With the changing dynamics of the market, the success of any business heavily depends on its capability of execution ideas instead of only creating one. To do that effectively, goal setting is the best way to keep things on track. It helps the organization to concentrate on the top goals that matter the most to the business instead of pursuing goals that are secondary to the business at that span of time.
Setting goals make teams accountable for their performance because they know what, when, and how to accomplish goals. It enables them to link their goals with organization goals, as they are aware of the importance of their contributions and the impact it would have on the success of the business.
What is OKRs According to John Doerr?
John Doer is a renowned American investor, and venture capitalist at Kleiner Perkins. Before joining Kleiner Perkins in 1989, he provided funding to many tech companies including Amazon, Twitter, and Google.
According to John Doerr, OKRs is a management methodology that enables organizations to concentrate their efforts on their key issues.
He explained that objectives are something that you want to achieve. They are important, concrete, action-oriented and encouraging in nature. When created and deployed, they can work as a vaccine for fuzzy thinking and execution.
He defines that key results are the benchmarks that are used to monitor how we get to our objectives. Effective KRs are not only time-bound and specific but also measurable and verifiable.
By implementing an OKR strategy, either you meet all your key results successfully or you will be unable to meet them. There is nothing that comes in between them.
When the designated period of an OKRs- that is normally a quarter- ends, you can see the progress of towards your key results. If all these key results are accomplished successfully that are linked with that objective then it is considered successful else; the OKRs were designed poorly, he explained.
How John Doerr Help Google with OKRs?
John Doerr met with the startup founders in 1999 where he offered them funding of $12.5 million. He saw that Larry Page and Sergey Brin had good technology and entrepreneurial mind but they lack the ability to make decisions about prioritizing tasks to keep things on track.
Seeing all these troubles, Doerr offered them the concept of OKRs (Objectives and Key Results). He saw this concept first at Intel in 1970, where he used to work as an engineer.
Doerr explained to them that when Intel was transitioning from memory to microprocessor, they were looking for a way to help their employees stay focused on some set of priorities to manage this transition successfully. With OKRs, they managed to execute those priorities effectively. He said that OKRs are a collective goal-setting protocol for businesses, teams, and individuals that can chart them to the highest level of success.
When he discussed the idea of OKRs with Larry and Sergey, they immediately realized the value of having a quarterly set of priorities for their organization. It took them around two quarters to figure out how they can write their own personal OKRs and Google corporate OKRs each quarter.
How Google Implemented OKRs Successfully Compared to Other Companies?
One major aspect that differentiates Google from other organizations is its goal-setting process. Google firmly believes that when it comes to goal-setting OKRs methodology is undoubtedly the best way to claim success. Not only Larry Page was committed to OKR but his entire team was in accord with the idea of implementing OKRs.
When an organization decides to implement the OKR framework to guide its business processes, it is essential that its employees should be educated about the methodology. It is usually the responsibility of somebody from the upper management - COO or HR Manager - to enlighten the employees about the new course of action. Also, the company should make it a part of their everyday culture so that it is visible in the company.
In the case of Google, it was done with perfection. Their leadership not only showed interest in this framework but also ensured that it fits into their culture as well.
At Google, employees are given around 4-6 OKRs in a quarter. They also have other team-level OKRs as well. They work together achieving these OKRs so that their business can achieve all the targets collectively.
Measuring OKRs at Google is also a trouble-free process. At the end of every quarter, employees at Google grade their key results with the help of a specific set of scales. According to that scale, if an employee achieves a grade between 0.6 or 0.7 then it will be considered successful on the other hand, if an employee receives a score of 0.4, it shows that the employee needs to see what’s going wrong and adjust the existing process.
OKRs Grading Criteria at Google
Google uses outstanding grading criteria to see the performance of their OKRs. They grade OKRs on a scale of 0.0 to 1.0. If an OKRs are graded 1.0, then it means that the objective is completely accomplished. All the key results associated with the objective are graded separately via a rough average.
Key Parameters While Grading OKRs
1 – OKRs’ Sweet Spot
According to Google OKRs criteria, if OKRs grading is between 0.6 to 0.7, then it is considered as the sweet spot for the OKRs. Anything below that means that the organization is not accomplishing enough, on the other hand, scoring higher means that the goals are not aspiring enough.
2 – OKRs Doesn’t Mean Performance Evaluation
OKRs doesn’t define the performance criteria of an individual employee at Google. It is only considered as a summary of what an individual has achieved in a specified time and reflects his contribution towards the organizational OKRs.
3 – Organizational Goals Are Shared Publicly
At Google, organizational goals are graded and shared every quarter and year.
4 – Check-in Throughout the Quarter
Before setting a final grade, a mid-quarter check-in is done to help individuals and teams get an idea regarding where they stand.
Stretch Goals at Google
Google also practices stretch goals. These goals are beyond the threshold of its employees and are usually unachievable. The creation of stretch goals is usually tricky and often considered as a setup for failing teams. The intention of setting these goals is to create an exciting working environment and even if you fail to achieve these goals, you can still get outstanding results.
Google defines that the success threshold of these goals is 70%, which means that if 70 percent of goals are achieved from the list, it will be considered as a success. These sorts of goals are quite helpful to achieve noteworthy success in the long term.
An Actual Example of OKRs at Google
One of the great examples to see how OKRs are utilized at Google is from Klau’s OKRs.
Objective: Improve Blogger’s Reputation
Key Result 1: Speak at three different occasions to establish the blogger’s leadership in the industry.
Key Result 2: Organize Blogger’s 10th anniversary with PR efforts
Key Results 3: Contact with blogger users individually
Key Result 4: Setup Blogger on Twitter and update product-related discussion individually
How OKRs Helped Google
Google is one of the largest multinational technology companies in the world with tons of technology products and services. It was ranked as number one for six years in a row on the list of “Best Companies to work.” One of the key reasons for its success is the use of OKRs along with good leadership. It is still a part of Google’s daily life because it helps them create and achieve all their objectives in the best way.