Objectives and Key Results, or OKRs, have been around for a while now: decades in fact. Invented by Andy Grove in the 1970s and pioneered by John Doerr in the 2000s, some of the biggest multinational companies use them, from Google to Intel. And they’re not just a business tool - OKRs provide a framework for any ambitious situation where a challenging goal looms in the distance. If you wanted to, you could use OKRs as a way of improving just about anything.
But what exactly are Objectives and Key Results? Simply put, OKRs can be used to plan and achieve long-term goals. An objective is what you want to achieve - the direction you’re heading in. A key result is one of the milestones you’ll pass on the way to reach your objective: it’s how you’ll achieve your goal. The objective can be quite ambitious, whereas the key results should be more realistic.
Here are some examples of objectives:
- Expand my professional team
- Break into the UK market
- Cut down on carbon emissions
As you can see, objectives require dedication, time and effort over a long-period of time. And dreaming big like this is a good thing: passion (or the ‘why’, as Simon Sinek outlines in this great TED Talk) is key to any big project’s success.
But how do you get there from where you are now? You won’t just wake up one morning and find your ambitions have been realised. Progress, especially radical progress, is made up of daily acts of hard work and perseverance. The Wright brothers would never have invented the airplane if they had simply focused on dreaming about flying.
This is where key results come in. Key results break down your big audacious goals into smaller, slightly less audacious sections. So looking at the list above, if you wanted to break into the UK market you might set up these key results:
- Hire five sales reps in the UK
- Set up a partnership with one UK actor
- Interview three UK thought leaders
Importantly, key results must be measurable in some way. For example, if you wanted to become a master chef, a key result like “get better at cooking” isn’t very helpful. What defines ‘getting better’? When would you decide that you’d achieved such a vague outcome? A budding chef would be better off writing this: “take five cooking classes.” At any given moment you can look at that key result and say for sure whether it has or has not been achieved. Better still, if it involves numbers or percentages you can clearly see how near you are to attaining that particular result.
Taken together, objectives and key results are really rather simple. Perhaps that’s why they’re so effective. According to a Harvard Business study, the 3% of graduates from their MBA who wrote down their goals ended up earning ten times as much as the other 97% put together - only ten years after graduating. And research drawing on the use of OKRs amongst 20,000 people discovered that using even a basic OKR system had significant results, like an 8.5% increase in call centre sales and 11.5% increase in performance.
Maybe this isn’t so surprising when you consider the alarming fact two thirds of senior managers can't name their firm’s top priorities! In short, OKRs fill that gap between company vision and company employees, enabling teams to make bold steps in the right direction.