OKRs, short for “Objectives and Key Results”, are a strategic management framework used to translate an organisation’s strategy into short-term, measurable goals. The core principle behind OKRs is that “goals should lead people”, in contrast to “managers should lead people”.
“The key result has to be measurable. But at the end you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it.”
Andy Grove, former Intel CEO and inventor of OKR
John Doerr carried OKRs from Intel to Google
As an employee at Intel, John Doerr learned about OKRs, and as an early investor in Google he brought the concept into a very early, not-yet well-structured company set-up. It helped the founders and the early employees to focus, to adapt constantly and to manage growth in a controlled way. OKRs have been spreading fast since then. First adoption took place in Silicon Valley, but tech companies from all over the world use the goal-setting framework today, and so do corporates such as BMW and Siemens.
If rolled out and applied properly, OKRs translate a company’s strategy into measurable, focused goals for teams, increase alignment and transparency, and support a more agile culture.
How many objectives and key results a set contains
OKRs consist of a limited set of short, precise goals, each of them a single sentence, and each measured through well-defined key results that are unambiguously and objectively measurable. Many organisations confine themselves to 3-5 objectives, with each having between 2-4 key results. The language is always simple and precise, so that anyone who is an “informed insider” can understand what is behind it.
How OKRs are used for strategy implementation
OKRs are derived from a well-defined strategy or from other reference points such as KPIs. While strategy is typically defined for a time horizon of more than 18 months, OKRs are usually defined for 3-month cycles. Teams start with the strategy and work out which goals are most relevant for their own work, then derive objectives from that and prioritise them. Repeated regularly, this creates a goal-setting cycle that runs in both directions: it carries the top-down strategy, and the OKRs it produces feed back into the next strategy cycle. Teams iterate on priorities, align on objectives and deliverables, and measure progress.
OKRs are not designed as a performance management system. They exist to encourage teams to set ambitious goals and to push on what they believe is right. That is the mechanism by which strategy stops being a linear top-down goal-setting process and becomes something the organisation works with, across departments and hierarchy.
Five benefits companies actually realise
Companies come to OKRs with different expectations. Five benefits recur:
- OKRs translate strategy into measurable, focused goals.
- OKRs create a regular feedback loop on strategy.
- OKRs create transparency on actual results: well-defined OKRs allow for progress tracking, adjustment, and re-prioritisation. OKRs are usually transparent, meaning everyone can see the objectives and key results of all other teams.
- OKRs discipline thinking and communication: they create a common language for goal setting in an organisation. The number of OKRs is limited and the language is simple.
- OKRs shift mindsets towards a more digital and agile culture: they do not aim to cascade goals perfectly but to emphasise top priorities and actions.
How much of this a company realises depends on whether leadership and teams are willing to try new things and to adapt the OKR system to their own needs.
The pilot decides what the OKR system will look like
Most organisations already have well-established strategic goal-setting frameworks, management systems and processes, which is what makes the introduction look difficult. The step to take before anything else is to establish how much ambition and commitment the leadership team actually has. The single biggest reason for success, and for failure, of OKR introductions is the support and participation of top management in the process.
Starting with a pilot is usually the right approach, with a selection of initial teams that differ in scope and ways of working. There is no one-size-fits-all OKR system: how a company defines, aligns and updates OKRs gets worked out during the first one or two pilot cycles. What that phase produces is the scalable approach for the rest of the organisation.
The OKR questions we get asked most
What does OKR stand for?
Objectives and Key Results. The objective is a short, plainly worded statement of what a team wants to achieve. The key results are the two to four measures that show whether it did. The pairing is the whole method: an ambition people can state from memory, attached to numbers that settle the question without argument.
How many OKRs should a team have?
Most organisations settle on three to five objectives per cycle, each with two to four key results. The limit is the point of the exercise. A team with fifteen objectives has a task list rather than a set of priorities, and the language stops being simple enough for anyone outside the team to follow.
How long is an OKR cycle, and how does it relate to strategy?
OKRs typically run in three-month cycles, while the strategy behind them is set for a horizon longer than 18 months. Teams read the strategy, decide which goals matter most for their own work, and derive objectives from that. Each closed cycle then feeds back into the next strategy round.
Are OKRs a performance management system?
No. OKRs are designed to encourage teams to set ambitious goals, which only works if missing a key result carries no penalty. Tying them to appraisal or bonus produces the opposite behaviour. Teams set targets they know they can hit, and the framework loses the function it was introduced for.
How do you introduce OKRs in a company?
Through a pilot with a small number of teams chosen for different scope and ways of working. The first one or two cycles are where the company works out how it will define, align on and update OKRs, because no standard configuration fits every organisation. What the pilot learns becomes the scalable approach for the rest.
