Andy Grove, helped Intel become among the most valuable companies by 1997. In his years at Intel, he conceived a management and goal-setting system, called OKR, standing for “objectives and key results.” Venture capitalist and early investor in Google, John Doerr, systematized in the book “Measure What Matters.”
A glance at the OKR system
Back in the 1970s, Intel was among the most respected and admired companies in Silicon Valley. During that time Intel’s CEO, Andy Grove, was the man who managed to drive organizational change.
Andy Grove did that via a goal-setting process called OKRs or objectives and key results. Where the objective is the direction, toward which the organization needs to be in the medium term.
And the key results are milestones, things that allow the company to get there. Those key results need to be easily trackable, understandable and shared across the company.
In its purest form OKRs consists primarily of four superpowers:
Focus and commit to priorities
This superpower focuses on making clear what matters and what doesn’t. More precisely it allows whole teams and departments to decide where the focus is and dispel any confusion
Align and connect for teamwork
One essential ingredient of the OKRs is its transparency and the fact that it needs to be openly shared across the organization, from the CEO down to each team and member of the organization. OKRs is not a siloed process but rather a transparent goal-setting tool
Track for accountability
OKRs are data-driven. It doesn’t stress though on a countless number of metrics that help to increase the level of noise. OKRs instead focuses on a few critical metrics to measure the impact on the business
Stretch for amazing
Objectives set in OKRs aren’t conservative, those are aggressive, hard yet possible and attainable. From this balance, OKRs brings the organization forward
Those superpowers are kept together by continuous improvement and corporate culture.
How is OKRs different from MBOs?
For those that know Management by Objectives or MBO, it might be easy to confuse it with OKRs. However, there are a few key differences. At its core, the MBOs focused on what while it was primarily top-down and risk-averse.
By converse, OKRs focuses on the “what” (direction) and “how” (key results). Rather than an annual review process which might make it too complicated and formal OKRs follow a quarterly or monthly schedule which is public and transparent and usually bottom-up.
Where MBOs goals are risk-averse, OKRs goals are aggressive and aspirational.
OKRs objectives have a few key elements such as:
- Actionable by the team
While OKRs key results are primarily:
- Measurable and quantifiable
- Make the objective achievable
- Lead to objective grading
- Difficult but not impossible
Resources for your business:
- What Is a Business Model? 30 Successful Types of Business Models You Need to Know
- The Complete Guide To Business Development
- Business Strategy: Definition, Examples, And Case Studies
- What Is a Business Model Canvas? Business Model Canvas Explained
- Blitzscaling Business Model Innovation Canvas In A Nutshell
- What Is a Value Proposition? Value Proposition Canvas Explained
- What Is a Lean Startup Canvas? Lean Startup Canvas Explained
- What Is Market Segmentation? the Ultimate Guide to Market Segmentation
- Marketing Strategy: Definition, Types, And Examples
- Marketing vs. Sales: How to Use Sales Processes to Grow Your Business
- How To Write A Mission Statement
- What is Growth Hacking?
- Growth Hacking Canvas: A Glance At The Tools To Generate Growth Ideas
Handpicked popular case studies from the site:
- The Power of Google Business Model in a Nutshell
- How Does Google Make Money? It’s Not Just Advertising!
- How Does DuckDuckGo Make Money? DuckDuckGo Business Model Explained
- How Amazon Makes Money: Amazon Business Model in a Nutshell
- How Does Netflix Make Money? Netflix Business Model Explained
- How Does Spotify Make Money? Spotify Business Model In A Nutshell
- The Trillion Dollar Company: Apple Business Model In A Nutshell
- DuckDuckGo: The [Former] Solopreneur That Is Beating Google at Its Game