OKRs deliver three things when they work: strategy translated into goals that can be measured inside a quarter, visibility across the organisation of who is working on what, and a defensible reason to drop work that contributes to nothing. They fail when the framework is installed as a process while the behaviour it depends on stays unchanged. Leaders keep setting direction behind closed doors, teams keep absorbing work outside the agreed objectives, and the cycle turns into a quarterly reporting exercise.
Objectives and Key Results was developed by Andy Grove at Intel in the 1970s and reached wide adoption after John Doerr brought it to Google in 1999. Companies pick it up when their planning cycle, built for continuity, stops matching the speed at which their market moves.
What are OKRs?
Objectives and Key Results, or OKRs for short, are a management and goal-setting system that connects qualitative goals (objectives) with measurable key results at all organisational levels of a company. The concept runs as an iterative cycle whose purpose is to translate the long-term strategy of a company into shorter-term goals that every level can see. Each cycle is adapted on the results and insights of the one before it. That is what separates OKRs from strategy concepts built for long-term continuity and stability: the plan moves with the market.
Intel needed a way to steer through a business-model change
The OKR method was developed in the 1970s by Andrew Grove, one of the co-founders of the US semiconductor manufacturer Intel Corporation. During this period, the market in the areas of computers, semiconductors, and microprocessors was gaining enormous momentum. Grove foresaw that the management methods used up to that point would not be suited to a market environment characterised by extensive growth, high innovation pressure, and a steadily increasing number of competitors.
In the course of this rapid development, Intel also had to transform its business model from the production of memory chips to the manufacture of microprocessors and semiconductor products. In order to keep pace with the fast-moving and dynamic nature of the market and to manage the internal transformation process as well as possible, Grove developed the OKR concept.
OKRs first gained widespread popularity through John Doerr, who began his professional career at Intel in 1974 and adopted Grove's innovative management method. Doerr then moved to the venture capital firm Kleiner Perkins Caufield & Byers in Silicon Valley in 1980. With Doerr as investment manager, Kleiner Perkins invested in Google in 1999, at that time still a small start-up with only 40 employees. Doerr convinced the two founders Larry Page and Sergey Brin of the OKR method, and they immediately integrated the concept into the company's operations. The at that time still relatively unknown management approach was then continuously further developed and remains part of the company's DNA to this day. In the meantime, numerous further companies have recognised the advantages of OKRs and adopted the concept, including mymuesli, LinkedIn, Uber, BMW, and Siemens.
Four properties every OKR has to carry
Typically, OKRs are:
- Ambitious: not easy to reach, but not unrealistic
- Forward-pointing: aligned with mission, vision, strategy, and annual planning
- Outcome-oriented: the benefit stands in the foreground (outcome thinking)
- Time-bound: completed by the end of a defined cycle
Ambition needs a working range. Goals set too low lose tension and motivation, goals set too high produce overload and resignation.
Objectives
An objective names a corporate goal that is in alignment with the overarching mission of the company, thereby advancing the implementation of the corporate strategy and making a positive contribution to the company's mission and vision.
An objective therefore answers the question: what is to be achieved?
Objectives typically have the following characteristics:
- Qualitative: cannot be quantified or measured
- Memorable: easy to remember, formulated in complete sentences
- Inspiring: not a standardised phrase
Key Results
A key result is a quantifiable key outcome that objectively and clearly indicates whether a goal has been reached. Key results can be tasks, measures, and activities that contribute to reaching the objective.
A key result answers the question: what needs to be done in order to reach the objective, and how can the degree of goal achievement be measured?
Key results typically display the following characteristics:
- Measurable: can be represented numerically
- Concrete: clear description of the task
- Independent: individual key results do not influence each other and do not build on one another
OKR formula
For the formulation of objectives and their associated key results, the following OKR formula by John Doerr has proven helpful:
We will [objective] as measured by [set of key results].
The formula can also be used to check whether goals and key results fit together, are aligned with one another, and work in terms of content.
