In 1999, John Doerr made a presentation about OKRs at a fledgling startup.
If you know your tech history well, you probably know where this is going. The startup in question was Google, and OKRs stands for Objectives and Key Results. Google’s use of OKR’s is legendary. OKRs are widely credited with helping Google really take off. In short, here is what Google did to harness all of the potential that OKRs promised.
Firstly, they made sure that everybody’s OKRs were public. The OKRs in question had to be ambitious and slightly out of reach. If the OKR did not make you sweat, then it probably wasn’t ambitious. These OKRs were then made to be measurable. They utilized a scale of 0 to 1.0 – where getting a score of 0.6 to 0.7 was acceptable and good even. And finally, bad grades weren’t punished. Instead, they were simply used to refine the next set of OKRs. The implementation of Objectives and Key Results changed the way things worked. Goals were more open, easily understood and measurable. This use of OKRs set off a precedent and as a result, they are used even today at Google. Oh and additionally, today Google is a multinational tech giant.
While OKRs were not the sole reason for Google’s success, there must be some value to them if Google continues to utilize them even today, despite having an employee base that numbers in the thousands.
So what exactly are the benefits of OKRs? But before we begin, it is important to clarify one thing.
OKRs are not to be confused with employee performance evaluations. And nor should employee performance evaluations be considered similar to OKRs. They are two completely different things. OKRs involve goals and results, while employee performance evaluations measure how well an employee had performed within a period of time.
Now, back to OKRs and why they are so great.
In the absence of discipline, ideas look good on paper but remain frustrating improbable. You might have a brilliant idea about streamlining a certain process. But if that idea does not help you accomplish your personal goals or align with company goals, then it is not relevant to your work. It could certainly be your pet hobby project, but it has no place at work. Establishing an objective and laying out the key results that you want to achieve ensures that your ideas, thoughts, and processes have a determined focus on them.
Here is a scenario: Employee A a set of objectives that need to be met. And so does Employee B. At some point of time, their objectives overlap and they realize that in order to achieve these objectives, they will have to collaborate. While initially, they might collaborate out of necessity, over time as they get comfortable, they will begin collaborating and communicating in earnest, all because they like working with each other.
Setting OKRs at every level, not just personal, but also at the company and team levels means that at some point or the other, all employees will begin communicating. And over time, this communication becomes genuine and organic and positively impacts performance. An additional benefit is that with some practice and skill, good performance can turn ordinary teams into high-performance teams.
Clarifies Goals and Work Processes
OKRs involve everybody and are not private. It is not right to expect employees to align themselves to organization goals when they have clue has to what the organization’s goals are! And how can we expect employees to figure out they need to collaborate with another colleague if they do not know what the colleague’s goals are?
Knowing about an organization’s goals, objectives and key results and how an employee fits into the grand scheme of things gives them a clearer idea about the big picture, and how they themselves fit into the big picture. Think of it as a schematic where everyone knows where they are headed and what they need to do. Once they know what role they play in an organization, employees find it much easier to meet goals and objectives.
Streamlines Efforts and Improves Focus
This point is an offshoot of the above one. When there’s an objective with measurable key results to be met, employees are able to streamline their efforts and focus on achieving results that matter to the objective. They learn to prioritize some tasks over the others and in essence separate the wheat from the chaff. Prioritizing becomes an important skill as well. Employees need to be able to gauge if what they are currently doing impacts their OKRs positively or detrimentally. If they find that their time is being spent on other laborious tasks, then they can figure out alternate solutions as well This ensures that employees spend their time and efforts productively.
Establishes Markers and Indicators of Success
If you ask me, this is one of the most important aspects of OKRs. More often than not, success tends to be measured by the end result. This isn’t to say that this method of determining success is wrong. However, it is one-dimensional and it does not take into account a lot of other factors such as the methods implemented in order to be successful. Or the skillsets, dedication and hard work involved. OKRs, on the other hand, redefine the meaning of success and the measurability of goals. They set visible targets and help convert work into something countable that even displays the amount of effort the employee expended on it.
Want to use OKRs at your organization and become the next big thing?
Request a demo today to found out how Engagedly can help!
Request A Demo
Get In Touch With Us