Pleasure and sorrows of OKRs

OKR stands for Objective and Key Results was introduced in the 70s by Andy Grove, cofounder at Intel. OKRs are similar to its cousins KPIs (Key Performance Indicators), however we will explore the Key differences in short. OKRs was popularized in the 90s by Google and other Silicon Valley companies like Zynga. A precursor model of OKRs is the MBO (Management by Objectives) created by Peter Drucker in the 50s.

To illustrate what an OKR is, consider the following example: You are driving a car. You have the Waze app in your mobile and it is showing you some information about your trip. In addition, the car is traditionally showing you more information. Your objective is to move from point A to point B, so what information can be considered an OKR and which one a KPI?

Let’s think what is related to your objective and telling you if you are on track or not. Potentially arriving time, distance to arrive and time left are numbers directly related to your objective and could be considered OKRs. On the other hand, velocity and fuel gauge could be KPIs and not OKRs; They are also important considering you don’t want to run out of gas or exceed the speed limit but they will not directly tell how well you are moving to your goal.

The conclusion is that an OKR is a traditional KPI except it’s pointing to an objective. However the result you measure must be connected with a higher purpose, something that matters for the organization or the team.

At an organizational level I love to use a strategic planning tool named Hoshin Plan to start from the company’s vision until the OKRs so that I can increase the possibilities that teams are not going to pursue empty numbers. A good practice in our current dynamic environment is to review and adapt the strategy every three months. Following this idea we could have new OKRs every quarter but let’s leave that in-depth discussion for another post.

The ideal world should show us real time the OKRs status. However, it is not always possible as it depends of many factors. In some environments, a second could cost a human live or a week could be just enough. Just check what makes sense for your company or teams and establish a roadmap to automate as much as you can since teams often complain about time spent filling out reports.

In any case, whether you are using the OKRs concept or the KPIs, ask yourself and your teams if you are measuring stuff that matters.

Summarizing, I want to share a list of pleasures and sorrows in using OKRs. Please add comments complementing them according to your experience.

Pleasures

Sorrows

References

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