OKR sets
An OKR set refers to one or more objectives together with their associated key results.
How do OKRs work?
Two conditions decide whether the framework survives contact with the organisation: a structured introduction, and disciplined application after the novelty wears off. Where the routine slips, the advantages go first and the risks remain. Direction blurs, goals compete, and the OKR set becomes a list nobody steers by.
How many objectives and key results one cycle can carry
The overarching goal-setting of a company is anchored in its vision and mission, which should accordingly be clearly defined and understood. From this mission, the corporate goals and the underlying corporate strategy for the coming one to five years are then derived. Objectives and key results typically define the goal-setting for the next two to six months within an OKR cycle.
For one OKR cycle, between two and five objectives should be defined, each of which is in turn subdivided into two to four key results.
When defining OKRs, the central question is always how and to what extent an OKR set contributes to the corporate strategy and the achievement of goals.
Top-down or bottom-up: why most companies end up with both
As a rule, the entire company is involved in the development of the goal-oriented OKR concept. Some companies prefer a top-down approach, so that OKRs cascade down to departments, teams, and employees. On the other hand, there is the bottom-up approach, in which OKRs come from the teams and the content is carried upward through the hierarchy. Often a balance of both approaches is the most effective way forward.
The framework only works if every employee:
- has understood the company's mission (vision, mission, strategy, goals)
- has understood the OKRs derived from it
- has access to all OKRs implemented within the company
Ideally, employees are given the opportunity to modify or supplement the proposed OKRs of colleagues and, beyond that, to propose their own OKRs. Employees who can shape the OKRs they will be measured against commit to them more readily than employees who receive them.
Transparent communication of the OKRs is also important. Knowing the OKRs of colleagues makes it possible to avoid potential overlaps and to better understand more complex interdependencies. This not infrequently leads to interdisciplinary exchange and constructive communication between teams and departments.
The cycle is what makes the framework adaptive
The iterative cycle is where the adaptiveness comes from. Insights from the completed run feed the planning of the next one, so the working method improves alongside the goals. The duration of a cycle, also called cadence, typically varies between two and six months. Companies often run several in parallel, for example an annual strategy cycle and a quarterly cycle of three months.
The OKR cycle consists of three phases:
- Planning phase
- Execution phase
- Closing phase
The planning phase sets and deconflicts the OKRs
A cycle begins with the determination of the OKRs. Objectives and key results are as a rule aligned with the company's mission and defined in a goal-oriented manner. Beyond this, there are further options that can be drawn upon as reference points for the definition of OKRs, such as:
- Key Performance Indicators (KPI)
- OKRs of other colleagues
- Other long-term goal-settings
To avoid overlaps and duplications, the OKRs are also aligned and coordinated with those of other departments and teams.
The execution phase runs on check-ins
In the execution phase, the OKRs are put into practice and realised. Progress and development are measured and monitored. In addition, the current status and next steps are on the agenda in regular meetings. These so-called check-ins can take place every week, every two weeks, on a three-week cycle, or once a month. Ideally, these check-ins are integrated into already existing team routines.
The closing phase scores the cycle and feeds the next one
Once the execution phase is complete, the final scoring of the OKRs takes place on the basis of the progress achieved and the data collected, and the degree of goal achievement is determined. A retrospective also takes place to clarify why goals were not reached and what things can be improved in the next cycle. The insights gathered are documented and managed in a suitable tool and drawn upon for the planning of the next cycle.
Three advantages of OKRs that hold up in practice
John Doerr describes the condition the framework is built to produce:
"[…] truly transformational teams [departments, companies, organizations] combine their ambitions to their passion and to their purpose, and they develop a clear and compelling sense of why."
OKRs connect corporate strategy with measurable and focused goals
The first advantage is transparency, and the alignment that follows from it. OKRs are first established and defined in a planning phase.
This typically happens first in a top-down process, in which the company leadership together with the heads of the business units defines OKRs that are derived from the medium to long-term corporate strategy. This is followed by a further breakdown of the OKRs to the departments and teams of the respective business units.
