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What Is OKR? The Goal Setting System To Scale Up Your Business

Back in the 1970s, Intel was among the most respected and admired companies in Silicon Valley. During that time Intel’s CEO, Andy Grove, was the man who managed to drive organizational change.

Andy Grove did that via a goal setting process called OKRs or objectives and key results. Where the objective is the direction, toward which the organization needs to be in the medium term.

And the key results are milestones, things that allow the company to get there. Those key results need to be easily trackable, understandable and shared across the company.

In its purest form OKRs consists primarily of four superpowers:

  1. Focus and commit to priorities: this superpower focuses on making clear what matter and what doesn’t. More precisely it allows whole teams and departments to decide where the focus is and dispel any confusion
  2. Align and connect for teamwork: one essential ingredient of the OKRs is its transparency and the fact that it needs to be openly shared across the organization, from the CEO down to each team and member of the organization. OKRs is not a siloed process but rather a transparent goal setting tool
  3. Track for accountability: OKRs are data-driven. It doesn’t stress though on a countless number of metrics that help to increase the level of noise. OKRs instead focuses on a few critical metrics to measure the impact on the business
  4. Stretch for amazing: Objectives set in OKRs aren’t conservative, those are aggressive, hard yet possible and attainable. From this balance, OKRs brings the organization forward

Those superpowers are kept together by continuous improvement and corporate culture.

How is OKRs different from MBOs?

mbo-vs-okr

For those that know Management by Objectives or MBO, it might be easy to confuse it with OKRs. However, there are a few key differences. At its core, the MBOs focused on what while it was primarily top-down and risk-averse. 

By converse, OKRs focuses on the “what” (direction) and “how” (key results). Rather than an annual review process which might make it too complicated and formal OKRs follow a quarterly or monthly schedule which is public and transparent and usually bottom-up. 

Where MBOs is risk-averse, OKRs is aggressive and aspirational.

OKRs objectives have a few key elements such as:

  • ambitious
  • qualitative
  • time bound
  • actionable by the team

While OKRs key results are primarily:

  • measurable and quantifiable
  • make the objective achievable
  • lead to objective grading
  • difficult but not impossible

Suggested reading: 

OKRs-book

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The post What Is OKR? The Goal Setting System To Scale Up Your Business appeared first on Four-Week MBA.



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