OKR (Objectives and Key Results)

OKR is a popular methodology for goal setting and performance management, used by companies, teams, and even individuals to align their ambitious goals with measurable results.

In simple terms: OKR helps you define WHERE you want to go (Objective) and HOW you'll know you've gotten there (Key Results).

The methodology became widely known thanks to investor John Doerr from Kleiner Perkins, who implemented it at Google in 1999 when the company was still in its early stages. Today, Google, Amazon, Microsoft, LinkedIn, and many other world-class companies use it.

Breaking down OKR into two parts:

1. Objective (Goal)

What is it? An ambitious, qualitative, and inspiring declaration of what you want to achieve.

Its purpose is to motivate and focus the team. It should be short, memorable, and motivating.

Example:

• Bad Objective: "Make the product better." (Too vague, not inspiring)
• Good Objective: "Create an unforgettable user experience that customers love."

2. Key Results (Key Results)

What are they? A specific, quantitative measure used to track the achievement of the Objective.

Their purpose is to be measurable and unambiguous. They define the success of the goal. You usually have 2-5 Key Results for each Objective.

Example of Key Results for the above Objective:

• "Increase Net Promoter Score (NPS) from 30 to 50."
• "Improve page loading speed by 20%."
• "Achieve user rating of 4.7+ stars in App Store."

Core principles and characteristics of OKR:

• Ambition and stretch (Stretch Goals): OKRs should be ambitious. The goal is not to achieve them 100%, but around 70-80%. If you always achieve them 100%, you're probably not ambitious enough. This stimulates innovation and stepping out of the comfort zone.
• Transparency: OKRs in the organization are public and visible to everyone. This creates accountability, alignment, and helps everyone understand others' contributions.
• Short cycles: Usually set quarterly. This allows companies to be flexible and quickly adapt to changing market conditions.
• Level separation: The company has its high-level OKRs, departments and teams have theirs, which are connected and contribute to achieving corporate goals.
• Evaluation at the end of the cycle: At the end of the period (e.g., quarter), the achievement of each Key Result is evaluated, usually on a scale from 0.0 to 1.0 (where 1.0 means 100% achieved result).

Example of OKR in a marketing team:

• Objective: Become the leading source of information in our industry.
• Key Result 1: Publish 15 new in-depth blog articles on key topics for us.
• Key Result 2: Increase organic traffic from search engines by 40%.
• Key Result 3: Generate 5000 new subscriptions for the weekly newsletter.

Difference between OKR and KPI (Key Performance Indicators)

They are often confused, but have different roles:

• KPI (Key Performance Indicator): These are metrics for daily business that show the health and effectiveness of core operations. They are constant. For example: Monthly Recurring Revenue (MRR), Customer Churn Rate, Customer Acquisition Cost (CAC).
• OKR: This is a framework for change. It focuses on achieving specific, ambitious goals for a certain period of time.

You can use KPIs within your OKRs. For example, if the KPI for customer satisfaction (Churn Rate) is poor, you might set an OKR goal to improve it.

Benefits of using OKR:

• Focus: Forces you to concentrate on the most important things.
• Alignment: Unites the goals of departments and teams with the company's overall vision.
• Transparency: Everyone knows what's happening and how they can contribute.
• Motivation and engagement: Gives the team meaning and clear direction.

Conclusion:

OKR is a powerful tool not only for performance management but also for creating a culture of transparency, collaboration, and ambition. It helps organizations turn their strategic visions into concrete, measurable actions.