Google Ventures Startup Lab | GV partner Rick Klau covers the value of setting objectives and key results (OKRs) and how this has been done at Google since 1999. Understand the key attributes of effective OKRs and how to apply them in your own organization.
Why CXOs Choose OKRs?
The OKRs methodology is appealing to many CEOs because it is one of the few that encapsulates the organization both top-down and bottom-up. Unlike traditional goal setting methodologies, the company vision and long-term strategies are being converted into quarterly objectives with clear key results. The key results are then assigned to your management team and eventually to each team member.
OKRs and CFR (Conversations, Feedback and Recognition) together provide a clear path to setting and achieving the most inspired to the most trivial goals businesses and teams pursue.
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“Our mission is to galvanize leaders to set and achieve audacious goals—through inspiration, education, and application“
– John Doerr
Co-Founder & Publisher, © What Matters
Ref. Measure What Matters, World’s 1st & #1 Book on OKRs
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OKRs:
- Publicly available to the entire company.
- Not directly related to performance evaluation.
- Set, reviewed, and revised quarterly (and annually).
- Need to be supported by leadership, (simple) tools, and (lightweight) process.
- Speaker recommends simple, open-source tools such as Wikis, Google Docs, etc.
Objectives:
- May or may not be measurable but must be strategic (ex: accelerate revenue growth).
- Must link to (i) the OKRs at the next level up (ii) what the individual wants to work on .
- Top 5 objectives
- Mostly (60%) set by the individual .
- Objective score is the straight, equal weighted average of the key results grades (avoid weighting).
Key results:
- Must be measurable (ex: launch a new product or feature; achieve win rate of x%).
- Should be a little uncomfortable so that you are always striving.
- Self-graded quarterly (they should average 0.6 or 0.7 so there is room for improvement; 0.4 or below is bad, but a learning management system will help to improve).
- Limited to 4 key results per objective.