OKR - Goals and more
In project management, one often cannot escape abbreviations. We use many abbreviations in everyday life, sometimes without really knowing what they stand for, because they often come from foreign languages, preferably from English. OKR is just one of many abbreviations that have come to us from the USA. So what does OKR mean? It stands for Objectives and Key Results. So basically it means "objectives and the achievement of them". It is about setting goals but also about achieving them and how that in turn can be measured. OKR aims to standardize the process of goal setting and define the process of describing and measuring the achievement of goals. How do I set goals, how do I monitor them, how do I adjust them?
We already know KPIs, strategic measures and SMART goals. Why do we need OKR now? Well, if companies like Twitter, Google and Walmart are using OKR, then it's worth taking a closer look.
OKR - a definition
OKR is a framework that deals with goal setting, so it is a planning methodology and a strategy alignment tool. Normally OKR is applied throughout the organization, i.e. in all departments and teams. OKR can be used at any level, even for personal self-management. Basically, OKR is nothing really new. Proven concepts are combined into a framework and simplified to make the difficult process of goal setting and monitoring work better. As a rule, OKR is applied on a quarterly basis.
OKR - The Origin
OKR has its origins in Peter Drucker's "Management by Objectives". In 1970, John Doerr and Andy Grove developed the principle of OKR for Intel in the USA. Almost three decades later, Google, a brand new corporation in 1999, finally used the same concept and continues to do so today.
OKR - The structure
How did OKR help Google and other giants achieve such success? The answer to this question is that OKR not only helps to define goals, but also to measure to what extent these goals have been achieved. John Doerr has written a kind of formula for this. It reads: I will (Objective) as measured by (this set of Key Results). The key point here is "measured by". Only measurable goals are actually goals. A goal that is not measurable is just an idea or perhaps a wish. To the Objectives: So you describe what you want to achieve. Concisely and in a motivating way. Formulate your objectives like an exciting challenge. An example would be: Our company is the best-known manufacturer of sugar-free cereal bars. You formulate a state that you want to achieve. Then the Key Results: Here you have to define the key figures with which you want to measure the achievement of the respective goal. It makes sense to have a number of two to five key figures per goal. Back to our example: social media followers grow by 100%. Website traffic is growing by 50%. Earned Media Value is 50% higher than the nearest competitor. Always based on the premise: If there is no number included, it is not a Key Result.
OKR - And more
Initiatives are basically not part of OKR, but are also used in this context. Finally, it must be clear how the defined Key Results can be achieved. This is where you describe the actions you want to take to get to the goal. Back to our example: a social media agency is hired and influencer campaigns are launched.
OKR - The advantages
The advantages of OKR are many and are obvious. There is a clear focus on the most important topics. It quickly becomes clear whether the projects and campaigns are really suitable for achieving a specific goal. It is also easy to see whether the working time is being used correctly, i.e. whether it has been prioritized well. Only when priorities are set correctly can everyone pull in the same direction and resources are used exactly where they are ultimately needed. Many companies work with OKRs that are not determined from the top down. Teams define their own OKRs, usually to achieve higher-level OKRs. In this way, the personal commitment of each employee is encouraged. OKRs encourage clear communication because they are transparent and visible to all. Ideally, employees can focus on the extent to which they have helped to achieve the goals instead of stubbornly checking off work steps. The result counts. Many companies that work with OKR report that their employees are more motivated, even when the goals set are unattainable. Last but not least, the business impact must also be mentioned. Many companies follow the trend and achieve higher performance and increasing sales figures thanks to active and functioning OKR processes. OKR is in vogue and this is not by chance. Used correctly, OKR helps define success criteria and make them accessible to everyone in the company. A focus on the essentials and a motivated workforce ultimately show the desired success.
Author: IAPM internal
Key words: Project management, Methods, Goals, Measurement methods, Tools