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MBO Vs OKR: Meaning Definition And Key Differences

Management by Objectives or MBO is a strategic management tool, and a goal-setting management framework to align the organization around specific objectives. The core principle of MBO is to clearly define organizational objective to align management with employees across the organization. 

OKR is a goal-setting management system ideated by Andy Grove, during his tenance as CEO of Intel. As explained in the book “Measure What Matters” written by entrepreneur and venture capitalist, John Doerr,  the OKR framework consists of four key elements: focus and commit on priorities, align and connect for teamwork, track for accountability and stretch for amazing.

What are the key differences between MBO and OKR?
MBOs Intel OKRs
“What” “What” and “How”
Annual Quarterly or Monthly
Private and Siloed Public And Transparent
Top-down Bottom-up or Sideways
Tied to Compensation Mostly Divorced from Compensation
Risk Averse Aggressive and Aspirational

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

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MBO Vs OKR: Meaning Definition And Key Differences

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