Recommended reading: How can startups successfully set up business OKRs?
What is OKR
OKR, aka Objective & Key Result, is a collaborative goal-setting methodology used by organizations, teams, and individuals to set ambitious goals with measurable results.
Some of the biggest tech companies in the world use OKRs including Google, Zynga, Upstart, and many others. OKRs were invented at Intel Corporation.
The Objective is “What do we want to achieve,” and the Key Results are “How are we going to measure the progress.”
The new generation OKR framework has one more component: “initiatives,” which are all the projects and tasks that will help you achieve your objective & key result.
History of OKRs
- 1954 – Peter Drucker published a book called “The Practice of Management“. In which, he introduced the concept of MBO— Management by Objectives
- 1970 – Andrew Grove co-founded and then CEO of Intel borrowed the idea of MBO from Peter Drucker and developed the concept of OKRs.
- 1974: In 1974, John Doerr joined the management team at Intel and learned more about the OKR framework.
- 1999 – John Doerr introduced OKRs at Google
- Current Day – More and more companies are adopting OKR as an indispensable part of their company culture.
OKRs help to bring the strategic focus your team needs to drive great outcomes.
When you use OKRs, the first thing you do is to identify what are the key drivers for strategic impact, and once selected, OKRs let your team avoid costly distractions, say no to those thousand things and let them focus on what matters the most to the company.
OKRs help you build a culture of accountability as they create an outcome-based mindset and let your team be accountable for outcomes, not output. OKRs demand you to keep a single owner for a Key Result hence empowering that individual to work more autonomously and be accountable for the outcome.
Faster decision making
OKRs let your team make data-driven decisions faster as they are transparent.
With OKRs, everyone is aware of who is working on what and what is the status/progress on any goal.
With this real-time visibility, managers can also quickly identify where they should prioritize efforts in order to bring high impact.