The Ins and Outs of OKRs

If you’ve ever heard someone talk about OKRs but weren’t sure what they meant, then you’re in luck. This blog post will explain exactly what the acronym means.

OKR stands for “objectives and key results.” They are time-bound objectives designed to enable greater efficiency, effectiveness, and accountability.

OKRs are a collaborative goal-setting system that is used by individuals, teams, and organizations to pinpoint measurable goals and track their progress and outcomes in relation to those goals.

Though it’s a simple system, it can be incredibly impactful in terms of helping individuals and teams align with one another to achieve their targets.

OKRs can be used in almost every setting. However, they are most commonly used in a professional or HR environment.

It is a term that is frequently used in the lexicon of high-level management, important conversations between HR executives, and during feedback meetings between individuals and their supervisors.

For this reason, it’s key that all HR specialists understand the unique function of the OKR framework, where the concept originated from, and how you can use it to accelerate your organization’s various fractions.

What Is an OKR and What Is Its Origin?

Before we dive into the benefits of OKRs when managing goal-setting strategies, let’s explain where the term OKR came from in the first place. To give you a better insight into the history of OKRs, there are three names you should probably know about.

Peter Drucker

Peter Drucker was a renowned Austrian-born American management consultant, educator, and author who revolutionized the world of business with his thought leadership. His theories provided innovative solutions to help organizations become more efficient and successful which led him to be known as "the father of modern management".

His 1954 book, The Practice of Management, brought the idea of management by objectives (MBO) to the fore. It was a method that involved management and employees collaborating to outline goals that could be worked towards.

Andy Grove

The concept of OKR was popularised by Andy Grove, a successful businessman, and engineer, during his tenure as the CEO of the globally renowned tech powerhouse, Intel. Grove was inspired by Peter Drucker’s teachings and went further with the concept of MBO. In 1975, Grove taught a course at Intel, and in it, he shared his idea for a system of goal setting and accountability which he coined as iMBOs.

John Doerr

One of the attendees of this course was John Doerr, a future guru of Kleiner Perkins and Google. Doerr was encapsulated by the deceivingly simple yet effective nature of Grove’s new goal-setting methodology.

Unlike the popular systems at the time, Andy Grove’s system focused on outcomes and not procedure. This was the total anthesis of the mainstream methodologies and to Doerr, it was entirely unconventional and 100% genius.

Doerr was so taken by Grove’s OKRs that he introduced the framework into his own personal working culture and later shared it with people at Google, where it quickly became central to the company culture and was renamed OKRs. OKRs are now the bread and butter at Google and other corporate powerhouses like Amazon and LinkedIn.

In fact, the co-founder of Google Larry Page even credited part of the internet phenomenon's global growth and success to Doerr's system of OKRs.

Since then, the OKR system has gone from strength to strength. It didn’t just find favor with the biggest and brightest occupants of Silicon Valley such as the management of Twitter, Uber, Microsoft, and Gitlab, but it entered the offices and strategies of organizations of all sizes worldwide. Grove’s seemingly simple technology has become revolutionary and the acronym OKR is a commonly heard and utilized phrase in finance, HR, and marketing.

Unlike conventional management objectives, OKRs hand the power and agency over to the individual and team. It is not top-down, hierarchical, or linked to compensation. Instead, it revolves around the goals of a single individual or team and operates on the principle of achieving aims and tracking progress. It encourages people to develop initiative in achieving their goals instead of focusing solely on day-to-day tasks and refraining from strategizing on how their every day is shaping their future.

In this way, OKRs can pillar a motivated team’s progression to success and prevent stagnancy. The framework enables people to connect their annual or quarterly objectives to their everyday tasks and ensure that they are contributing to their progression and not just getting lost in the monotony of modern-day working culture. Setting clear objectives and key results gives individuals and organizations structure and prioritizes the activities that truly drive progress.

Comparing OKRs and KPIs

There are tons of acronyms in the HR lexicon and sometimes it can be easy to forget the meaning behind each one and begin to interchange them. For example, many people frequently struggle to distinguish between OKRs and KPIs. It’s not uncommon for people to feel confused as to which metric they should be implementing at different stages of their goal strategy system.

So, before we explain the specific benefits of OKRs, let’s clear up any metric confusion by outlining the differences, similarities, and correct uses of these three metrics.

• KPI stands for key performance indicators and is the quantifiable way that teams or individuals can measure their initiatives against results. If you decide to connect your KPI to your company objective, which we advise by the way, then you can actually use your KPIs to support your company objectives contained in your KRs and OKRs.

Though OKRs and KPIs are often used in the same environments and at team level, they support entirely different mentalities.

As explained above, OKRs are a holistic framework by which individuals or teams can track and achieve their business goals. In this way, OKRs differ from KPIs because they don’t refer to a metric in a specific project or task, but rather an entire system that is managed by objectives.

Put simply, OKRs focus on empowering a strategy toward bigger company objectives while KPIs pinpoint selected indicators of a team’s performance.

