The powerful goal-setting framework trusted by companies like Google & Adobe
In 1971 the first iconic computer-on-a-chip was invented by Ted Hoff, an employee at Intel, which subsequently led to Paul Allen and Bill Gates launching the computer revolution in 1975, making Intel a dominant force in the microprocessor market.
However merely 4 years later, the landscape transformed.
Brewing competition saw Intel’s 8086 being clouted by two competitive chips, namely the Motorola 68000 and Zilog’s Z8000.
Following a desperate & dire 8-page telex from their district Sales Manager, a blue ribbon task force convened to take on the competition, which gave birth to the single most legendary campaign of all time.
Operation Crush. A campaign to crush the competition.
At the core of the campaign Intel set one of the most daring objectives not only in the history of microprocessors but in the history of tech itself:
2000 Design Wins
Design wins were crucial agreements for clients to put the Intel 8086 chip within their appliances.
Within a year of them setting the objective, Intel registered 2500 design wins, beating their set goal by 25%, and as a result recapturing 85% of the 16-bit market, and set the tone to be the dominant micro-controller architecture within tens of billions of devices, appliances and computers for the decades to come.
How did they do it?
Intel’s management team had a trump card up their sleeve, a secret weapon that was able to lead them to total market dominance.
Objectives and Key Results (OKRs)
Operation Crush was a thoroughly cascaded set of OKR’s, that was directed from the top management but flourished because of the massive participation and input from the entire company. Intel declared great generalizations and translated them into actionable co-ordinated programs rallying their entire organization behind them.
Against a supercharged large and multi-faceted organization that knew exactly what they were aiming for, and the status of their goals every step of the way, Motorola did not stand a chance.
And all that would not have been possible without OKRs.
So what are OKR’s
And what makes them so damn great!
OKR is a simple yet powerful goal setting system that allows for agile, ongoing and most importantly aligned goal setting within organizations.
The framework of an OKR is straightforward
To achieve a certain Objective as measured by the following Key Results
An OKR has two main components:
An Objective — Where do you want to go
An inspiring and engaging qualitative description of what you wish to accomplish.
“Creating an awesome user experience”
“Dominating the mid-range computer component business”
“Ruling the Seven Kingdoms”
Key Results — How will you get there
Metrics that measure your progress towards the defined objective. Key results usually have to be quantitative and measurable.
An example of key results would be:
“Reduce page load speed to 1 second”
“Achieve 85% market share”
“Hatch three dragons”
Putting it together
Here is one of Intel’s corporate OKRs during Operation Crush:
Objective: Establish the 8086 as the highest performance 16-bit microprocessor family,
as measured by:
Thus as you can see the result is a clear understanding of what the objective is, and what would be required to accomplish it.
Why use OKRs
But of course, we wouldn’t want you to take our word about the awesomeness of OKR’s. Here is some empirical evidence.
Research has revealed that the use of Objectives and Key results significantly improved employee performance.
Sears Holdings a leading US-based retailer performed a study about goal management within 20,000 associates over a year.
These were the results:
No OKRs: No change in performance
Irregular OKR use: 3% increase in performance
Regular OKR use: 11.5% increase in performance!
If that wasn’t enough here is a real-life case:
In 2012 Adobe replaced stacked ranking, (employees ranked on a bell-curve based on performance), and replaced it with their system called “Check In”, where goals are agreed upon and reviewed on an ongoing basis by managers and by employees.
Following the shift to setting OKRs and moving into continuous performance management, Adobe’s revenues increased by 26%.
Benefits of OKRs
OKRs allow for more frequent and flexible goal setting. Thus goal cycles are much shorter than traditional annual/semi-annual performance planning, allowing companies to adapt and respond to changing circumstances.
OKRs are open to all company levels and hence allow people to align their goals towards a common objective, enabling mass cooperation.
This enables everyone within the organization to have a crystal clear understanding of how to ensure their accomplishments contribute to overall company goals.
Alignment to a collective objective ensures transparency within the organization. Allowing employees to see what their effort is cumulating into results in them having a sense of fellowship and mutualism.
