Hello to my lovely subscribers, I hope you all are doing well!

This edition of the newsletter brings a very exciting topic which is OKR and since its quite a big topic in itself, I have planned to explain everything you need to know about OKRs and how to implement them in 3 parts.

In the first part (1/3) of OKR 101, we will understand the basics of OKR framework, and why this can be a game changer for any organisation which is serious about its goals and their effective execution.

Origin of OKRs

Let’s look at the origin of the term OKR first. It is important to understand why it was created in the first place.

John Doerr coined the term OKRs but it was his mentor Andy Grove under whom he learned this revolutionary management approach of goal setting and accountability during his time at Intel in 1970s.

Andy had created this system for simple goal setting that was polar opposite of the conventional management by objectives (MBO) systems, which tend to be top-down, hierarchical, annual, and linked to compensation, as told by John Doerr.

So the problem at that time was the goals were rather some procedures or set initiatives that were decided by the higher management and followed by the people below leading to lack of new ideas, complete transparency of the strategy and effective execution.

Over the next decade, John practiced and refined the OKR framework at different organisations such as Kleiner Perkins Caufield & Byers and in the late 1990s implemented this framework at Google, where he joined as a board member and the rest is history.

Larry page, who co-founded Google said, “OKRs have helped lead us to 10x growth, many times over”

So what is OKR really?

We talked about the origin of OKRs and why this framework came into existence in the first place, so now we can jump into the defintion,

OKR stands for ‘‘Objective and Key Result’’

It is a collaborative goal setting framework for organizations, teams or even individuals. OKR ensures that the whole organization focuses the efforts on the same important issues or goals of the company.

When each and every individual in the company knows what the company’s goals are for the next quarter, 6 months or a year, it gives a sense of direction and accountability to everyone to be focused and work towards that goal.

As said by Yogi Berra, “If you don’t know where you’re going, there are huge chances that you might not get there” and that is the essence of OKRs to provide everyone in the organization the right path/direction for them to follow and know when they have reached the destination.

What are Objectives?

Objectives are the description of something that you want to achieve with your product in the future, near or far depending on the duration of the OKRs but in essence sets the direction. This is analogous to the destination that is entered in the Maps, as per the direction where you want to go.

For eg. Reduce the carbon footprint of the Product X, Increase the customer satisfaction of the product etc.

What are Key Results?

Key results are the measurable outcomes or result needed to achieve the set objective. Key results tells us clearly whether the set objective has been reached or not. It depicts the progress towards the objective just like the sign-post tells how much far the destination is from the current location.

For eg. Increase the website traffic to 150%, Improve the NPS score from 20 to 30 etc.

When Objectives and Key Results are used together in a framework called OKRs, it bridges the gap between strategy and execution and move from output to outcome based approach.

Why should any organization use the OKR framework?

There are multiple benefits for any company to implement this goal management framework such as:

There is no doubt regarding the impact of this goal setting framework as many big companies have been using this for very long time such as Google, Amazon, LinkedIn, Microsoft, Netflix, Asana and the list goes on and on.

Now it is also imperative that the OKRs that are set have to be quality OKRs as these will define the path for your product or company. Hence, in the next part of this OKR 101, we will understand how to set great OKRs, what differentiates a great OKR with a bad one etc. So stay tuned for that! 😃

If you made it till the end, Thank you for the patience and putting the time to read this article. YOU are amazing!

I hope you enjoyed reading this and found something interesting. As always, I had fun writing this article and if you learned something from it then it would be great if you could like and share it to someone who is very new to PM and might find it useful. Also please comment below if you have any suggestions for improvement. That would be awesome, Really! 😁

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