On OKRs

OKR(Objectives and Key Results) is a concept which originated in 1950s through Management by Objectives of Peter Drucker which was then adopted by John Doerr of Intel in 1974 and later popularized by Google. OKR can be treated as a part of the overall OGSM(Objective, Goal, Strategy, Measure) - Objective is the company's vision statement, Goal is the OKR, Strategy is the set of Strategic Pillars and Measure is the KPIs

OKRs consists of three components - Objectives, Key Results and Initiatives.

Objectives are what you want to achieve. Key Results are the outcomes you expect should be satisfied. Initiatives are the steps you take to achieve these Key Results. Unlike a goal which has only the target to achieve and not the objective, an OKR has both.

An Objective

• Is aligned to the company objectives and supports the organization’s ultimate goal

• Has a disproportionately positive high impact on the entire organization if achieved

• Is time bound and has a short time frame

A Key Result

• Is so important that even if 50-60% of the target is achieved, the whole organization will notice

• Is tough to achieve and challenging

• Is specific and has a clearly defined scope

• Is measurable, not easily controllable but can be influenced to lead the organization in it’s direction

An Initiative

• Is specific with defined scope and the owner has a clarity of what to achieve

• It is within control and the owner can be held accountable for not achieving the goal

There are multiple levels of OKRs - for the company, for the unit, for the group etc.

A few examples include

A look at any project management stack (like the one below which I found on Medium - I will link the source to it as and when I locate it) which is aligned with OKRs will tell you that these Key Results span different levels of the stack and achieving them will automatically mean that the Objective is achieved.

A few basic rules to follow.

1. An Objective is precise, concise and inspiring

2. As Objective is not measurable, the Key Results should be measurable

3. A Key Result is an Outcome, not an Output

4. A Key Result has a Title, Metric, Start Value and End Value

5. Have a weekly review on the progress

6. Have a retrospective once an OKR is closed

7. Maintain an organization level OKR template

8. OKRs should follow the SMART Goal template - Specific, Measurable, Achievable, Relevant and Time-bound

There are some common issues with OKRs, though.

1. There are no standards

2. They are rigid

3. They are not clear enough

How do you mitigate them?

1. Have weekly reviews to understand

   1. Progress: where are you today?

   2. Expectation: is this where you’re supposed to be?

   3. Trends: are you getting better or worse?

   4. Challenges: what’s getting in the way?

   5. Plan: how are you going to move forward?

2. Focus on outcome and not output

3. Have the OKR flow team based and not role based: Have OKRs for Product Team and Marketing Team and not for CFO and CTO.

4. Don't have more than 3 Objectives and 4 Key Results in a quarterly plan

5. OKRs are for teams and not for individuals

6. Have aligned OKRs and not cascading OKRs

7. If there are more than one yellow in an OKR set, treat it as red

8. Have a checkin reminder if need be

9. Don't combine OKRs and BAU

10. No person owns more than 5 OKRs

Note: In case of a cascading OKR, Key Result of the Previous level becomes the Objective of the subsequent level. If the key result at the bottom of a stack fails, everything fails. Also, any change in a low level key result means overhaul of the whole OKR structure. Consequently, though clear, this structure is a bit unwieldy and due care needs to be taken when trying to chart OKRs into a cascading flow.

References
The Objectives and Key Results (OKR) crash course - Perdoo
OKR - The Ultimate Guide to Objectives & Key Results (perdoo.com)
The OKR examples guide - for Companies and Teams (perdoo.com)
Cascading OKRs is costly, and you should avoid it
What are OKRs? The complete 2022 guide to OKRs