A sense of unity within the organization is like adrenaline for employee engagement.
A clearly stipulated set of goals, disciplines efforts and initiatives and reduces any flux around what has to be done.
Given lucid directions, teams can then choose to achieve their results as they choose within the given timeframe. They no longer need to be micromanaged.
Jumping into the deep end
So now that we have the empirical evidence and the benefits of OKRs out of the way it’s time to jump into the deep end.
Setting amazing objectives
A great objective will meet the following 3 criteria.
Inspirational: Objectives that are bold and visionary, spur employees and organizations into action.
Uninspirational: Make 3000 space bases
Inspirational: Rule the galaxy
Achievable: Objectives that are too easy leave employees adrift and bored. At the same time, impossible objectives can demotivate employees to total inaction.
Too Easy: Climb out of bed
Too Difficult: Climb Mt. Everest
Just Right: Climb a small hill
Positive: No one likes negativity. Thus negative objectives demotivate people. So objectives have to always have a positive outlook.
Negative: Reduce errors to 10%
Positive: Achieve accuracy of 90%
So the sweet spot is to set an objective that is inspirational & positive while achievable.
Anatomy of killer key results
The basic parts of a key result are a target (e.g. improve employee engagement) and a timeframe (e.g. by the end of this month).
However, this can mislead people to relate key results to todos or checklists.
The best key results focus on achieved value, not on completed tasks.
A million completed tasks do not ensure addition of value and can misdirect employees to sacrifice the quality of work.
So don’t set task-based key results like:
Develop 3 landing pages
Launch 2 products
Create training program
Rather do set value-based key results such as:
Improve employee engagement from 70% to 90%
Achieve 30% conversion rate
Reduce Customer Acquisition cost to $20
Setting the right key results is essential to maintaining a company culture focused on successful outcomes rather than the number of checks on a todo list.
Turbocharging your team with OKRs
Now that we know how to set single OKR’s why stop here. Lets build a system to implement them within a team.
Within Up Your Game we follow a 3 step process, to set and adapt our OKRs.
SET — MEASURE — ASSESS — REPEAT
We’ve already looked into setting robust OKRs. Let’s look at how to measure them.
Measurement of an OKR should be as simplistic as OKRs themselves.
At Up Your Game we believe that OKR measurement should be real-time. So any or all key results can be measured whenever deemed necessary for different teams.
Our development team measure results everyday. Sales and marketing team does so every week. And our design team checks-in every other day.
We use our platform Up to measure and analyze our OKRs on a realtime basis.
However any tool with cloud access to multiple organizational members can be customized to serve as an OKR measurement tool.
The idea is to continuously measure key results so that performance towards their respective objective is always clear, and thus teams can adapt and respond faster.
While measurements show you the present, assessments help us plan the future.
Here are two simple key assessment metrics we use at our company:
Miss or Hit %: Are we going to miss or hit our target. If so by how much.
A simple code that alerts you of goals that might miss can be easily written using the following logic:
This is an effective filter for any KRs that need immediate attention when the objective deadline approaches.
Employee Sentiment: While the previous measure is a purely quantitative measure, it is important to assess the qualitative aspects surrounding the OKR, especially employee sentiment pertaining to its achievement.
Are employees feeling like they can achieve the goal, or do they feel like its a moonshot?
Do they like the team they are working with?
Do they feel engaged?
What obstacles do they face while trying to achieve the desired target?
A negative sentiment surrounding an OKR is a good indicator that the approach towards a goal needs to change.
Assessment of an OKR can help you restructure and revise your key result, to ensure that it is engaging and aligned well with your team.
Where do we go from here …
This was merely an introduction to OKR’s. You can learn about them further from any of the resources listed below at the end of the post.
However, nothing beats practice. Implementing OKRs is like learning how to swim. Theory can only teach you so much.
The true artistry (and fun) of aligned performance is in getting your hands dirty, and jumping off into the deep end.
So create OKRs for your team at work, for your family and for yourself.
Use them to crush your demons.