Understanding OKRs is a Piece of Cake
Intel, Google and many other successful organizations espouse using OKRs to guide their business strategy implementations. Here, we’ll get a basic idea of what OKRs are and how they are used in business and in life.
Let’s start with an example:
Say you are having a dinner party tomorrow night at 7pm and you want to have homemade chocolate cake for dessert.
Your goal is thus:
“Have a homemade chocolate cake, like the one pictured below, ready for my guests to enjoy by 8pm tomorrow night.”
Notice that your goal is clearly defined with a due date, so you know clearly whether you succeeded or failed.
Next, to reach your goal, you lay out recipe steps that are themselves clearly defined and measurable.
- Gather ingredients and tools
- Preheat oven to 350 degrees F.
- Grease and flour a 9x13-inch pan.
- In a large bowl, combine the flour, sugar, cocoa, baking soda, baking powder and salt.
- Make a well in the center and pour in the eggs, coffee, milk, oil and vinegar.
- Mix until smooth; the batter will be thin.
- Pour the batter into the prepared pan.
- Bake in the preheated oven for 35 to 40 minutes, or until a toothpick inserted into the center of the cake comes out clean.
- Allow to cool.
The idea is that if you faithfully perform each of the steps above and begin at an appropriate time, you’ll have a cake ready for your dinner party dessert.
Now, if we simply rename the goal of having a cake for dessert the objective and rename the recipe to make the cake the key results, we understand the gist of “OKRs ”(objectives and key results).
The objective is the end-state you want to become reality. You may make your objective specific and with a set due date like we did above, or you may make your objective relatively nebulous and open-ended.
- Lose 10 pounds within 10 weeks. (specific)
- Be a good romantic partner. (nebulous)
- Be able to release code and deploy to production 10 times a day (specific)
- Be an effective leader. (nebulous)
Note 1: For larger objectives spanning weeks, the literature recommends you focus on no more than 3 per quarter per context (e.g. work, home, relationship) to keep focused and increase chances of success.
Note 2: Ensure that any team objectives you set are in line with organization-level objectives. If it is understood that you meeting your objectives is also a step forward towards the organization meeting its own objectives, you’ll have an easier time gaining executive buy-in since you’re interests are aligned.
Key results are the recipe for reaching your objective. They are the measurable, tactical tasks you must accomplish to reach the goal.
Objective (the goal): Lose 10 pounds within 10 weeks.
Key Results (the recipe):
- exercise 1 hour per day for 10 weeks
- consume no more than 2000 calories per day for 10 weeks.
Objective (the goal): Be a good romantic partner
Key Results (the recipe):
- Go on “date night” alone at least once a week.
- Say, “I love you,” at least once a day.
- Give a romantic gift at least once every 8 weeks.
There are a few important characteristics of key results.
- Key results are measurable. You either meet the requirements or you don’t. They will have a number attached to them. In business, they are the key metrics for the team or organization.
- Key results are sufficient to reach the objective. I.e. if you meet all the key results, you will necessarily meet the objective. IF you satisfy all the key results and you still did not meet the objective, you had incorrect or incomplete key results. We can see this in our chocolate cake example above. We could have completed all the steps in the recipe and still not had a cake like in the picture. Why? We were missing at least one recipe step (aka key result): add icing.
- Key results can be challenging to determine. Some objectives, like making a cake, may have known key results that will result in the objective being met. Others, like “Be an effective leader,” may not have fully established key results. They are still up for debate. This is why there is such high readership for so-called ‘listicles’ with titles like “10 Things Effective Leaders Do Every Day”, “5 Ways to Reignite Your Relationship” and the like. These articles are essentially positing effective key results one could use to make those objectives (goals) realities.
Take away (tl;dr)
If you understand that an objective is a goal and that the key results list is the recipe to meet that objective, you understand the basics of OKRs (objectives and key results).