A Practical OKR Primer
Summary
TLDRBrett Knowles from PM Square Consulting provides an overview of Objectives and Key Results (OKRs). OKRs have evolved from management science and gained popularity in companies like Google and Intel. They help align employee actions with company strategy through clear, measurable goals. The process involves cascading mission and vision into annual goals, quarterly objectives, and key results. Best practices include setting challenging, time-bound objectives, maintaining a limited number of goals, and fostering a measurement culture to ensure all efforts are aligned and focused. OKRs enhance strategic communication and employee engagement, leading to improved performance.
Takeaways
- 📚 OKRs (Objectives and Key Results) have a long history in management science, dating back to 1953 with Peter Drucker's work.
- 🌐 The concept of OKRs has evolved and been influenced by various management strategies such as SMART indicators, KPIs, and the Balanced Scorecard.
- 🚀 OKRs gained significant traction in the early 2010s, notably being adopted by companies like Google.
- 📉 OKRs are part of a cascading framework starting from mission and vision down to strategic goals, objectives, key results, and finally, tasks and tactics.
- 🔑 The mission and vision provide a long-term view, while annual goals and quarterly objectives offer a more immediate focus.
- 🤔 Many employees struggle to understand their company's strategy, leading to a lack of engagement and low satisfaction levels.
- 🎯 OKRs aim to provide clear, time-bound, and actionable objectives supported by measurable goals, improving clarity and engagement.
- 🏆 Companies like Oracle, LinkedIn, Google, Sears, and Intel have achieved success using OKRs, highlighting their effectiveness.
- 📝 Good OKRs should be specific, measurable, and time-based, with a focus on both quantitative and qualitative improvements.
- 🛠 OKRs are not strict rules but flexible guidelines that should be adapted to fit the organization's needs.
- 📉 OKRs can fail if they become too burdensome, so it's recommended to limit the number of objectives and key results per quarter.
- 🔄 The annual and quarterly setting of OKRs aligns with evaluation timeframes used by boards and external stakeholders.
Q & A
What is the purpose of the video by Brett Knowles from PM Square Consulting?
-The video provides an overview of Objectives and Key Results (OKRs), explaining their history, how they fit into organizational strategy, and their benefits.
Who is credited with the initial concept that led to the development of OKRs?
-Peter Drucker is credited with the initial concept in 1953, which later evolved into the OKR framework.
Why did organizations like Google start using OKRs?
-Google started using OKRs in the early 2011 to 2013 period because they found them effective in aligning their workforce with the company's strategic goals.
What is the typical timeframe for setting OKRs?
-OKRs are typically set on an annual basis and then cascaded down to quarterly objectives and key results.
How does the OKR framework help in aligning an organization's strategy with its day-to-day activities?
-The OKR framework helps by cascading the mission and vision down to strategic goals, then to quarterly objectives, key results, and finally to daily and weekly activities.
What is the significance of having a quarterly time horizon for OKRs?
-A quarterly time horizon is significant because it allows organizations to set and achieve measurable goals within a short enough period to maintain focus and momentum.
Why is it important for employees to understand the company's overall strategy?
-It's important for employees to understand the company's strategy so they can work towards it, feel engaged, and contribute effectively to the organization's goals.
What are some best practices for setting effective OKRs?
-Best practices include setting time-bound, actionable objectives supported by measurable key results, and ensuring that objectives are challenging yet achievable.
How many objectives and key results should a team or organization ideally have per quarter according to the video?
-A team or organization should ideally have no more than five objectives, with each objective having four or fewer key result areas per quarter.
What are some examples of key results that can be used to measure progress towards an objective?
-Examples include specific numerical goals for increasing revenue, employee engagement scores from surveys, or milestones such as implementing a user testing process.
What are the benefits of implementing an OKR system according to the video?
-The benefits include disciplined thinking about strategic objectives, improved communication about organizational priorities, establishment of a measurement culture, and underpinning an employee engagement process critical for executing strategy.
