OKR

18 May 2015 | Product Management

I have heard about OKR (Objectives and Key Results) when I lived on Silicon Valley, a decade ago. Now I am hearing about it again and again. I am optimistic the way the agile community is looking at it. OKRs might help connecting agile engineering practices with organizations performance management.

OKR is a goal setting framework created by Intel in the 70s which was used by VCs from Silicon Valley, therefore adopted on great companies such as Google, Oracle, Twitter, LinkedIn and Dropbox. Today OKRs are being applied worldwide from startups to large organizations.

OKR main idea is that the organization sets a cascading set of objectives. For instance, OKRs are to be defined for the organization. Then OKRs are defined for the departments and business units, then for the teams. And so forth, cascading to  individuals setting up their own OKRs. Each entity (organization, department… individual) should have 4–6 objectives and up to 5 Key Results per objective.

The following is a great OKR template shared by Felipe Castro:

I will (Objective) as measured by (this set of Key Results).

Felipe then explains that a OKR has two components, the Objective (What we want to achieve) and a set of Key Results (How do we know if we are getting there). The Objective is qualitative, and the key resulta are quantitative. The objective sets a goal for a set period of time, usually a quarter. The key results tell you if the objective has been met by the end of the time.

Below are a few OKR examples form different articles:

Example 1 (from breateHR´s article: How Silicon Valley hits its targets)

Objective: Increase direct sales by 10% in Q4
Key Results:

  • Introduce new sales tracking method
  • Carry out staff training on objection handling
  • Increase repeat sales on website by 10%

Example 2 (from Felipe Castro´s article: an introduction to OKR)
Objective: Delight our customers

Key Results:

  • Recurring visits: average of 3,3 visits per week per active user.
  • Reach a Net Promoter Score of 90%.
  • Non paid (organic) traffic of 80%.
  • Engagement: 75% of users complete a full profile.

Example 3 (from Scott Allison´s article: OKRs – objectives and key results)
Objective: Increase sales by 25% in the next quarter

Key Results:

  • Hire 2 great new sales people
  • Introduce new more effective sales collateral
  • Increase conversion rate on visits to website by 10%

Example 4 (Christina Wodtke´s article: The Art of the OKR)
Objective: Launch an Awesome MVP.
Key Results:

  • 40% of users come back 2X in one week
  • Recommendation score of 8
  • 15% conversion

Example 5 (Wrike.com´s article: If You’re Not Using OKRs for Quarterly Planning, Stop and Read This)
Objective: Increase brand recognition and awareness

Key Results:

  • Increase media engagement by 20%
  • Launch customer referral program by September 1
  • Extend social media reach and visibility to 2 new target markets
  • Expand thought leadership program by placing guest articles on 4 industry-related sites with an Alexa ranking of at least 30,000.

 

References:

Business Insider article about OKRs at Google

breateHR´s article: How Silicon Valley hits its targets)

Felipe Castro´s article: an introduction to OKR

Christina Wodtke´s article: The Art of the OKR

 

Paulo Caroli

Paulo Caroli is the author of the best-selling book “Lean Inception: How to Align People and Build the Right Product” (the first on a series of books about Lean Strategy and Delivery). He's also the creator of FunRetrospectives.com , a site and book about retrospectives, futurospectives and team building activities. Caroli writes on this blog frequently. Receive the next post in your email. Sign up here .
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