OKR

Objective Key result

What is OKR
• OKRs were designed by Andy Grove of Intel in 1970’s, and
Google was quick to incorporate OKR planning into its quarterly
and annual planning.
• Google now considers annual OKRs instrumental to the
company’s success.
• This success has encouraged many organizations to adopt OKR
best practices for their own planning purposes from SMEs to
the Fortune 500: Google, LinkedIn, Intel, Zynga, Sears, Oracle
and Twitter are just some well-known OKR users who love and
use them.
 A major chunk of OKR is to
make sure that everyone
knows what they need to do,
or what’s expected of them.
 CLARITY COLLABORATION ACCOUNTABILITY

Why OKR

FLEXIBILITY OUTCOMES FOCUS AND

BASED DISCIPLINE
 OKR
increased •Sears Holdings, a leading US-based retailer focused on connecting online and offline
experiences, performed a study on the ROI of goal management amongst 20.000

sales by 8,5% associates. The study was performed in the summer of 2013 and again one year
later in the summer of 2014. For the focus group who used OKR, they saw an
increase in their average sales per hour from $14.44 per hour to $15.67. This

and revenue translated to an average increase in sales of 8.5% over 1 year.

by 26%

Why OKR
OKR •To measure the general impact of OKRs on performance, the Sears study classified
employees into three tiers. High performance (roughly the top 20%), middle

increased performance (middle 70-75%) and low performance (bottom 5-10%).Then, they
categorized each worker into three groups based on their use of OKR and compared
changes in performance between 2013 and 2014. The results were significant:

overall •Group 3 – No use of OKR. This group showed no change in performance level.
•Group 2 – Irregular use of OKR. This group showed some improvement. Even just
using OKR once made them 3% more likely to move up a whole performance level.

performance In this group, the quality of OKRs was not even considered, yet there was a
statistically significant, but small increase in performance.
•Group 1 – Regular use of OKR. This group were 11.5% more likely to move into a
by 11,5% higher performance bracket.
When

While the majority of OKR usage

OKRs are typically part of the is quarterly, some companies will
quarterly planning process. also set annual or monthly OKRs.
Components of OKR

The Objective Key Results Initiative

3-5 key objectives on company, team or personal a set of 2-5 key results Description of the work you’ll do to influence a Key
levels. provide the means of measuring progress toward Result
Where do you need to go: WHAT TO ACHIEVE the objective: HOW TO ACHIEVE OBJECTIVES If an Objectives is your destination and a Key Result
Sets a high but measurable goal for the company OKR results can be based on growth, performance, shoes the distance to go, and initiatives describes
or engagement. what you’ll do to get there (take a car, row a boat,
Objectives should demonstrates where you want to etc)
go, ambitious, qualitative, time bound and Often they are numerical, but they can also show if
actionable by the person or team. something is done or undone, so a binary 0 or 1.
Use SMART goal setting
Not Activities
KPI vs OKR

KPI OKR
mostly tied to individual performance. linked to broader organizational goals

put in place to keep day to day operations in check, and to focuses more on your priorities at a strategic level
evaluate the success of a particular process or activity.

primarily focus on quantifying goals and priorities to track Defining an objective and jotting down ways to get there
performance at an operational level.

One way direction Two way dialogue

Escalation and risk avoidance Ownership and “try fasy, fail fasy”

Static mindset (Check the box) Adaptive mindset- ouncome driven

Quarterly company meeting to review grades last OKR and, developing
and aligning new OKR with larger company goals.

A collective staff meeting then selects two or three OKRs

Ask employee to submit new OKR where team or department should

focus

Communicate your Objectives and Key Results to everyone

Update result indicators regularly - preferably weekly/bi weekly

How to Create OKRs

 Are not usually mandated from the top down.

60 to 70 percent of OKRs should come from the bottom up.

An individual’s OKRs should benefit his or her team, the team’s objectives should benefit the
department, and department objectives should support big-picture company OKRs.

OKR Should
An OKR should be ambitious

OKRs should be public

be/Not OKRs must be quantifiable

should be Check-ins are important

Grading OKRs

Don’t initiate too many OKRs at once

OKRs are not synonymous with performance evaluation.

Grading OKR

Each Key Result can be measured on a score of 0-100% or 0 to 1.0

Each individual key result is graded and then, using a rough average,
correspondingly the objective is graded.

An objective is considered done when 70-75% of its results have been

achieved. If 100% of objectives results get done, it may not be ambitious
enough.
OKR example
Example of
OKR