OKRs — How to measure progress that matters?
Neu-Ulm University of Applied Sciences
December 1, 2024
After this session, you should have a solid understanding of
OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of “organizing the world’s information” perhaps even achievable. They’ve kepts me and the rest of the company on track when it mattered the most. Larry Page, cofounder and former CEO of Google
This unit is inspired by and mainly based on the book Measure What Matters by Doerr and Page (2018).
Measure What Matters will transform your approach to setting goals for yourself and your organization. Whether you are in a small start-up, or large global company, John Doerr pushes every leader to think deeply about creating a focused, purpose-driven business environment. Mellody Hobson, president of Ariel Investments
OKR = Objectives and Key Results
Has evolved from Intel (iMBO, 1970) to Google (OKR, 1999) to a widely used management tool
stretch
Objectives — idealistic, not realistic
+ quantification
Key Results — work metric driven; prevent shortcuts
+ progress
Check-ins — check progress and ambition level
Audacious objectives
= the stuff of inspiration and far horizons—the what
We choose to go to the moon in this decade and do the other things not because they are easy, but because they are hard. Because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we’re willing to accept. John F. Kennedy, 12.09.1962
Key results are benchmarks toward the objective—the how
Key results are more earthbound and metric driven, they cover things such as revenue, growth, active users, satisfaction scores, etc.
Objective: Win the Indy 500 (see Doerr and Page 2018)
Those results are specific and measurable.
Those results mix quantitative and qualitative results to ensure that the team does not cross corners to reach the result.
Are you making progress and are your key results are challenging enough?
The color coding system has transformed the one foundation board meetings. They’ve sharpened our strategy, our execution, our results. They made us a more effective weapon in the fight agains extreme poverty Bono, singer and founder of the one foundation
everyone, at every tier
+ start top-down
+ make OKRs visible
+ align bottom-up
Objectives & key results
Set the priorities and 3-5 objectives per tier, let employees create 3-5 key results per objective
Cycles, roles & tools
Usually two cycles: annual (long-term OKRs) and quarterly (short-term OKRs) + OKR shepherd + cloud-based management system
Walk the talk
Check in weekly or monthly, score & reflect, repeat cycle
How can OKR help create trust within organizations?
If we try to focus on everything, we focus on nothing. Andy Grove, former CEO of intel
Innovation is located less at the center of an organization than at its edges (Doerr and Page 2018).
Having goals improves performance. Spending hours cascading goals up and down the company, however, does not. Laszlo Bock, former HR executive at Google
OKRs are always measurable.
In God we trust; all others must bring data. W. Edwards Deming, American engineer, statistician, professor, and author
Balance committed OKRs and stretch OKRs.
The biggest risk of all is not taking one. Mellody Hobson, chairwoman of Starbucks, and former chairwoman of DreamWorks
OKRs foster CFRs—conversations, feedback & recognition
Talking can transform minds, which can transform behaviors, which can transform institutions. Sheryl Sandberg, former Co-CEO of Meta
Structure & clarity,
psychological safety,
meaning of work,
dependability &
impact of work
Goals may cause systematic problems in organizations due to narrowed focus, increased risk taking, unethical behavior, inhibited learning, decreased cooperation, and decreased intrinsic motivation. Use care when applying goals in your organization. Ordóñez et al. (2009, 14)
When setting goals, following questions should be asked beforehand (Ordóñez et al. 2009):
The following questions are designed to review and consolidate what you have learned and are a good starting point for preparing for the exam.
Former CEO of Intel, who has transformed Intel from a manufacturer of memory chips into the world’s dominant producer of microprocessors.
One either succeed in achieving a key result, or don’t
If a key result seems easy, it, or the objective, may not be ambitious enough
Data need to be available, credible, and easily discoverable
If anyone’s OKRs aren’t aligned with the top-line OKRs, it’s obvious.
For instance: Ally, Culture Amp, Asana, Weekdone or shared documents
People who choose their goals take more responsibility toward getting themselves there.
Are goals, roles, and execution plans on our team clear?
Can we take risks on this team without feeling insecure or embarrassed?
Are we working on something that is personally important for each of us?
Can we count on each other to do high-quality work on time?
Do we fundamentally believe that the work we’re doing matters?