Objectives and Key Results – OKRs

Creating, managing and aligning goals is always a challenge for entrepreneurs, especially ones that haven’t experienced it in other organizations. Two approaches I’m fond of are SMART Goals and Objectives and Key Results (OKRS). Today, let’s take a look at OKRS. One of the best resources out there is the Google Ventures video titled Startup Lab Workshop: How Google Sets Goals – OKRS. Think of OKRS as goals for every person in a company such that all priorities are aligned and measured.

Here are the slides from the video courtesy of John Doerr when he first introduced them to Google’s founders:

• Objective
  To develop a workable model for planning as measured by:
  • Key Results
    • Finishing the presentation on time
    • Completing a sample set of 3 months objectives and key results
    • Have management agree to institute a trial system for a 3 month period
• Example pro football team
  • General Manager
    Makes $ for owners
    • Win Super Bowl
    • Fill stands to 88%
  • Head Coach
    Win Super Bowl
    • 200 yd passing attack
    • No. 3 in defensive stats
    • 25 yd punt return avg
  • Public Relations
    Fill stands to 88%
    • Hire 2 colorful players
    • Get media coverage
    • Highlight key players
  • Defense
    #3 Defense
    • Less than 100 yds passing
  • Offense
    200 yd passing attack
    • 75% completion
  • Special Teams
    25 yd punt return
    • Train blockers
  • News Staff
    Highlight key players
    • 3 Sunday feature articles
  • Scouts
    Hire colorful players
    • Visit to colleges
• Benefits
  Why use objectives and key results
  • Disciplines thinking
    (The major goals will surface)
  • Communicates accurately
    (Let’s everyone know what is important)
  • Establishes indicators for measuring progress
    (Shows how far along we are)
  • Focuses effort
    (Keeps organizations in step with each other)
• Typical Process
  • Staff Meetings and One-on-Ones
  • Corporate Objects
    ->
  • Department Objectives
    ->
  • Group Objectives
    ->
  • Individual Objectives
• Communication
  • 1:1
    • Private
    • Develop/negotiate key results
    • Monitor progress
  • Staff Meeting
    • Group
    • Develop/negotiate objectives
    • Evaluate group performance
  • Typical Cycle
    • Q1
      • End
        • Develop Draft Q2 at Staff
        • Start Q2 KRs
    • Q2
      • Beginning
        • Grade Q1 KRs at staff
        • Final Q2 KRs
      • Late Beginning
        • Present graded Q1 and new Q2 KRs at company meeting
      • Middle
        • Monitor Q2 KRs at staff
      • Late
        • Establish Q3 KRs
    • Q3
      • Grade Q2 KRs
      • Final Q3 KRs
• Some Basic Hygiene
  • Maximum 5 objectives with 4 key results
  • 60%+ objectives from bottom up
  • All must mutually agree – no dictating
  • One page best – 2 maximum
  • Not a performance evaluation weapon
  • 60 – 70% “Grade” = Good
    40% = Bad
  • Continue incomplete key results only if they are still important
• End Product
  • Everyone is working towards the same result
    • Focuses effort
    • Fosters coordination
  • Keeps organization tuned in
  • All operations have linked objectives and key results that support the company
  • Are fun to do!

More notes from Google Ventures on OKRs:

• Keys to OKRs
  • OKRs are:
    • set quarterly and annually
    • measurable
    • set at personal, team, and company levels
    • publicly available to the entire company
    • graded each quarter
• Elements of an OKR
  • The objective..
    • is ambitious
    • feels a tad uncomfortable
  • The key results..
    • clearly make the objective achievable
    • are quantifiable
    • lead to objective grading
• Personal / Team / Company
  • Personal OKRs define what the person is working on
  • Team OKRs define priorities for the team, not just a collection of all individual OKRs
  • Company OKRs are big picture, top-level focus for the entire company
• Sample Personal OKRs
  • Objective
    Accelerate Blogger revenue growth
    • Key Results
      • Launch “Monetize” tab to all users
      • Implement AdSense Targeting to increase RPMs by xx%
      • Launch 3 revenue-specific experiments to learn what drives revenue growth
      • Finalize PRD for Blogger Ad Network, secure eng allocation to build in Q1
• Sample Personal OKRs
  • Objective
    Grow Blogger traffic by xx% over organic growth
    • Key Results
      • Launch 3 features that will have a measurable impact on Blogger traffic
      • Improve Blogger’s 404 handling, extend time on site, and pageviews per session on sessions that start with a 404 error by xx%
• Sample Personal OKRs
  • Objective
    Improve Blogger’s Reputation
    • Key Results
      • Re-establish Blogger’s leadership by speaking at 3 industry events
      • Coordinate Blogger’s 10th birthday PR efforts
      • ID and personally reach out to top xx Blogger users
      • Fix DMCA process, eliminate music blog takedowns
      • Setup @blogger on Twitter, regularly participate in discussions re: Blogger product
• Grading the OKRs
  • .6 – .7 is your target
  • Scores matter less than the process
  • Company-wide scoring reinforces commitment
  • Use low grades to reassess: worth doing? What will we do differently to achieve our objective?
• Publicly Grading the Company OKRs
  • Company-wide quarterly meeting
    • grade last quarter’s OKRs
    • get OKR owner to explain grade, explain adjustments for upcoming quarter
    • set this quarter’s OKRs

Entrepreneurs would do well to watch the objectives and key results video and implement them in their company.

What else? What are some more thoughts on objectives and key results?