The method created in the 1970s by one of the founders of Intel is a simple, flexible and agile management model whose goal is to engage employees and elevate the productivity levels of the company. It began to spread among companies in 1999 and became known for being the method that supported the growth of Google, demonstrating that it could be used by both small businesses and large corporations. In the same year, the company had 40 people, and currently, it has more than 85,000.
OKRs consist of two main components: objectives, a concise statement of the desired direction of the company, taking into account the strategies, mission, and values of an organization; and Key Results, goals with a direct impact on the achievement of the objective if successfully attained.
Therefore, all employees have clarity about the goal to be achieved and the indicator that demonstrates its successful accomplishment. The methodology aligns individual executions in different areas with the overall goals of the company, directly impacting the increase in the performance of everyone.
Unlike other methods, OKRs are best applied in short-term planning, up to 3 to 4 months. They can be used complementarily to the strategic and annual planning of the organization since one of the main aspects to be considered for the elaboration of objectives and goals is to start from the strategic or annual planning of the organization.
Why Choose OKRs?
In addition to the clarity of goals through clear and measurable objectives, OKRs also help focus the company’s efforts and resources on the most important goals, increasing team efficiency.
Innovation and creativity are challenged through the methodology, as employees are encouraged to seek innovative solutions and experiment with different approaches to achieve the desired results.
OKRs require regular review, allowing the assessment of actions that worked or not, and the application of lessons learned in future cycles. This way, it will also be possible to identify learning opportunities and skills that can still be developed by the team.
Other benefits such as organizational alignment, transparency, and engagement, improvement in communication, increased responsibilities, and constant encouragement of a culture of improvement also deserve to be highlighted.
What is the difference between OKRs and other methodologies?
- The goals defined through the method are set for a shorter time, making the result more tangible and allowing corrections throughout the cycle.
- Key results are reported weekly, making it possible to anticipate the end of the quarter and recover to achieve the established goal. If unsuccessful, the next cycle can be used to implement new learnings.
- The tool prioritizes transparency, so everyone can see the company’s OKRs, and leaders and managers clearly address the company’s priorities and how they will unfold through objectives and key results.
- The data-driven culture is reinforced, as decisions are made based on data, through various analyses conducted during the period.
- The methodology measures the result and not the effort of tasks, as commonly used in traditional management methodologies. In other words, if you put a lot of effort into a task and still didn’t achieve your goal, it’s time to rethink the approach.
OKRs vs. KPIs
We’ve already talked about KPIs, key performance indicators, on our blog.
Among many differences, we can mention the main one that will assist you in differentiation.
Doerr’s OKR Formula
If you’re unsure about how to create OKRs and whether they will really work, just use John Doerr’s formula. John is considered one of the most successful technology investors, starting his career at Intel and continuing with investments in companies like Google and Amazon. His formula consists of:
“I will (objective) measured by (key result).”
For him, a good goal should list what will be achieved and how we will measure its accomplishment; that’s what makes the goal real. Without a way to measure, it’s just a wish.
For example:
“I will rebalance the company’s finances, reducing debt with banks to less than R$2 million in 3 months.”
Tips for Implementing OKRs in Practice:
– Establish new OKRs every 3 months.
– Define a maximum of 5 key results per objective.
– Assign responsibilities for each objective.
– Communicate the OKRs throughout the entire company.
– If you have never used the methodology, consider starting with a single OKR and a shorter duration than the methodology suggests.
– Remember to celebrate small victories with your team.
– Focus on goals and results; completing tasks does not guarantee success.
– Consider that the tasks proposed to achieve key results are hypotheses or attempts; focusing only on these activities can give a false sense of mission accomplished.
– The goals and objectives of different departments should never conflict with the goals and objectives of the organization or other departments.
Author:
Tainá Klein
Project Consultant in the Projects Area at Interact Solutions.
Bianca Wermann
Journalist, Communication and Marketing Analyst at Interact.