Outlines
📈 Introduction to Objectives and Key Results
In this introductory paragraph, Brett Knowles from PM Square Consulting explains that the video provides an overview of objectives and key results (OKRs). He mentions that OKR knowledge is crowd-sourced from various practitioners and highlights the historical context of OKRs, starting with Peter Drucker's work in 1953. The evolution of management concepts such as SMART indicators, KPIs, and balanced scorecards is briefly discussed, leading to the emergence of OKRs in the 1990s and their adoption by companies like Google in the early 2010s.
🗂️ Structure and Importance of OKRs
This paragraph outlines the cascading structure of organizational goals from mission and vision down to daily tasks. It emphasizes the importance of quarterly objectives and key result areas, which align short-term actions with long-term strategies. The breakdown includes annual goals derived from the mission and vision, quarterly objectives, and the activities and processes that support these goals. The paragraph also stresses the importance of employees understanding the company's strategy to improve engagement and performance.
🎯 Benefits and Best Practices of OKRs
The benefits of implementing an OKR system are detailed in this paragraph. OKRs help organizations define and communicate strategic priorities, fostering a measurement culture and improving employee engagement. The author mentions best practices, such as setting time-based goals and ensuring they are challenging but achievable. Companies like Oracle, LinkedIn, Google, Sears, and Intel are cited as examples of successful OKR users. The importance of having a limited number of objectives and key results to avoid overcomplication is also highlighted.
📅 Implementing and Managing OKRs
This paragraph describes the annual and quarterly process of setting and managing OKRs. The need for objectives to be challenging yet defined is emphasized, with a focus on quantifiable results. The cyclical nature of the OKR process is likened to playing a game, with quarterly reviews and adjustments ensuring continuous alignment with organizational strategy. The process allows for four learning cycles per year, promoting ongoing strategic refinement and alignment with current performance and future expectations.
Mindmap
Keywords
💡OKRs
💡Objectives
💡Key Results
💡Peter Drucker
💡Balanced Scorecard
💡Mission and Vision
💡Employee Engagement
💡SMART Indicators
💡Cascading Goals
💡Measurement Culture
Highlights
Objectives and Key Results (OKRs) have a long history in management science, dating back to 1953 with Peter Drucker's work.
OKRs have evolved alongside other management concepts such as SMART indicators, KPIs, and the Balanced Scorecard.
Google and other organizations began using OKRs in the early 2010s, which increased their popularity.
OKRs help in cascading strategy from mission and vision to strategic goals, objectives, key results, and tasks.
The mission and vision provide a long-term view, while annual goals and quarterly objectives offer a more immediate focus.
OKRs are designed to be time-bound and actionable, supported by measurable goals and key results.
Few employees understand their company's overall strategy, which affects engagement and productivity.
OKRs provide clarity and help employees understand their purpose and how to achieve mastery at work.
Best practices for OKRs include setting them annually and quarterly, aligning with board and stakeholder evaluations.
OKRs should not exceed five objectives with four or fewer key results each to avoid overwhelming teams.
Challenging objectives motivate people to work harder towards achieving them.
Key results should be clearly defined, quantifiable, and agreed upon by all stakeholders.
OKRs benefit organizations by disciplining strategic thinking, improving communication, and fostering a measurement culture.
OKRs underpin employee engagement, which is critical for executing strategy.
An annual OKR process involves setting plans, drafting objectives, living through the quarter, and resetting for the next.
This process creates four learning cycles within a year, allowing for strategy refreshment and adaptation to performance.
OKRs are gaining traction in various organizations, including Oracle, LinkedIn, Sears, Intel, and more.
