This blogpost is focused on one very important part of any business: Align the goals of the company with each team and the personal objectives. One of the techniques to address this challenge in an elegant and productive way is known as OKRs (Objectives and Key Results). OKRs have been used before in large companies such as Oracle or Intel, but they are probably better known because Google has adopt them as a core part of the organisation.
Different levels of the company focus on different parts of the business, but there is always some type of connection between them. For instance, A CEO might not be interested on the fact that the test coverage of the code base is just 30%. However, he will definitely care that there was a 10% decrease in sales in the last quarter because of all the days the system was “down for maintenance”. Although this is a quite clear example, there are other cases where this connection is not as clear.
The first step for the OKR process is to set the objectives and key results from the top level of the organisation. After this, this objectives will cascade down the organisation to the departments, team, … until the personal goals of every individual. One of the main differences with OKR compare to traditional business is that when the personal OKRs are discussed, they are agreed by the person and their direct “manager”; who will also negotiate the goals of the team with the person in the next level of the company, and so on, until the CEO level. This means that the communication is bidirectional, and that the objectives are not imposed, but negotiated. One of the other critical characteristics of OKRs is that they must not be used for performance reviews. Lets define how the objectives and results must be (according to Google):
- Objectives are ambitious, and should feel somewhat uncomfortable
- Key Results are measurable; they should be easy to grade with a number (at Google they use a 0 – 1.0 scale to grade each key result at the end of a quarter)
- OKRs are public; everyone in the company should be able to see what everyone else is working on (and how they did in the past)
- The “sweet spot” for an OKR grade is .6 – .7; if someone consistently gets 1.0, their OKRs aren’t ambitious enough. Low grades shouldn’t be punished; see them as data to help refine the next quarter’s OKRs.
I do not completely agree with the degree of completeness of OKRs that Google considers a “sweet spot” (I think that success of 70-80% could be better). However, I do think that they are absolutely right on the other factors: Ambitious objectives, measurable results and a public and transparent process where everyone in the organisation has access to all the OKRs.
Some of the main benefits of OKR are:
1. The understanding of a common goal for everyone in the company.
2. The transparency to see what other people of parts of the business are focused on.
3. The possibility that personal goals will change company goals. For example, gmail was started as a OKR because one of Google engineers was not happy with the capabilities of mail clients at the time… Yes, you have heard it well. Gmail was born because someone suggest to do so in a 1 on 1 meeting during an OKR session (this is the source for this information).
Multiple companies have been using OKRs successfully (i.e., Oracle, Intel, Google, …) and it is clearly a powerful tool. Nonetheless, I strongly believe that it has to be shaped slightly different in each organisation where it is applied. For instance, this blogpost describes how Swipely is using OKRs in their own way. I believe that, in addition to the benefits described before, they are a fantastic way to encourage multi-team collaboration, especially related to common personal goals within the team and potential ideas that require multiple skill-sets.
I know that this blogpost has not even scratched the surface of what OKRs are and how they should be used but I hope that it is enough to spark your curiosity. If you want to discover more about the specific details of OKRs and the different steps to implement them in an organisation, I suggest you to watch How Google sets goals: OKRs.