performance of individual employees as opposed to OKRs which focus on guiding employees on where to focus their efforts. It’s undeniable that there’s crossover here, but it’s still an important difference that we expand on below.

Performance management is a broader concept that includes setting goals, tracking progress, providing feedback and support, and evaluating performance. OKRs are one tool that can be used as part of a performance management system, but they should be used in conjunction with other performance management practices such as regular check-ins, performance evaluations, and providing feedback and coaching.

OKRs are used to set specific, measurable goals and track progress towards those goals in order to align the organization, improve performance, and achieve growth. But performance management is a process that goes beyond goal setting, it also includes providing feedback, coaching, and resources to help individuals achieve their goals, evaluate performance, and make decisions about rewards, promotions, and other opportunities.

Should OKRs be realistic?

OKRs should be realistic in the sense that they should be achievable within the given time frame. If a goal is unrealistic and not achievable within the given time frame, it can lead to frustration and demotivation among team members.

That being said, OKRs should also be ambitious and challenging in order to drive growth and success. The balance between being realistic and ambitious is key to make sure that OKRs are effective.

When setting OKRs, it’s important to consider the resources and capabilities of the team, as well as any external factors that may impact the ability to achieve the goal. This will help to ensure that the OKRs are realistic and achievable within the given time frame.

Are OKRs only for big companies?

OKRs are not only for big companies. In fact, small businesses can benefit even more from the use of OKRs. Having a smaller team allows for more flexibility and quick adaptation, which can be difficult in larger teams. By setting achievable and relevant goals, OKRs help keep small business employees focused on a few key areas, increasing productivity and success.

So, the answer is no, OKRs are not only for big companies, but can be effectively adopted and used by businesses of all sizes.

Common misconceptions of OKRs

It’s important to keep in mind that OKRs is a framework to set and achieve specific, measurable goals, align teams, and improve performance. Misconceptions about OKRs can lead to ineffective implementation and lack of buy-in from employees. It’s important to understand the true nature of OKRs. Common misconceptions include:

1. OKRs are only for the executive team: OKRs should be set by teams, not individuals, and should involve all relevant stakeholders.
2. OKRs are rigid and inflexible: OKRs can be adjusted as needed to reflect changes in the business environment or progress towards the goal.
3. OKRs are only for short-term goals: OKRs can be used for both short-term and long-term goals.
4. OKRs only focus on quantitative goals: OKRs can also be used to set qualitative goals, as long as they are specific and measurable.
5. OKRs are only for the corporate level and cannot be used at the departmental level: OKRs can be used at all levels of an organization, from the corporate level to the departmental level, to align teams and improve performance.
6. OKRs are a one-time process: OKRs should be reviewed and updated regularly to ensure that they remain aligned with the overall company strategy and continue to drive growth and success.

Is OKR a replacement for KPI and what is the difference between an OKR and a KPI?

OKRs and KPIs (Key Performance Indicators) are both used to measure performance and track progress, but they have different purposes and are used in different ways.

OKRs are a framework for setting and achieving specific, measurable goals. They help align teams, improve performance, and achieve growth. They are a way to set clear, measurable targets and track progress towards those targets over a specific time frame.

KPIs, on the other hand, are specific metrics that are used to measure performance against a set target. They are used to track progress on specific business objectives over a specific period of time. KPIs are used to measure the performance of an organization, a department, or an individual.

While OKRs and KPIs are both used to track performance, OKRs are used to set and achieve specific, measurable goals, while KPIs are used to measure specific performance metrics. They are complementary and can be used together to gain a better understanding of performance and progress.

Are OKRs the same as SMART goals?

OKRs and SMART goals are both frameworks for setting and achieving specific, measurable goals, but they have some differences.

SMART goals are a framework that stands for Specific, Measurable, Achievable, Relevant, and Time-bound. The idea behind SMART goals is that they should be specific and clear, measurable, achievable, relevant to the overall strategy, and have a specific time frame for completion.

OKRs, on the other hand, is a framework that stands for Objectives and Key Results. OKRs focus on setting and achieving specific, measurable goals and aligning teams, improving performance, and achieving growth. OKRs are also time-bound, but they also include regular check-ins and progress reviews.

Both frameworks have the same goal, to set and achieve specific, measurable goals. But the OKRs focus more on aligning teams and improving performance, whereas SMART goals focus on setting specific, measurable, and achievable goals.

In short, OKRs and SMART goals are both frameworks for setting and achieving specific, measurable goals, but they have some differences in their focus and implementation. Both frameworks can be used together to gain a better understanding of performance and progress.

Generally, when setting key results for your objectives as part of an OKR process, you’ll set SMART goals. For that reason, SMART goals are almost a sub-set of OKRs.

What are some paid OKR tools to help with goal setting?

There are several paid OKR software tools available to help with goal setting, including:

1. Zintly: One of the most modern and easy-to-use OKR software solutions. It’s also one of the only pieces of software that aren’t trying to sell you a broader HR platform. This makes it great for a business that simply wants to get started with OKRs without having to completely change their software stack.
2. Betterworks: This software provides a platform for setting and tracking OKRs, as well as performance management and employee feedback.
3. 7Geese: This software provides a platform for setting and tracking OKRs, as well as performance management and employee development.
4. 15Five: This software offers a platform for setting and tracking OKRs, as well as performance management and employee feedback.
5. Alignate: This software provides a platform for setting and tracking OKRs, as well as performance management and analytics.
6. Klaxoon: This software offers a platform for setting and tracking OKRs, as well as performance management and team collaboration.
7. Align: This software provides a platform for setting and tracking OKRs, as well as performance management and employee development.
8. OKRs.com: This software offers a platform for setting and tracking OKRs, as well as performance management and analytics.

If you’re a small business, this post might be useful in filtering out the noise when it comes to finding the right OKR software solution for you.

Conclusion

In conclusion, OKRs are a powerful framework for setting and achieving specific, measurable goals, aligning teams, improving performance, and achieving growth.

By using OKRs, companies can create a clear and measurable direction for their business, align teams and individuals to work towards common goals, and track progress and performance over a specific time frame.

Additionally, OKRs can be used at all levels of an organization, from the corporate level to the departmental level, to align teams and improve performance.

Overall, using OKRs can help organizations achieve their goals, increase productivity, and drive growth and success.