OKRs, Objectives and Key Results, are a simple tool that helps an organization achieve goals by building specific and measurable actions as well as communicating and monitoring progress toward them.
Objectives define where you want to go. They are short and inspirational. Companies typically create three to five high-level objectives per quarter. Objectives should also be ambitious. While choosing the right objective is one of the most challenging aspects of this practice, when you do it correctly you’ll be able to tell if you have reached the objective.
Increase profit by 15%
Key Results are the deliverables that you define for each objective so that you can measure your progress toward achieving that goal. Each objective should have two to five key results. And all key results need to be measurable.
Example key results:
Reduce production costs by 5%.
Implement new shipping software by August 2020.
The concept of OKRs was first developed by Andy Grove in the 1970s when he was president of Intel. The idea became popular when John Doerr, who also worked with Andy Grove at Intel and later became a venture capitalist and early investor in Google, introduced the concept to Google in the 1990s, which made it into a popular approach for the tech companies in Silicon Valley and beyond. Today, companies and not-for-profit organisations across all sectors are using the tool.
John Doerr’s formula for OKRs is:
I will (Objective) as measured by (set of Key Results).
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