Through feedback rounds, employees can then ideally contribute their own ideas to the process, which ultimately concludes with the finalisation of the OKRs.
The finalised OKRs are then implemented transparently. Several methods are available for this, including:
- a simply structured OKR list including an overview
- OKR-specific software
- a self-developed tool
What is ultimately important is that the set OKRs are accessible and visible to every employee at all times. Using this approach and structure, interfaces and coordination needs at all levels can be more easily identified. This in turn facilitates the uniform alignment of all business units and teams toward the common "big picture."
When all employees know what tasks and goals their colleagues in the company are working on, this can also lead to a healthy competitive culture with motivated employees and an increased level of performance.
OKRs make it defensible to say no
The application of the OKR method makes it easier for employees to think and work in a structured manner, thereby accelerating internal coordination processes. With clear and measurable goal specifications, every employee knows at all times where they stand. With regard to work structuring and organisation, OKRs provide support in the following ways, among others:
- Projects and tasks that contribute nothing to the agreed objectives are identified early.
- Tasks and behaviours associated with unnecessarily high time expenditure or disproportionately high costs are restructured or eliminated.
- A lack of willingness to make decisions is counteracted.
OKRs show in an objective manner how and for what purposes the resources of work and time are being used. This can make it easier for employees to prioritise tasks important for reaching the goals and to put aside or decline relatively unimportant tasks and additional work requests with a clear "no."
A shared, written understanding of the goals also shortens coordination between teams, because the argument about what matters has already happened.
OKRs move goal-setting out of the management layer
A key advantage of OKRs compared to numerous other management instruments is the comprehensive approach. Ideally, every employee working on strategic topics is actively involved in the process throughout the entire OKR cycle. A classic top-down structure in which management and superiors delegate work assignments downward is not the aim.
Rather, employees at every organisational level are inspired toward active, self-organised, and independently responsible participation. It is not managers and superiors who lead employees, but tasks and goals. With the help of a clear and simple shared language in the form of OKRs, employees develop a shared understanding of goals across team and departmental boundaries.
Ambitious and outcome-oriented goal-setting keeps motivation, commitment, and work performance at a high level. A constructively oriented error culture and regular feedback from different reference groups offer, as an overall package, development potential for every employee.
Disadvantages of OKRs: five failure modes, and all of them are human
The risks sit in what the framework asks of people: leaders who set goals in public, teams that carry responsibility for results, and a routine that has to hold for years. Where one of those is missing, OKRs cost more than they return.
A rushed introduction costs the framework its credibility
OKRs and the concept behind them are normally introduced comprehensively across the entire company. The introduction of the new management model therefore affects all employees, teams, and departments. Beyond this, OKRs influence the way of working, the organisation of work, and established process structures.
For the successful introduction and implementation of the OKR approach, a structured and step-by-step approach is therefore of paramount importance. A major problem in this context is frequently a coordinated transfer of knowledge.
If one wishes to avoid the workforce associating OKRs with disadvantages and risks from the outset, the appropriate specialists should be entrusted with the introduction and implementation of the concept from the very beginning. At the same time, it must be ensured that the organisation absorbs this knowledge and carries it into the teams.
Particularly at the beginning, the introduction of a new concept involves a high expenditure of time. Intensive training is recommended for the initial transfer of knowledge.
Agility reads as a threat to part of the workforce
People frequently resist change and prefer to hold on to what has proven itself in the past. This behavioural pattern will also be encountered among a portion of the workforce with regard to the introduction of OKRs.
Accordingly, an advantage of OKRs for some people can also be perceived as a disadvantage, even though this is precisely the reason why the concept is often introduced: agility. OKRs as a goal-oriented and communicative approach demand constant, active, and committed effort from employees.
Such agile approaches and models often initially require a corresponding cultural shift within the company before their implementation returns anything to the company.
In many cases, however, a lack of knowledge and missing information also play a decisive role in the rejection of new structures and processes.
