As a business leader, you know that setting goals is a key part of succeeding in business. It provides direction and a common purpose for your team.
There are indeed many different frameworks you can use. We’re going to look at one of those today.
We’re placing a microscope on Google and how it uses OKRs to set its goals. You might think that, hey, it’s Google, the biggest company in the world – we can’t set goals like them.
But bear in mind that Google has been using OKRs back before they were Google.
What are Objectives & Key Results (OKRs)
OKRs refers to Objectives and Key Results. It was first developed at Intel, but Google adopted it from the get-go in 1999.
You first need to set up an Objective i.e. what you want to accomplish on a high level. This should be ambitious and make you a little uncomfortable.
You then have to decide on quantifiable Key Results that will help you to achieve that objective.
OKRs are graded from a scale of 0 to 1. The idea here is not to achieve 1.0 for every key result. In fact, if you did, then you probably weren’t ambitious enough. You are expected to aim for 0.6 – 0.7. Any scores below that, then you need to look at what you’re doing wrong.
Low grades shouldn’t be punished, however. They should be used to inform the next quarter’s OKRs.
OKRs are set at various levels – company, department and personal OKRs.
OKRs are Public
At Google, OKRs are public. Larry and Sergei have OKRs that anyone from the company can access. This keeps everyone accountable and facilitates communication. For example, if you have a new product and you want to promote it on YouTube, you look at the OKRs for the YouTube team to better pitch your idea to them.
OKRs at Google
At Google, there is one yearly objective and quarterly ones. Each employee has four to six OKRs per quarter to keep it manageable.
You can check the OKRs for Rick Klau, the person who was in charge of Blogspot, below. At the time, Blogspot was under pressure from newer competitors such as Tumblr and they needed to improve its presence.
Here’s another one:
At the end of each quarter, you grade your own performance on each key result.
The 0.7 for the Objective is simply an average of the Key Results underneath it.
The goal of this is to provide feedback to the company or team that owns these OKRs and it is far less important to get the grading right to the last decimal point.
According to Rick Klau,
Grades don’t matter except as directional indication of how you’re doing. If you’re spending more than a few minutes at the end of a quarter summarising your grades, then you’re doing something wrong. The work should go into delivering on the OKRs, not grading them.
Here’s something that you might not expect – OKRs are not used when determining promotions or for employee evaluations. These are independent from OKRs. OKRs are used to determine how each employee contributes to the company’s goals.
If you have an hour, you can watch this presentation by Rick Klau when he was at Google.
It gives an interesting insight on the internal workings of the search giant.