Updated: Jun 16
No doubt you've been hearing the buzz about a goal-setting methodology called Objectives and Key Results (OKRs). Although this may sound like a brand new thing, they've actually been around since the 1960's!
Here's a brief history of OKRs:
What are OKRs?
For those new to it, Objectives and Key Results (OKRs) are a management framework which helps to ensure that the company focuses efforts on the same important issues throughout the organisation by taking a quarterly valuable slice out of our strategy. OKR adherents include Google, Dropbox, LinkedIn, Oracle, Slack, Spotify, and Twitter.
An OKR is broken into the following 2 elements
Objective - A simple and inspiring statement of what we need to achieve to create a valuable business outcome. What’s important to note, is that the outcome is not what’a created or delivered, it’s the value that is derived by way of a happier customer or a better business.
Key Results - 2-5 measures indicating how we know we’re making progress on delivering the Objective. We know we’re making valuable progress as they are results based, rather than activity based.
How do they create value?
The pace of change is an ever-increasing reality of business. With continuous changes in customer needs and shifts in the regulatory environment mean it's more important than ever to adapt to these challenges in an aligned and focused manner.
John Doerr, an American investor and venture capitalist who’s seen the power of OKRs at a wide range of companies, does an incredible job of explaining the benefits of OKRs in his TED Talk - Why the secret of success is setting the right goals.
How are they structured?
It’s actually incredibly simple, an OKR consists of an Objective which is measured by 2-5 Key Results which are generally set and achieved within a quarter. Here’s an example:
Objective: Have our customers fall back in love with our offering
40% of users come back 2X in one week
50% increase in customer referrals when prompted
20% increase in retention
50% increase in customer satisfaction
In short, OKRs can be framed as I will achieve this (objective) as measured by (this set of key results).
Most important of all, Key Results are measurable and verifiable, therefore we aspire for them to be a metric we’re moving the needle on, rather than an activity or plan. Where we are today, this may not always be possible, but it’s where we need to be.
How do I get started?
The best place to start may not be so obvious. A lot of people start by introducing OKRs to their team. This usually involves education and influence - and if you're up for the challenge, go for it!
If you'd like to start a little slower, why not try experimenting with OKRs yourself? It could be your personal goals for the quarter or could be as simple for capturing goals for an upcoming birthday party.
Where can I find out more?
At SKILLFIRE we have harnessed OKRs since our early inception to help create radical outcomes for our customers and people. We've learnt a lot initially embedding OKRs within our business, and since this time helping countless clients apply the framework themselves.
We've built up a vibrant OKR community throughout Australia, and we're always keen to chat, so contact us at any time!