Thomas Edison once said, "Vision without execution is hallucination," but connecting a company's vision to an executable plan remains one of the biggest challenges for any growing startup. In the 1970s, Andy Grove, Intel's CEO, wanted to tackle this disconnect. He built a framework to answer two very important questions: Where do I want to go? How will I know when I'm there? This was the genesis of OKRs--objectives and key results. The intention is to build a better way for teams to connect their objectives to their vision and to constantly monitor their progress.
At the time that Grove was implementing OKRs at Intel, the soon-to-be-famous venture capitalist John Doerr was on Intel's sales team and got a first-hand lesson from him. Doerr greatly admired Grove and called him "one of the greatest managers of his, or any other, era." In the 1980s, Doerr joined Kleiner Perkins and began investing in high fidelity startups. He brought along a slide deck from his time at Intel that taught the OKR system to encourage founders to properly set and track goals. Doerr believed the secret to success was setting the right goals that aligned with a lofty vision. In 1999, he brought OKRs to two of their most famous adopters, Sergey Brin and Larry Page, the co-founders of Google. Because of Doerr, Google began using OKRs, a practice that continues to the present day.
What are OKRs?
Objectives are what you and your team want to accomplish. The key results describe how you will measure your success in accomplishing these goals.
To put the concept into a basic structure:
1. Objectives should be bold and aspirational. Each set of OKRs should have only three to five objectives.
2. The key results are three to five measurable outcomes of these objectives. Key results should be aggressive and aspirational. It's not the sum total of tasks, but rather a translation of what needs to be done for the company if it is going to become a viable and self-sustaining enterprise.
Setting the right goals
One of the most contrarian components of the OKR framework is the notion of ambitious key results. Companies often adopt the idea of OKRs and then quickly regress to establishing key results that align closer to forecasts (although Doerr does mention it is fine to utilize sales quotas). In Doerr's book Measure What Matters, he makes a point of clarifying that it is fine not to always hit every goal. The best OKRs stretch your capabilities without snapping your team. It is because the goals are aspirational that they are decoupled from compensation and promotion decisions. This promotes the risk-taking needed to achieve your vision.
Another problem I often see with establishing OKRs is that companies neglect to establish the framework at the team and individual levels. This is one of the most powerful components, in my opinion. Each individual's quarterly objectives and key results directly correlate to their team's and the company's goals. This helps build transparency so every team player understands how their efforts impact the company's growth.
How to track OKRs?
With the recent growth of companies adopting OKRs to track their goals, new tools have emerged to help keep your team organized. The reality is you can start with something as simple as Google Sheets or Docs, but as you progress there are a lot of benefits to leveraging tools built to help you track progress. Some people-management platforms like Lattice now offer OKR tracking, but recently I have become most impressed with some of the new players that were conceived to solve this specific problem.
One of the fastest-growing entrants is Ally.io, which is a new SaaS platform that was built to solve this very problem of goal setting and tracking within growing companies. I also really appreciate how Ally.io integrates with HRIS (Human Resources Information Systems), and, more important, with tools that my team uses every day, like Slack, Hubspot, or Asana to keep themselves constantly on track in a lightweight manner.
Properly setting goals that are tied to your company's vision is necessary for success, but the real key is having the ability to track and monitor progress. Visibility into departments' trends can enable you to steer clear of disasters, and be better prepared as a team to reach your vision.