Sometimes, the simplest tools make the greatest impact. John Doerr pitches his idea through a collection of case studies to demonstrate the effectiveness of OKRs. Objectives and Key Results (OKRs) are a simple yet clear tool for goal setting and innovating, irrespective of team size. This article takes a look at his very popular book, understand the core of the tool and see how it can be adapted to our life and work.
The author dips into his vast experience of working with Startups, many of whom are the biggest names in the industry today, to bring us instances of where OKRs delivered the impossible. OKRs are presented as the hose which channels the collective productivity of the organization in a single direction. But first, a quick background of its origins
History
The idea of uniting a company under a common goal is very old. For the purpose of a formal management text, Peter Drucker is credited with codifying it under Management By Objectives (MBO) in his 1954 book “The Practice of Management”.
Peter’s approach was the need of the hour when it came out. It helped organizations develop and scale under a singular banner. But as with most systems, with changing times and practices, it ran its course. It became a top-down system with limited participation from the frontline contributors. It was also less responsive, with arduous annual exercises that made rapid course correction almost impossible.
OKRs were the reimagined management tools that the current world needed. John credits Andy Grove, the legendary third CEO of Intel, with giving OKRs the their agile and scalable structure. Intel itself was the lab where OKRs were tested and polished.
What are OKRs
OKRs are, simply put, Objectives as measured by the Key Results that help achieve them.
Objectives are the What
The bold and ambitious goals that each organization, department or individual had set for themselves. In OKR culture, this is usually a quarterly exercise. This makes it more current and visible in the headlights of individuals and teams. It is a carefully thought out statement that is born out of the consensus of direct stakeholders.
Key results are the How
The clearly defined actionables whose successful completion ensures that the Objective is achieved. Key Results should be born out of a dialogue at various levels within the organization. This ensures that it is grounded in reality. It has to be measurable to enable frank conversations around progress. A good Key Result should have a quantitative and qualitative metric. This would help ensure that haphazard attempts to check a box don’t scuttle the exercise
General Rules
Collectively OKRs should be transparent and easily accessible across the Organization. This would help with assistance coming in from related quarters who have the capability to help in closure of these KRs.
OKRs should not become a catch-all. They are the reserved for the most important goals of the organization. The kind of goals whose achievement is not “good to have” but a consensus of what is a “Must” to grow at an accelerated pace.
The author suggests that a given Objective should be supported by no more than 3 to 5 carefully crafted Key results. This prevents a deluge of semi-related tasks that could drag the contributor away from the core mission. In OKRs, as with most things in life, less is more.
OKR Culture
To facilitate a culture of freewheeling horizontal contributions to each other’s OKRs an organization must adapt itself consciously.
- One way to go about that is to decouple OKRs from formal reviews.
- The other way is to deeply involve the rank and file of the organization in the design and deployment of OKRs.
- It also helps immensely if OKR visibility were supported with a no-hierarcy approach to communication. Any employee of the organization should have the opportunity to question or contribute to the OKRs of his or her Manager, Head of Department or even CEO.
This leads to the following positive developments
- Employees are no longer worried of making mistakes and are encouraged to shoot for the stars.
- Leaders are pushing you to take on or partner with ambitious Obectives.
- Teams can reach across functional boundaries to contribute to mutual achievements and be recognized for that.
- The interactions between managers and contributors are designed around creating the best opportunity to achieving the OKRs and not a cold review process.
This helps foster an organization that is designed to promote innovation and risk taking.
Superpowers
John Doerr illustrates the positive impact of implementing OKRs through the voices of the various companies where he helped install this practice. Through famous names like Google, Adobe and popular startups like Remind, Nuna & Myfitnesspal, John brings out the benefits of absorbing OKR into an Organization’s core.
