As the former Intel CEO Andy Grove explained in his book, High Output Management, there are two questions to be answered to successfully setup a system of shared objectives, like OKRs:
- Where do I want to go? This answer provides the objective.
- How will I pace myself to see if I am getting there? This answer provides the milestones, or key results.
John Doerr, one of Google’s early investors and a current Board of Directors member, learned about OKRs from Andy Grove while at Intel. Doerr explained that when he joined Intel, the company was transitioning from a memory company to a microprocessor company, and Grove and the management team needed a way to help employees focus on a set of priorities in order to make a successful transition. OKRs helped them communicate those priorities, maintain alignment, and make that switch.
A few decades later in early 2000, Doerr introduced OKRs to Google’s leadership who saw the value and started testing them out over the next couple of quarters. Today, Google sets annual and quarterly OKRs and holds company-wide meetings quarterly to share and grade OKRs.
OKRs are used far beyond Silicon Valley, in a wide range of organizations. Sears Holding Company, a Fortune 100 company, rolled out OKRs to their 20,000 employees and saw positive impacts on bottom-line sales and individual performance. Meanwhile, the comparatively tiny IT team at McKinnon Secondary College in Australia has been using OKRs which has improved the team’s focus and alignment.
Studies have shown that committing to a goal can help improve employee performance. But more specifically, research reveals that setting challenging and specific goals can further enhance employee engagement in attaining those goals. Google often uses “Objectives and Key Results” (OKRs) to try to set ambitious goals and track progress.
Read about OKR’s on Re:Work where you can find much more interesting stuff and downloads.