OKR (Objective Key Results)
In this article, I would like to talk about OKR, “Objective Key Results”, which I met thanks to my Agile Coach Nazgul Ece Kelami Solmaz and combined with Agile Methodology. The main starting point is the goal setting tool, which combines the goals of the company with the goals of all employees and creates a clear focus in the long run.
So, where did OKR come from?
In 1968 Andy Grove created OKR by combining KPIs and MBOs (Management By Objective). Over time, it became a major method within Intel, but its biggest leap forward was brought to Google by Kleiner Perkins in 1999, through a former Intel employee and John Doerr, who popularized the OKR tool, and is now used by many companies, primarily in Silicon Valley.
Let’s give OKR steps both as a definition and as an example. Let’s say we have a small shipping company. Now, we can serve in a single city. Let’s look at the OKR steps over this.
Step 1: Transparency of the Vision of the Company/Teams
Vision is the main future goal of any business.
For instance, the Google vision; “to organize all the information in the world and to ensure that the information is accessible and usable from anywhere”.
Our company’s vision is to serve our cargo company into a fast and reliable cargo company serving all over the world.
Step 2: Setting goals
This is the most crucial part of OKR because it is important to set goals to achieve the vision.
Here we question the concept “WHAT” by asking organization/team prior to setting goals. It is vital the answers of such questions are in line with concrete, motivating, inspiring, simple and understandable.
The targets of our cargo company are;
1. To start distribution to 12 different cities at the end of one calendar year.
2. The maximum cargo delivery date will be no longer than 2-4 days.
3. In order to increase reliability, photos are taken and sent to both the seller and the buyer while receiving and delivering the cargo.
Step 3: Determine Key Results
In order to determine the key results, we ask our targets the concept of “How”. The responses should be measurable, ambitious, and realistic.
It increases the likelihood that the goal will come true.
In short, if the key results are reached, the goal is achieved.
OKRs can be within 3 months, 6 months and 1 year time framework. Key results are important in checking whether the goals are achieved by the organization and the teams in the specified time.
How to write our effective Key Results?
It should be SMART.
Specific: Contain well-defined central objectives
Measurable: Have a quantifiable element to serve as an indicator of success
Aggressive but Achievable: Possible to accomplish, attainable
Relevant: Make sense within your job function
Time-bound: Have an established deadline for each goal
Let’s get our key results by asking the question “how” we reach our goals. Let’s say we do 6-month OKRs with our shipping company.
1. Distribution should be in at least 1 different city every month.
2. At least 50% of the cargos must be delivered witin 2-4 days.
3. We aim to capture 40% of the delivery photos.
Another question is how does OKR benefit us?
• Agility
• Alignment and cross-functional cooperation
• Reduced time for setting goals
• Clear communication
• Employee engagement
• Autonomy and accountability
• Focus and discipline
I hope you find it useful. See you soon.
Thank you 😊