Focus
OKRs help eliminate lesser goals with a “less is more” approach. Often organizations lose sight of their north-star in the midst of day-to-day tactical engagements. A widely visible and systemically monitored OKR system helps bring focus back to the battles that matter
Align
Connecting the outcome of OKRs at each level ensures synchronization. OKRs tie day-to-day activity into the Org’s vision. Making OKRs visible across the org allows functionally separate departments to work together. This allows for serendipitous collaboration*
Commit
Executive buy-in is the key trigger for a successful roll out of OKR. This ensures that the top management can champion its benefits. Employees are aware of the transparency, keeping him/her committed to achieving the metrics. It exposes lag, allowing timely course correction
Track
The objective nature of Key Results lends itself to systemic tracking. Modern tools like SalesForce, JIRA, ZenDesk and ClickUp come with OKR tracking capabilities built in. But with the necessary self discipline the system is simple enough to be implemented with pen and paper
Stretch
It allows the company to encourage its contributors to rally under a stretched goal. Stretch goals accelerate the need for innovation. A 10% growth is a tweak but a 10x growth is a fundamental redesign. Leadership can drive stretch goals by placing the targets in larger context.
*The concept of “serendipitous collaboration” as well as examination of work environments and their impact on productivity is examined in greater detail in Cal Newport’s book Deep Work. You can checkout a summary here
Notes
While large organizations can invest in custom-built resources to incorporate these tools, very capable solutions can be built for free using popular resources
Excel Template by Perdoo
OKRs in Notion (BY William Nutt)
Weekly check-in on the progress is encouraged to provide the necessary resources and coaching to achieve them.
The author is quick to point out that one should not be afraid to modify, redirect or even stop a weakening OKR through mutual consensus.
“Our Goals are servants to our purpose not the other way around”
Each OKR cycle is concluded with Scoring, Self Assessment and Reflection on the lessons learnt before setting up the next quarterly cycle.
When using OKRs to aim for the stars, context is everything.
A Taxi Fleet operator trying to expand his fleet by 20% thinks of raising funds through loans and reserve profits, but when you decide to design a taxi fleet that grows at 10x annually you have to question the definition of the business model and of fleet ownership, enter Uber.
Case Study
Consider the following. BetterButter Inc is facing tough competition in the industry. They decide to band together and fight for industry supremacy. This is what the the battle would like through an OKR lens
CEO
Be the No. 1 Butter Brand in the country by end of the Year
Highest Sales amongst competition by Dec 2020
Rank No. 1 in Butter Times, USA
Become the preferred employer in the Butter industry
With this as the rallying cry for the company, the CEO’s OKR then becomes the foundation for each of the departments. The Key Results of the CEO become the Objectives for relevant functional divisions.
SALES
Highest Sales amongst competition by Dec 2020
Track competition sales on T+1 basis through Sales analytics
Increase Sales team strength by 20% by end of August 2020
Raise High-Value Institutional Sales by 25%
Deliver 10 new active Sales channels by end of October 2020
MARKETING
Rank No. 1 in Butter Times, USA
Submit Customer Satisfaction Survey to Butter Times by Nov 2020
Launch 2 new Institutional and 2 new Retail Variants by Aug 2020
Release Ad campaigns on Institutional Marketplace
Secure endorsement from BetterBread Inc by August 2020
PRODUCT
Release 2 new Institutional and 2 new Retail Variants by Aug 2020
Ready R&D Shortlist for Variants by June 2020
Release Test Samples to Mktg for field survey by Mid July 2020
Clear Packaging and design by end July 2020
Test production cycle with manufacturing unit 1st Week Aug 2020
HR
Become the preferred employer in the Butter industry
Obtain Hiring wishlist from all department heads by July 2020
Conclude New Sales hires by August 2020
Publish 5 PR outreach articles on Hiring Platforms by July 2020
Finalize real-time variable compensation tracking software
Observations
The OKR efficacy in this case study is tested by asking the following questions
- Are the Goals clearly defined?
- Are the Key results measurable?
- Do they have a Quantity and Quality metric where relevant?
- Will delivering the Key Results at each level ensure that the Objective is achieved?
- Does each department’s OKR contribute to the Organization’s OKR?
If the answer to these questions are YES, then there’s little to stop BetterButter Inc from getting to where they want. The power of OKRs lie in this simplicity of direction and transparency of audit.
These OKRs then trickle down to the OKRs of each contributor in the company. Everyone’s OKRs are accessible through a shared drive within the company. Timely check-ins from the department heads ensure that everyone is on track. People falling behind receive help from their managers and even serendipitous help from other departments who share a part of the goal.