OKR Methodology

The OKR framework is incredibly flexible and can be used in a huge variety of settings. However, this malleable nature of the OKR process means that it is often difficult to concretely conceptualize or implement into your working structure.

To help you understand the structure and correct usage of OKRs, let’s explain what comprises an OKR and run through how you can use them personally or in a business setting.

So, as implied by the name, an OKR has two components.

• First up, there’s the objective. This refers to your measurable goals and details what you want to achieve. It’s important to note that you should be able to track progress. An optimal objective is short, snappy, and motivational.
• Next in line, we’ve got the key results. This part refers to a set of metrics that you can use to measure your progress toward your chosen objective. They enable you to track your progress toward your end goal. All key results must be quantifiable and measurable. Our advice? Keep your chosen number of key results below five so that they’re memorable and consistently present in your mind.
• People often refer to the OKR cycle. But what does it mean? Well, the OKR system should be repeated over time. By that we mean, a company or individual should aim to set, align, and achieve different objectives or smart goals on a regular basis. At flair, we operate on a quarterly basis with the team making time to check in on progress during each month.

Characteristics of OKRs

Ambitious: Aim high. Setting high goals and expectations through OKRs should challenge your team to strive for great success. Make sure you are setting challenging objectives that will help push progress or development forward. In the world of OKRs there are also moonshots or stretch goals. This is when the goals seem almost too aspirational and impossible. However, they are designed to challenge and test the limits of what can be achieved.

Inspiring: They should be interesting. Establishing objectives and key results should be an energizing exercise that encourages goal-oriented action in the workplace. Setting inspirational targets, with clear expectations of what success looks like, helps to create a cohesive team atmosphere and gives individuals the opportunity to shine.

Clear: Your goals should be easy to understand. In a company environment, it is imperative that your employees or team members are on the same page in terms of the time frame and results.

Measurable: In order to determine success, it is important to measure progress. Don’t forget to implement check-ins into your goal-setting framework. OKR check-ins are essential for employee engagement and the success of your goal-setting framework. By regularly assessing objectives and strategies, you can make sure that everyone is on the path to reaching agreed milestones.

To help you understand what an effective OKR framework looks like in action, here are some OKR examples.

Example One

Objective: Enhance customer satisfaction

Key results

• Improve TripAdvisor review from 3.2 to 5.2
• Improve Google rating to 78%
• Increase sales by 5%#

Example Two

Objective: Drive employee satisfaction

Key results

• Increase employee satisfaction in the annual survey by 15%
• Host 3 additional open discussion feedback sessions in the next quarter
• Achieve 82% employee participation in an engagement survey

Example Three

Objective: Increase social media presence

Key results

• Increase Instagram followers to 200,000
• Drive TikTok views up by 2,000
• Onboard 12 more micro-influencers

If you’re still struggling to structure your goals and key results into OKR, try inputting them into this template below to make it easier:

I will (Objective) as measured by (key results).

Who Uses OKRs?

OKRs are used in companies, personal journals, and businesses around the world. So much so, that there is an entire segment of the tech industry devoted to developing OKR software.

These OKR tools have been designed to streamline even the most ambitious of OKR frameworks. With OKR tools, organizations have proven they can successfully drive team members forward and reach new heights.

What Are The Benefits Of OKRs?

The flexible, easy-to-understand, and easy-to-measure OKR framework makes it one of the most successful and widely-used goal-setting methodologies on the planet. When a framework of good OKRs is implemented, there are countless benefits to this performance management tool.

When outlining the management framework, the father of OKR, John Doeer uses the acronym F.A.C.T.S. to summarise its many associated benefits.

• Focus: OKRs give employees a sense of purpose. When hoping to improve the trajectory of your company or personal future, there is no understating how influential this sense can be. The framework helps them to stay motivated, encourage each other, and believe in their objectives.
• Alignment: OKRs provide a way for a whole organization to align its company goals at every level and, most importantly, for its employees to see the clear connection between their daily tasks, their own personal objectives, and the company’s larger-scale aims.
• Commitment: Without clearly defined objectives, it can be easy to forget your purpose or to get sidetracked with a new shiny project or professional endeavor, however, the straightforward nature of OKRs demands a collective commitment from all involved and unites them all in a clearly defined, long-term mission.
• Tracking: There’s no use in having a goal when you’re in the dark about how to achieve it or how close you are to reaching it. That’s why one of the key benefits of the OKR framework is the way in which it allows you to monitor your progression by clearly defined goals.
• Stretching: OKRs inspire teams to stretch their goals and exceed expectations. Without clearly defined goals and easily monitorable indicators, it might be easy for employees’ contributions to fade into the background and for their passion for their company to dwindle. However, a correctly implemented OKR framework prevents this from happening and promotes a motivated team to succeed.

Though deceptively simple, OKRs can be a powerful system. If used correctly they can inspire your organization or your own personal potential to greatness, establish a sense of accountability within yourself and your team, help to align your objectives, and overall, drive you and your team to success.

So if you’re looking for ways to accelerate your personal progression or take your organization to new heights, use this article to implement an effective OKR structure today. Good luck!

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