Transcripts
hello I'm Brett Knowles from PM square
consulting this short video is an
overview of objectives and key results
it's important to note there is no one
core source of ok our knowledge it's
being crowd formed by a number of
practitioners around the world and all
I've done is harvested some of the
powerful visuals that they have put
together and created my own voiceover to
give you a practical view of what they
are so let's talk about ok ours for a
second they have a long history in
management science way back in 1953
Peter Drucker wrote a book about or a
paper about um MBAs which became the
effective executive book in 67 and since
then there's been an emergence of other
related concepts the idea of smart
indicators the idea of KPIs the huge
body of work around balanced scorecard
leading lagging measures financial
non-financial and so forth and ok ours
began to emerge in 1990 although they've
been growing steadily since then in the
early 2011 to 2013 period organizations
like Google started using them and they
receive received more and more popular
press so what are they well we all know
our strategy gets cascaded down from you
know mission vision down to strategic
goals down to objectives down to tasks
and tactics and that drill down looks a
bit like this we start off with our
mission and vision and from that we
should be able to create annual goals
and those goals themselves get cascaded
down to quarterly objectives and those
in turn get cascaded down to key result
areas and then finally the activities we
do the processes and projects inside the
organization so the mission vision that
sort of a long-term view 25 years out
annual is focused on this year's goals
but those two cheechee goals probably
last up to five years but their priority
shifts over time these quarterly
activities obviously describe what we're
doing this quarter to move
head and then the tactics and tasks our
daily weekly activities so that's the
breakdown and of course objectives and
key results fit in this timeframe of a
quarterly time horizon so it's important
to note these are concepts that we've
all been using in our organizations
we're just getting better definition and
guidelines about how to use them why
well it turns out that very few
employees understand the company's
overall strategy and of course they
don't understand the strategy they can't
work towards it then it doesn't get
cascaded down or communicated by our
manager very clearly and therefore we're
not engaged we don't understand what our
purpose is at work or how do we achieve
mastery and therefore there is a low
satisfaction level in the organization
and that of course is our productivity
and performance train on the company so
objectives and key results come in as a
way to give us clear time-bound
actionable things we can work on
supported by measurable goals and and
key our eyes these are gaining traction
all over the place and the most popular
press talks about how oracle LinkedIn
Google Sears Intel and so on have been
using these to achieve their great
success there are a number of best
practices out there these aren't rules
they're just guidelines and it's all
about being time-based and understanding
that these aren't intended that you
achieve a hundred percent of the success
examples of good okrs let's talk about
increasing our revenue as an objective
and the key results are you know
specific numerical goals that we should
be able to move towards or creating
employee engagement something that we
normally think is not quantifiable but
maybe do employee surveys to get hard
numbers we have specific activities we
can make sure our curring and we've got
specific milestones or implementing a
user testing process again broken down
to what can we
do this quarter so what are the benefits
of a no care system well first off they
discipline our thinking about our
strategic objectives our priorities and
how they cascade down to what we need to
get done this quarter and this week
towards success and therefore it allows
us to communicate accurately about what
is important to the organization so that
we can all relate to it and it begins to
establish a measurement culture that
allows us to describe how we're doing in
ways that we can talk to each other
about and therefore focuses our effort
so that we're all pulling in the same
direction and then finally it underpins
an employee engagement process which is
critical to getting a strategy executed
now again these aren't rules but
guidelines first we need to set these
goals annually and quarterly why well
quarter and yearly timeframes are things
in which we can actually see something
getting achieved and more importantly
these are also the timeframes used by
boards and external stakeholders to
evaluate your organization now okrs can
fail for the same reason as any other
system but in addition they crumble
under their own weight we add too many
in so any team or organization should
have no more than five objectives and
each one should have four or fewer key
result areas per quarter now we need to
make these objectives challenging
because research and experience proves
if we make them challenging people work
harder towards achieving them and then
finally we need to make sure that the
key result is defined it may be
quantitative but it needs to be defined
so that we can all see and agree on that
particular performance so if we go back
to that time horizon of executing our
mission and vision down to tax and
tasked tactics what it means is we end
up with an annual process that looks
like this we're going to set our planned
summer to how we currently do and then
we're
going to draft our actual objectives for
that quarter and live through that
quarter we typically describe that as
almost like a game then based on that we
reset what our draft objectives and key
results will be for the following
quarter and then play the second game
and so forth
so now we end up with basically four
learning cycles in the same period of
time that most organizations have won
this allows us to not only refresh our
strategy on an ongoing basis but make
sure our objectives and key results are
current with our historic performance
and what we can expect on this coming
quarter I hope this has been useful to
you as an overview of what objectives
and key results are
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