All about OKR

OKR (Objectives & Key Results) is a well-known goal management framework that helps you achieve the goals of your organization. It systematically translates your objectives to 3-5 measurable results, ensuring that these objectives are actually achieved. On this page, we’ll answer all frequently asked questions about this method.

Index

OKR Pyramid

What is OKR?

OKR is fundamentally a method to set and achieve meaningful goals. With OKR you systematically link your goals to measurable results. This way, it is clear to everyone how the objective is progressing and when it has been achieved. With OKR, you create direction and alignment within your organization. The aim is to make sure that everyone knows which direction the organization is headed, and where the priorities lie.

What does OKR stand for?

OKR stands for Objectives and Key Results.

OKR’s Objectives are the long-term goals that are based on your vision and mission. They are descriptions of what you want to achieve. They should be short, ambitious, easy to understand and they should set a clear direction. If your Objective doesn’t motivate and challenge the team, it’s not a good Objective.

OKR’s Key Results are the measurements of the Objectives. If you get a Key Result, it must contribute to one of the Objectives. OKR’s Key Results provide an indication of the Objective’s progress. They should be SMART: specific, measurable, achievable, relevant and time-bound. They can also be defined as ‘action results’, i.e. something that needs to be done (not measured).

OGSM Dashboard

How did OKR originate?

Like OGSM, OKR originated from Management by Objectives. While Management by Objectives was conceived by Peter Drucker, Andrew Grove first spoke about OKR in his book High Output Management. When Andrew Grove founded his own company ‘Intel’, he also introduced this way of goal management in his own company. At Intel, John Doerr got to know and work with the method. John Doerr eventually introduced this method to Google, and nowadays the OKR method is used by many large companies such as Spotify and Netflix.

Why use OKR?

OKR is a proven method that is very easy to master and offers quick benefits to anyone who needs to set and reach goals as part of their work. Because it helps you translate your organization’s vision and mission into measurable goals, using OKR makes it easier for people to understand what their work is contributing to. However, it should also be pointed out that OKR is a more restrictive strategic method than something like OGSM, which expands the framework with Strategies and leading indicators.

OKR vs OGSM

OGSM schema including OKR

How does OKR compare to OGSM?

You may have noticed that OKR is very similar to other popular management frameworks, such as OGSM. This is because both methods stem from Management by Objectives.

To briefly summarize the difference, you could say that OKR is a simplified, ‘basic’ version of Management by Objectives, while OGSM is an expanded, more in-depth version of the same.

While OKR is a great tool to reach goals, OGSM really helps you through the steps of strategic thinking. OGSM adds other layers to the strategic plan, including:

  • The ‘what-by-how’ formula, helping set clear strategic priorities and making choices explicit;
  • Strategies that cover various dimensions of a good strategic plan (customer, processes, innovation, etc.) making it much clearer how your organization plays to its key strengths and challenges.
  • Leading indicators, helping you predict outcomes and not only look back on results to see whether the objective has been achieved.

Want to know more about OGSM? We can tell you more about it here.

An example of OKR in an OGSM-format

This example OGSM plan is taken from the book ‘The 1-page business strategy‘. You’ll see that between the Objective, the Goals and the Action Plan, all elements are covered, while OGSM also adds additional key information in the Strategies and Dashboard columns. On the basis of this example, you can see what a fully developed OGSM plan looks like in OGSM Software. All Actions and Measures should be linked to the goals. This ensures, just like OKR, that everyone is doing the right things to achieve the Objective.

Manage OKR in OGSM Software

Do you already use OKR in your organization or are you planning to use it? OGSM Software can help you with the daily implementation and execution of the OKR. The software provides a concrete and clear overview of your OKR on one screen. Your entire team or department can use the software to view the OKR and actively contribute to it. Furthermore, the software provides real-time progress updates on key results, so you can see issues that arise and take action before they escalate.

How do I manage OKR in OGSM Software?

Because OKR and OGSM are fairly similar and OKR can be viewed as a simplified version of OGSM, OGSM Software lends itself perfectly for managing OKR. You enter the objectives of OKR in the ‘Goals’ field, you enter the key results in ‘Measures’ dashboard and the ‘Actions’ column. And voila! Your OKR can now be tracked to perfection.

Taking your OKR to the next level

Have you uploaded your OKR to OGSM Software? Then you may now take your OKR to a higher level by translating it into an OGSM. Add a (main) Objective, determine how you are going to achieve your goals (Strategies) and apply the Goal-by-Doing formula. For more information on how to fill an OGSM, click below.

Frequently asked questions about OKR

OKR is a simple framework for setting and achieving goals for an organization.

OKR is short for Objectives and Key Results.

OKR is a proven method used by organisations around the world. It’s especially useful for teams or departments with a relatively straightforward path to their objective.

OKR’s Objectives are the long-term goals that are based on your vision and mission.

OKR’s Key Results are the quantitative translations of the Objectives into SMART goals or actions that need to be completed.

OKR can be seen as a simpler version of OGSM. OKR’s Objectives, Key Results and Initiatives correspond with OGSM’s Goal Headers, Goals and Actions respectively. Because OGSM supports the entire strategic thinking process by adding Strategies and (especially leading) KPIs, some organizations prefer this expanded framework to work on dynamic and wide-ranging strategic challenges.