A startup is defined by growth. To attain a sustainable growth the team needs to be focused and move fast. As you know, it is very hard to work on the right things, prioritize and not be distracted by other things. This is where OKR (Objectives and Key Results) can help you. OKR is an effective goal setting method which purpose is to help you achieve great execution by keeping your team focused and working towards the same result. OKR is used by successful companies like Google, LinkedIn, Twitter, Uber, MongoDB and many organizations across Silicon Valley. In this post you will see what OKR is and how you can make it work for your startup.
“If you want to understand startups, understand growth. Growth drives everything in this world.”Paul Graham, Startup = Growth
OKR was initially invented at Intel in the 1970s. The original system which gave birth to OKR is the MBO (Management by Objective) system. Andy Grove, Intel’s former CEO, wrote in his book High Output Management : “The idea behind MBO is extremely simple: If you don’t know where you’re going, you will not get there.” Or, as an old Indian saying puts it, “If you don’t know where you’re going, any road will get you there.”
OKR is an evolution of this model that helps you keep focus.
In 1999, when Google was less than a year old, John Doerr who worked at Intel presented OKR to Google’s leadership. They saw the benefits of the method and Google has been using it ever since to support its growth from less than fifty employees to thousands today. But the popularity came late in 2013 when Rick Klau a partner at Google Ventures posted his presentation How Google sets goals: OKRs to many startups that want to use OKR. The presentation got a lot of views and many people through this heard about OKR.
OKR is a list of qualitative goals, set for a period of time. Usually OKR is defined quarterly. Each objective, has less than 5 key results which are quantitative metrics. The objective is what you have to accomplish and the key results is how you are going to get that done. The key results helps to measure if the objective has been reach at the end of the period.
For each period OKR is set at every level of the organization : company, team and individual. The main goal of OKR is to help team focus their efforts and move in the same direction to succeed. OKR allows you to set a real coordination in your organization, communicate accurately and establish indicators to measure success. So you will always know how far you are in achieving your goals. This helps you and your team keep the momentum and intensity high.
To be effective, OKR must have these characteristics below :
When you set your objective, the targeted achievement grade is between 60% and 70%. But if you get less than that, don’t take it as a failure but as an opportunity to learn and do better next time. If you hit 100% of success, your OKR is not ambitious enough. And it is very important not to use OKR as a performance evaluation.
By setting clear goals, everybody on the team can focus on a unique and same result. OKR always lets you know what are your priorities and keep you away from any distraction. With ambitious objectives, you always try to do more and go beyond what seems impossible. OKR helps everyone on the team stay engaged and productive because they know exactly what has to be done, what is expected from them and how this contributes to the company growth.
OKR is a powerful method to set, execute and achieve goals. But to make it work for your startup, make sure that everyone is involved and committed. When it is well implemented, OKR establishes a real culture of goals setting and accomplishment in startup teams. This key for growth. Now, you know everything about OKR. Are you excited to try it in your startup ? Read the part 2: Steps to successfully setup OKR
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