Roslin Okr

Google’s OKR system and how it can work for your teams

OKR (or Objective and Key Results) entails setting an inspiring Objective and several Key Results which measure if that Objective was achieved. This system was first developed at Intel by Andy Grove and later brought to Google by John Doerr.

3/5/2020 Management & Leadership

OKR Meaning

OKR (or Objective and Key Results) entails setting an inspiring Objective and several Key Results which measure if that Objective was achieved. This system was first developed at Intel by Andy Grove and later brought to Google by John Doerr.

The beauty of OKR is that it can be applied to an organisation, a team or an individual. In fact, it’s often applied to all three in an OKR cascade, thereby linked all three to one mission.

"OKRs have helped lead us to 10x growth, many times over. They’ve helped make our crazily bold mission of 'organizing the world’s information' perhaps even achievable. They’ve kept me and the rest of the company on time and on track when it mattered the most." – Larry Page, co-founder of Google.

How to use OKRs in your team

A core component of OKRs is an inspirational Objective, the achievement of which can be measured by certain Key Results.

Another key aspect of OKR is the rhythm that must be followed on a weekly and quarterly basis. This ensures commitment to the objective and alignment amongst a team. This entails a bit of discipline to have the required meetings but thankfully, these meetings can be kept quite short and are extremely energising for the team. Let’s explore OKR’s by understanding these three meetings.

Meeting 1: Setting your OKRs (Quarterly, max 4 hours)

Once a quarter you and the seniors in your team need to determine what your objective is. This needs to be inspiring and needs to really move the needle for your team. Yes, you are busy with several other things, but the chosen objective should be critical to your team for moving forward.

Let’s say that you’ve started a new coffee shop called The Coffee Koala that wants to sell high-quality coffee to locals. Our objective might be:

Establish Koala Coffee as the best coffee shop in this neighbourhood.

As a new business, this would change the game for you because all the locals who prize good coffee will know that you are the best. If you achieve your objective, that is.

So how do you know if you’ve achieved your objective and what must your team do to work towards it? That’s what Key Results are for. They are the way that you measure progress! In our example, how would you know that the locals regard you as the best? Here are some ideas:

  • Key Result 1: You could ask locals to rate the taste of your coffee out of 10. The measure would be that you want to achieve an average score of at least 8.5/10.
  • Key Result 2: You could use the Net Promoter Score to measure the whole experience of customers using your coffee shop. You want to achieve a score of at least 50/100.
  • Key Result 3: If you are the best, you should be selling lots of coffee. This is a nice way to tie revenue in. Thus, you would expect to be selling at least 100 cups a day.

So now that you understand what your Objective and Key Results are, how do you choose them? That’s what this 4-hour, quarterly meeting is for. You start by establishing your Objective. This is best done by brainstorming a few ideas and then grouping them into themes. After that, a simple majority vote and approval by the CEO decides the objective.

Next, your Key Results. Follow the same process of brainstorming several ideas and then use a majority vote to decide on the top three. And you’re done! The reason this can take a while is due to the brainstorming phase because this easily becomes a strategy discussion. Allow space for this because it means the senior team can all provide valuable input but also (and potentially more importantly) they will have a higher level of buy in to the plan.

Meeting 2: Monday Morning OKR Follow up (Weekly, max 1 hour)

This is a great way to start the week. It’s a very simple meeting whereby you discuss these four main areas:

  1. A reminder on what the OKRs are
  2. What are the critical things to be done this month? (max 4)
  3. What are the critical things to be done this week? (max 4)
  4. Health Checks: What other things do we need to keep an eye on?

The objective of this meeting is alignment and focus. You’ll notice that once you’ve set your OKRs, it becomes clear what needs to be done. Thus, this meeting becomes about getting everyone on the same page and focus on what’s important. Yes, there are many other smaller things that are being done but the items discussed here are what is critical to achieving the objective.

To continue with our Koala Coffee example, here’s what it might look like:

  1. Establish Koala Coffee as the best coffee shop in this neighbourhood:
  • Achieve an average tasting score of at least 8.5/10.
  • Get an NPS score of at least 50/100.
  • Sell at least 100 cups a day.
  1. Critical Tasks this month:
  • Install Coffee Machine and be producing great tasting coffees
  • Put a system in place to measure NPS for each customer
  • Put a system in place to measure daily sales volume and revenue
  1. Critical Tasks this week:
  • Assess new coffee machines and order one
  • All baristas complete barista training
  • Research and select an accounting system that can provide daily sales data
  1. Health Checks:
  • Compliance: Red because we haven’t finished our health inspection yet.
  • Team Health: Green because our team is highly focused and excited to pursue this Objective.

Meeting 3: Friday Celebrations (Weekly, as long as you like!)

This is straightforward: Each Friday after work, get the team together with their snacks of choice and celebrate the wins in a fun way. For Koala Coffee, this would mean getting the team together after the store closes (let’s say 10 pm) to share these wins. These could be anything from the measures going up like NPS going from 10 to 20 or a barista sharing some customer compliments about the coffee.

The Next Cycle

At the end of the quarter, have your Quarterly OKR meeting again but start by discussing the previous quarter’s results before setting an Objective and Key Results for the next quarter. That’s it! That’s the basic OKR flow. You can add massive value to your enterprise by following this simple process.

There are lots of optimizations and tweaks that you can make to the flow and there is also the process of cascading OKRs which is relevant to much larger organisations. We’ll write about these later.

Some more OKR Examples

To drive home the idea of OKRs, here are some more examples.

Here’s a repeat of our Koala Coffee example:

Establish Koala Coffee as the best coffee shop in this neighbourhood 3 Main meetings:

  • Achieve an average tasting score of at least 8.5/10.
  • Get an NPS score of at least 50/100.
  • Sell at least 100 cups a day.

Let’s say you’re a software development team for a SaaS business:

Build a top-tier authentication system by refactoring the current User Authentication module:

  • Survey 10 users regarding issues with the authentication module.
  • Refactor 100% of the authentication submodules.
  • Document 100% of the authentication submodules.

Let’s say you run a finance team inside a mid-size corporation:

Improve Annual Budgeting and Forecast process:

  • Review all 10 prior year department budgets and get feedback from their managers.
  • Get a budget quality rating of at least 9/10 from department managers.
  • Complete Budgeting and Forecasting training with all 7 members of the finance team.

Top OKR Books for further reading

OKRs have become widely popular due to their use at Google and being a key component of Andy Grove’s management classic: High Output Management. There are many books and articles on the matter. Here are some of our favourite reads:

Radical Focus – Christina Wodtke

Measure what matters – John Doerr

Objectives and Key Results – Paul Riven & Ben Lamorte

High Output Management – Andy Grove

 

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WRITTEN BY
JP Olivier
Chartered Accountant, self-taught coder, entrepreneur, investor. Co-Founder of www.roslinlab.com and CFO at www.sonictelecoms.co.za.