For instance, The front-end sales team, tasked with generating 10 new sales channels, receive a boost in their efforts when their Product Team brethren delivered samples of their new product variants ahead of schedule to help them along.
This was possible because the OKR tracker of the sales team showed red in the common dashboard. The product team had a quick meeting within themselves to see if they could help out. The sales team organized a pizza party for the product team once that quarter was successfully wrapped up (if they know what’s good for them).
Even if the Organization does not achieve its goal they will be able to clearly see where they failed. This will make them better prepared while setting up the next OKR cycle.
CFR: The Companion Piece to OKRs
CFRs represent Conversations, Feedback and Recognition.
This is a departure from the Annual Performance Apprsaisal process. Instead of looking at performance as an objective, annual, outcome based assessment; CFR looks at it as an exercise of Continuous improvement. CFRs incorporate the subjective human element that is an often overlooked yet key component of the organization’s engine.
Paired with OKRs, CFR replaces the aging Performance Management system which has become an arduous and expensive annual drudge for many large organizations. Rather than a post mortem assessment of the outcome, OKRs and CFR become the proactive boost for achieving the desired result. Lets examine the components real quick
Conversations
A bi-directional dialogue aimed at coaching (not reviewing) becomes the base of continuous improvement for each contributor. The conversations are process oriented and not just focused on outcome. This also allows the Manager and Contributor to evaluate what each of them bring to the table with intent to achieving the agreed OKRs. These conversations are necessarily decoupled from rewards to keep them honest and productive.
Feedback
Especially useful in flatter organizations where parallel teams from differrent functions work in common projects. But also relevant for any kind of organization. Real-time feedback on the impact of one’s work is essential for course correction. Effective feedback is honest, concise and delivered with intent to fix without discouraging. A good feedback mechanism is two-way and considers 360 degree inputs for a holistic picture.
Recognition
With a higher frequency and a granular approach, modern recognition aims to move away from “Employee of the month” to “Notable Achievements”. This acts as a morale booster for contributors who can see their efforts being recognized on a more frequent basis. Highlighting small wins allows people to choose to repeat more of those. A collection of small wins often leads to larger positive outcomes. An organization that chooses to broadcast the learning from these successes creates an accessible model for others to emulate. Thus a virtuous cycle is born.
OKRs for small teams
Small teams, even a team of one, can benefit from incorporating an OKR system from an early stage. In fact, many of John’s examples revolve around startups that chose to use OKR as their growth driver at a very early stage. As an experiment, this fledgling blog has chosen to start on OKRs to check the proof of the pudding.
So whether you’re a moonlighting photographer, an aspiring blogger, got a novel on the side or working on the startup idea with your friend you’re not too small to incorporate OKRs to give you direction.
Here’s how you can go about it.
- Create a personal, quarterly OKR
- In a very small team (or a team of One) inform a close circle of friends/family/mentors and empower them to keep you committed
- Create and maintain an accessible progress bar (Try These: Link 1 or Link 2)
- Give access to your circle so they know if you are on track and when you need help
- Create a scheduled feedback loop within your circle
- Record the feedback for each concluded OKR cycle and identify Key Learnings
- Incorporate the learning into the next cycle
Resources & Acknowledgements
- To delve into the subject and get real world examples, get the book: Measure What Matters by John Doerr
- If you’re sold on OKRs and want to keep updated on the subject then head to John’s website: Whatmatters.com
- For a comprehensive OKR platform for your organization, head to: Weekdone.com
- All inclusive project management with OKRs, Team Management and Much More: ClickUp.com
- Icons made by Eucalyp from www.flaticon.com
Conclusion
John’s lessons are practical and his examples are largely simple and their impact, verifiable. From Google, which made OKRs the emulated success to Adobe whose transition to CFR had a palpable impact on employee turnover the book is full of real world examples.
While the principle seems obvious at first, it would surprise you how often individuals and organizations sit in the same canoe and row in the opposite directions. You could put the most productive people under the same roof yet end up nowhere. Without a binding direction each individual interprets the goal through their own lens.
Uniting talent under the same banner has been the foundation of great kingdoms.
In this story, the banner is OKR.
Disclosure: This article may contain affiliate links. Which means that, at no cost to you, I get a small commission if you choose to buy through my links. Please go through my Disclaimer notes for more info
