OKR: manage with transparency and depth

The term ‘Objectives and key results’ doesn’t exactly roll off the tongue. John Doerr even jokes about that in his 2018 TED Talk. Doerr, as well as being an icon of the American investment scene, is considered one of the inventors of OKR, together with Intel founder Andy Grove.

The two managers introduced the method at Google in 1999. The company founders Larry Page and Sergey Brin were not exactly enthusiastic, Doerr recalls. But they felt there was no other way to manage the company, so they gave it a go.

Management by objectives: if you can measure it, you can manage it

Google is now one of the most valuable companies and brands in the world. And the company still stands by management by objectives – MbO for short. The foundation for management by objectives dates back to an insight from the 1950s. Peter Drucker, pioneer of modern management theory, said at the time: if you can’t measure it, you can’t improve it.

Successful management with OKR is the natural consequence of that conviction. It is based on two simple factors: measurable ‘key results’ are allocated to every corporate target (‘objective’). These are checked at regular intervals, compared and redefined.

The right focus: the success story of management by objectives and the OKR model

The company objectives specify what should be achieved together. Employees and management develop these objectives in one or more workshops. The measurable key results break down how exactly these objectives are to be reached and how success is to be measured. In this way, after a specified time period, everyone can relatively simply and transparently check whether a company is working successfully. Or, as Intel founder Andy Grove put it: ‘Did I do that, or did I not do that? Yes. No. Simple.’

The clear and intuitive structure of objectives (what?) and key results (how?) is the reason the OKR method is so successful. From Intel, Google and Twitter to mymuesli and Flixbus: having been thought up and tested out in Silicon Valley, it is now not just stock-exchange-listed American and European companies who put their faith in OKR, but also rock stars such as Bono from U2.

The Irish musician has been involved in the legendary Live Aid concerts, the fight against AIDS and debt relief for the world’s poorest countries. All in all, a project of gigantic scope with more than ambitious objectives, which Bono and his team also manage with the help of OKR. The rock star explains that OKR provides an environment for risk and trust where failing is not a fireable offence.

The OKR trick: formulate goals, make them measurable and always stay on the ball

An interesting consequence of this is that the way employees and managers find the right focus and define company objectives together simultaneously ensures that a transparent communication system is created within the company.

The formulation of objectives throws up questions about the vision of the company and the meaning of the work. Team objectives are derived from the company objectives, and ultimately each individual team member can set their own personal objectives. There is a clearly thought-out concept for all these coordination processes throughout the company.

Agile and ambitious: the benefits of management by objectives and OKR

Agile management with the OKR method is thus not a top-down management method driven by external stipulations and figures. Rather, it is about participation, motivation and working satisfaction for all employees, from the management level to the individual teams, departments and their members.

Most companies who work with the OKR model formulate, measure and evaluate their objectives and key results on a quarterly basis. In the initial start phase, the preparation, the objectives are developed in moderated workshops, usually with the support of an OKR coach.

Establishing objectives includes strategic corporate goals introduced by management and the personal goals of each individual employee. In the second phase, the specification, they assign measurable results that they want to work towards for their objectives. In the end, the measured results will be evaluated and assessed. Failing to achieve results or making mistakes is expressly permitted in this process, in line with the motto ‘Sometimes you win, sometimes you learn’.