OKRs need people who want to own outcomes
When employees reject independently responsible working and prefer structured, routine work processes along with hierarchical obedience and authoritative leadership, approaches such as OKRs will in principle have a difficult time.
The advantages of OKRs only come into effect when the company as a whole works in a goal-oriented manner. Goal-setting in general can sometimes be perceived as stressful and is partly associated with additional workload.
Leaders who do not use OKRs themselves end the experiment
For the lasting introduction of new concepts such as OKRs to have any prospect of success, it is particularly the leaders who must show conviction that the change is necessary. If leaders do not live up to their function and responsibility in the context of a fundamental change to the company's processes, employees will also initially approach new things with scepticism.
Leaders too often find it difficult to let go of previously proven structures, processes, and habits and to embrace new ways. It is therefore all the more important that the key figures of a company in particular develop the necessary understanding for a change and communicate what it is expected to deliver clearly and with conviction throughout the company. If this does not happen, or happens only insufficiently, the company in question experiences OKRs as a disadvantage, since the additional expenditure of work, resources, and time is not returned.
The OKR master role decides whether the discipline survives
The OKR master, who is responsible for the introduction process of the OKR method, also plays a key role with regard to the successful implementation of the approach. Integrating such a comprehensive concept requires a great deal of additional working time and instructing colleagues demands an elevated degree of patience.
At least in the initial period, OKR masters must bring an elevated degree of discipline and commitment in order to successfully establish OKRs as an operational strategy instrument within the company.
Regardless of the position of the OKR master, a lack of or steadily declining discipline in the application of the OKR method is one of the main reasons why OKRs can fail in the long term as an operational application in companies, or at least fail to bring the hoped-for OKR advantages.
Whether OKRs pay off is decided before the first cycle starts
Objectives and Key Results suit companies whose market moves faster than their planning cycle, and whose transformation asks structures and processes to change alongside the strategy. The framework carries a real cost: an introduction that takes months, knowledge transfer into every team, and a discipline that has to hold after the initial enthusiasm fades. Where the workforce is not convinced, that cost is not returned and a statically planned strategy would have been cheaper.
Three questions are worth asking of your own organisation:
- Can every team name the company goal their current OKR set contributes to, without looking it up?
- What work was stopped last quarter because it contributed to no objective?
- Does the leadership team's own OKR set exist, and can anyone in the company read it?
Unclear answers point at the introduction. A company that wants OKRs to hold beyond the first two cycles invests there, usually with an external partner who has run the method before.
The OKR questions we get asked most
What are the main advantages of OKRs?
Strategy becomes goals that can be measured inside a single cycle. Every team can see what every other team is committed to, which surfaces overlaps and dependencies early. And work that serves no objective becomes visible, which gives a team a documented basis for declining it.
What are the disadvantages of OKRs?
The recurring ones are organisational. The introduction absorbs months of working time and training. Employees who prefer routine work and clear instructions experience the shift to owned outcomes as a loss. Leaders who keep setting direction privately undermine the method, and where the OKR master's discipline slips, the cycle degrades into a reporting exercise.
How long is an OKR cycle?
Between two and six months. Many companies run two cadences at once: an annual strategy cycle that sets direction and a quarterly cycle of three months underneath it. Inside a cycle, check-ins run weekly, every two weeks, every three weeks or monthly, and they work best when attached to a team meeting that already exists.
How many objectives and key results should a team set?
Two to five objectives per cycle, each with two to four key results. Objectives are qualitative and answer what is to be achieved. Key results are numeric and answer how the degree of goal achievement is measured. Key results should not depend on each other, otherwise scoring one tells you little about the state of the objective.
Do OKRs work in every company?
No. The framework assumes employees will take responsibility for outcomes and that leaders will set their own goals visibly. In organisations built on hierarchical instruction and routine process work, both assumptions fail, and OKRs add coordination cost without adding direction. The decision to introduce them is a decision about how the company wants to be led.
