What are OKRs? An intro for startups (Part 1)

We'll skip the blablabla about OKRs being used by many leading companies. OKRs are, actually, nothing new. It's an acronym for Objectives and Key Results, something used for more than half a century in most American companies, with a marketing and implementation spin. Objectives are goals (and I will argue, goals like your typical SMART ones). Key Results are some sort of break-down of individual goals. Let’s use an example to illustrate our definition:

 

Objective

  • Learn how to cook for a small dinner party by September 1st

Key Results

  • Buy and read “The 4-Hour Chef” by Tim Ferriss by June
  • Enroll at a cooking 101 course at the local community center by July
  • Cook dinner for parents and siblings by August 15th
  • Ace cooking knife work by September 1st

 

As you can see, the Objective is a bold goal (since I’ve never cooked before), specific (for a small dinner party), measurable (cooking for a small dinner party is a very palpable, measurable goal), time bound (by September 1st), but still achievable (as opposed to opening a restaurant and earning 3 Michelin stars by September, or cooking for a 100-person dinner party by September, which are too bold, and basically unachievable, in such a short time frame).

I’ve used Andy Grove’s approach of Key-Results breakdown: using KRs as milestones for goal achievement. There are other possible approaches. Some people defend that Objectives have to be qualitative, whereas Key-Results have to be quantitative and time-bound[1]:

 

Objective

  • Learn how to cook the basics

Key Results

  • Learn to roast, grill, and bake whole chicken and tenderloin (in rare, medium, and well done internal aspects) by September 1st
  • Chop an onion (Brunoise) and a Carrot (Julienne) with 90% homogeneity in less than 3 minutes (sounds silly, sorry) by September 1st
  • Learn and execute three sides’ recipes to go with the chicken and tenderloin alongside cooking the meats (for coordination and timing purposes) by September 1st

 

As you can see, they work very similarly. In the milestones approach, Key Results are like cities you will drive by driving from Miami to Orlando. The second approach has a less chronological aspect to it, but works in a similar fashion.

Another final way to view is through a whole/parts approach. I know these are very nuanced differences, but I just want to make sure you understand several aspects of the craft of OKRs:

 

Objective

  • Build my website by the end of the month

Key Results

  • Contract UI/UX design with freelance designer through Upwork
  • Buy domain address and purchase hosting plan on Bluehost or Godaddy
  • Write HTML/CSS code with designer’s inputs
  • Write Javascript interactivity code with the help of Codecademy course
  • Upload everything with a week left for beta testing

Most of the literature available out there about OKRs doesn’t help eager professionals to learn how to implement them. One of the leading OKR SaaS provider cites the following example: “Put a man on the moon by the end of next decade” as an example of an Objective. I know, I know. It’s figurative. But it’s also confusing. That’s clearly not an Objective for OKR purposes. It’s not something achievable in a 3-month, or even 1-year cycle. It’s more of a multi-year company-side Objective[1].

 

To help achieve this understanding goal, I would kindly ask you to limit your objectives to the cycle length you prefer to adopt. The longest the cycle (i.e., more than six months), the more I would encourage you to face Key Results as chronological milestones to reach those goals. If you use shorter cycles (from one to six months) you can choose if you want to use KRs as milestones or as objective components.

 

Four different approaches to understanding OKR

Table 1: Four different approaches to understanding OKRs

If you'd care to see how OKRs unfold down the organization (for those top-down goals of yours) have a look here.

 

Questions to think about (about which we'll be posting soon): 

  1. Sould OKRs be set top-down or bottom-up?
  2. Should OKRs be taken into account on my performance management mix? If yes, how?
  3. How can I link OKRs to the longer-term vision of the company?

 


Footnotes:

[1] Again, a lot of marketing here. Some people say SMART goals are too 90s for current people management practices, but they're fine. Keep using the SMART acronym and you'll be fine.

[2] We’ll get to those very bold, long-term goals in a second, when I introduce you to the concept of a Dream, that’ll turn OKRs into DOKRs.

Photo credit: Wilson Lam on Flickr