OKR, short for objectives and key results, is a lean business goal setting technique, aimed at steering alignment, engagement, and targeted execution around measurable goals.
It boils down to organizing your goals and priorities using one simple sentence:. As the company was undergoing business model change, Grove realized that he lacked engagement and support at the grassroots levels as individual employers did not fully understand the new business priorities. The introduction of the ORK system helped Grove secure buy-in from all staff and help individual workers direct their effort towards the key company goals. John Doerr was working along with Andy Grove at that time.
In the late s, Doerr introduced the OKR process to Google leadership and who still use the technique today:. Google OKR success propelled further spreading of this practice across Silicon Valley and well beyond it. To formalize both of these, you need to answer two questions:. Lastly, you have to bridge the gap between the stated goal and desired results.
OKRs, on the contrary, help the teams get a better sense of direction and focus on reaching the results that matter. Such targeted refocusing, in turn, translates to better performance and better business results.
Another study suggests that one sales team who started using OKRs saw an 8. Apart from the positive impact on bottom lines and communication, here are other benefits of OKR:. The corporate lingo has a lot of other funky acronyms, used in business planning. KPI, short for Key Performance Indicator, is a metric for measuring the success of ongoing activities that are already in place. OKR, on the other hand, also specifies the journey you need to take to nail that goal.
OKRs, on the contrary, have a rigid structure that emphasizes the measurement of progress at all times. Also, OKRs are often hierarchical and exist on multiple levels e. The SMART framework, on the contrary, is better suited for isolated goals and cannot be scaled to set relationships between different goals across the organization.
Balanced Scorecard Template by SlideModel. On the surface level, the two techniques are very similar. However, there are two important differences between OKR and a Balanced scorecard:. Your next goal is to scale the approach across your company from the top level to individual employees.
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