Shaping the cornerstone of any business, setting the objectives is among the most crucial yet most challenging task any business undergoes. One of the most successful frameworks to set and manage your corporate objectives is OKR, which stands for Objectives and Key Results.

So let’s take a step back in history and have a glimpse at how OKR came to be. 

Andy Grove, co-founder of Intel back in the days, adopted an older version of OKR known as MBO or Management by Objectives and developed into today’s model of OKR. In 1974, John Doerr joined Intel and learned all about OKR from Andy Grove. Later, John Doerr introduced OKR to Larry Page, Google’s co-founder at that time, and convinced him to apply the framework at Google. 

Intel and Motorola have a history of competition behind them which all changed once Intel began implementing OKRs. After rebooting their priorities in only four weeks, Intel witnessed skyrocketing success, surpassing Motorola by far in terms of sales, execution, marketing, and timelines. A manager at Motorola said back then, “I couldn’t get a plane ticket from Chicago to Arizona approved in the time you [Intel] took to launch your campaign.” 

OKR was adopted and has helped Google, Intel, LinkedIn, Spotify among many other companies become industry leaders while becoming great places for people to work.  

What is so special about OKR? Read more about how OKR has impacted these big names and led to their success.

The What: Objectives

Think of objectives as what your company needs to achieve in the near future. Objectives help set a clear direction for the whole company to be aligned with its corporate strategy. Adopting an aspirational mindset, organizations will surely achieve their strategy through setting significant, concrete, and action-oriented objectives.

The How: Key Results

Key Results are action-oriented tasks to how the objective will be achieved all while measuring the progress. In order to set KRs efficiently, they should follow the SMART criteria, which stands for specific, measurable, achievable, relevant, and time-bound. 

95% of employees don’t fully understand the company’s goals or what is expected from their end to achieve them, according to research by Harvard Business Review. That is why setting key results for every objective can help all employees align their work within the framework of the company’s overall strategy. Thus, employees will feel that their work is part of a bigger picture and has a real impact on the company’s growth.

Looking at the example above, the manager of Manchester United sets the objective to win the European Championship; thus, the team would need to set certain key results that would lead to achieving their objective. In such a way, the team will achieve the objective as measured by the following key results. 

The 4 Superpowers of OKR

OKRs have significantly helped major companies grow their businesses all while providing their teams with positive company culture. They were able to do so by simply valuing human capital over their products and services. Those big names reached where they are by relying on, as John Doerr calls them, OKR’s 4 superpowers. The below breaks down what each OKR superpower is. 

• Focus: Fueled by collective creativity and perspective, OKRs provide teams with the ability to continuously set and measure a company’s priorities and thus act on changing things whenever obstacles arise. OKRs provide teams with the ability to shift priorities in order to focus on what matters most. The beauty of OKRs is that they are very dynamic and can easily be adapted to any sudden change or bottleneck. 
• Alignment: OKRs allow an entire company prioritize, align, and focus the outcome of the work they do in an actionable and measurable way. Leaders set the company’s OKRs. Then, teams and individuals are empowered to determine how they can have the biggest impact and contribution to the executive objective by setting their own departmental and individual OKRs. 

• Transparency and Accountability: Because OKRs are transparent, everyone in the company can see each other’s goals, allowing employees to hold other employees more accountable. The transparency of each individual’s work provides them with the ability to see how their work impacts the company’s overall goal. OKRs and eliminates efforts by encouraging collaborations with other teams.
• Tracking: Teams set regular weekly meetings to follow up on their progress where managers and employees hold regular feedback loops in order to give each other feedback on their work, expectations, and coordination. Using OKRs yields to 22% higher stakeholder returns from more effective performance management of the overall company. 

Each team member in a company has exponential potential yet the majority of people and teams struggle to benefit from their true potential and achieve the desired results. When OKRs are used effectively, the results are extraordinary where companies become more focused, transparent, and aligned. Also, employees feel more empowered to make a meaningful difference for their companies and their careers. 

OKR helps: 

Setting the right type of objectives is the stepping stone for achieving greatness in your company. If you don’t have an objective management framework or you desire to implement OKR framework within your organization, reach out to us to request a free consultation session to share with you how OKR framework mixed with our workshops, that are based on psychology and science, can help you build high-performance teams and work culture that will lead to achieving your desired results.