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In this blog post you can find the definition of OKR

OKR Explained Simply

Estimated reading time: 9 minutes
What actually is OKR?

Objectives & Key Results, or OKR, are no longer just used at Google. In recent years, this management method has become the standard in many companies. These include Netflix, mymuesli and Zalando, for example. More and more companies are setting themselves ambitious, qualitative goals (objectives) in short cycles and measuring their success with key results.

In general, OKRs enable greater focus and transparency across the various levels of an organisation.

But what are OKRs anyway? Where do they come from? And what are the success factors? We would like to answer these questions in this blog post.

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OKR - An agile management method based on objectives and key results that helps to ensure that a company focuses on the same important issues throughout the organisation.
John Doerr

OKR simply explained - the most important facts at a glance

According to John Doerr, OKR is an agile framework and operating system for modern organisations to implement strategy in today's VUCA world.

The OKR definition describes the framework as a collaborative methodology to create intrinsic motivation among employees and provide more focus and measurability in achieving goals. In addition, OKRs help to drive the organisation towards the vision and to achieve challenging and ambitious goals.

As the name suggests, the OKR framework contains objectives and key results, each of which is defined for a limited period of time (cycle).

The objectives describe what is to be achieved at the end of the cycle. They represent ambitious goals that are linked to larger, strategic priorities. They are typically inspiring and boldly formulated.

Key results, on the other hand, show how the objective is to be made measurable at the end. They are always time-bound and limited in number.

When we talk about an OKR set, we are talking about the combination of the objective, which answers the question of outcome and meaningfulness, and the 2-4 associated key results, which make the objective measurable and concretise the targeted fields of action.

OKR Roadmap.
Icon OKR goals

An OKR example

An exemplary OKR set for employee development in a company could look like this:

Objective: Employees are more satisfied and committed thanks to training opportunities and a budget for individual personal development.

  • Key Result 1: The number of employees who have participated in at least one of the training programmes offered increases from 90 to 120 employees.
  • Key Result 2: The number of employees who have used their budget for their individual personal development increases from 50% to 70%.
  • Key Result 3: The employee satisfaction rating increases from 7 to 9 rating points.

Objectives & key results in a nutshell

Generally speaking, the OKR sets are derived from the corporate vision and the specific corporate objectives and are redefined and reviewed before each cycle. This iterative process is known as the OKR cycle, which consists of various phases and events. It is important to note that each OKR cycle must be customised to the respective company in order to deliver the greatest possible added value.

  • Icon Objectives.

    Objectives

    • 3-5 objectives per area / department (less is more)
    • Objectives answer the question ‘What should be different after the cycle?’
    • Objectives are formulated in a motivating, memorable and ambitious way
    • Objectives are qualitative and contain no metrics
    • Objectives can be implemented under their own steam within the specified timeframe
    • Objectives are formulated as if the target state has already been achieved
  • Icon key results

    Key results

    • 2-4 key results per objective
    • Key results answer the question ‘How do we recognise that we have achieved the objective?’ and make the objective measurable
    • Key results are quantitatively measurable and contain metrics/figures
    • Key results have an outcome focus (what is the result?)
    • Key results are formulated SMART (i.e. specific, measurable, attractive, realistic and time-bound)
    • Key results are independent of each other and thus ideally make the objective measurable from different perspectives
the beginning of OKR
advantages of a OKR framework
Icon advantages of a OKR framework

The advantages of the OKR Framework

  • Focus: Thanks to the limited number of OKR sets per cycle, the OKR method helps you to focus on the important things.
  • Responsiveness: As an agile management tool, OKRs enable rapid reactions and reorganisation during the year.
  • Measurability: Successes are made measurable. Companies can recognise more quickly what is working and what is not. The focus is on the result (outcome instead of output). With OKR, it is not about what has been achieved, but about the result/added value of what has been achieved.
  • Innovation: OKR encourages people to think big and innovatively. If ambitious goals are set, there is room for new ideas and solutions.
  • Satisfaction: Employees are clear about the goals of their own work and know what is expected of them. This makes them more motivated and satisfied.
  • Transparency: OKRs create transparency. This avoids duplication of work, facilitates coordination and identifies synergies. Teams always know what others are currently working on. Communication between departments and employees is improved.

Success factors for the use of OKR

Mindset

If you want to introduce OKR, you don't just need sound theoretical knowledge. Rather, an agile mindset is required so that the principles of the methodology can be successfully anchored in the teams or even the company.

Less is more

The clear limitation to 3-5 OKR sets per area ensures a focus and prioritisation is necessary.

Common direction

OKRs build on each other and are derived from each other. As a result, the entire company moves in the direction of the corporate vision. The OKR sets are visualised in a linked manner to ensure transparency.

Transparency

A transparent presentation of the OKR can create synergies and avoid silo thinking. By regularly updating progress, it is possible to react quickly to deviations and problems.

Clear responsibilities

OKR sets have clearly assigned responsibilities in order to create transparency regarding responsibilities.

Do you have questions on this topic or are you interested in consulting services in the area of OKR?
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Sonja Neubauer - LEITWERK Consulting
Your contact person
Sonja Neubauer
+49 89 189 235 96
sonja.neubauer@leitwerk-consulting.com
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