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Objectives and Key Results (OKR) has proven to be a success in Silicon Valley and blown proper air into the dusty management floors of small and large companies. “If Google is so successful with it, then there must be something about it,”many thought. And there’s something about it! This Crash Course gives you instructions on how this method can help you make your business a success.
What is so special about Objectives and Key Results?
Objectives and Key Results is a management management method in which goals are formulated and implemented in accordance with this formulation. The special feature of Objective Key Results is that management requirements are not only dictated “from above” (top-down) and then implemented by the workforce. At OKR, targets and goals are set by management together with employees and teams (bottom-up). For example, the OKR method combines top-down specifications through managementwith bottom-up planning by teams .
Objectives and Key Results is a so-called agile leadership method and therefore ideal if you want to grow quickly with your company or perform a rapid transformation, for example towards digitization.
OKR makes it easier for you to focus on common goals while promoting the autonomy of your employees. These can be involved in the development of these goals and jointly develop goals in teams.
Joint coordination, a high degree of transparency and increased motivation of the employees are the side effects that make this so attractive as a modern management method. Thinking instead of consequences, lateral thinking instead of a spirit of subjectness!
And there are, of course, a few positive side effects: conflicts are defused or do not arise in the first place. The neue culture of cooperation also promotes cooperation between different departments of your company.
The tech giants’ “miracle weapon”
Objectives and Key Results was developed by Intel in the United States in the 1970s. According to many observers, OKRs have made a significant contribution to modernizing the sluggish chipmaker and getting it back on the fast track from the descending branch. Google consistently implemented the method in 1999 and became one of the first large companies to succeed with OKR. The search engine giant has become successful with Objective Key Results. The method is considered one of the keys to the success of the tech giant – you can do that with your company too! Objectives and Key Results has received so much attention that the Handelsblatt has even described it as a “miracle weapon of modern leaders”.
How does Objectives and Key Results work? A Small Crash Course
Unlike traditional management methods (see also performance management)where management formulates goals that employees have to meet, OKR does not work strictly “from top to bottom”. OKRs also work (at least to a good extent) in the other direction: from bottom to top. Employees are encouraged to bring their own ideas and visions to the company’s management, rather than just waiting for what is ordered from above. This creates new, radical transparency and a much stronger identification of employees with their company and its goals. That is the unbeatable advantage of this method! OKR, by the way, works best when it comes to developing a business; on the other hand, the method is not so well suited for controlling well-established processes.
The principle is to develop visions together, instead of letting employees wait for commands “from above”. This method is based on the interaction of objectives and results (key results). AnObjective is an overarching goal that motivates employees and teams to deliver measurable results, the key results. It is important that the key results are fact-based, number-based and measurable. The objectives, on the other hand, are visions, and as is customary with visions, they can – and should! – be courageous and forward-looking. With the objectives, the management sets the direction, tells where to go. The Objectives have an inspiration. They inspire concrete results, the key results.
Key results, on the other hand, are not cloudy at all, but very concrete. The key results are intended to contribute concretely to the achievement of the objectives, therefore they must also contain figures – according to one of the golden rules of this method. The key results must be measurable, quantizable. Facts in response to visions!
What is the goal and how is it achieved?
To put it simply, objectives say WHAT is to be achieved, Key Results say HOW it should be achieved. Objectives are the outcome, while the key results are output. Objectives and key results are concretely linked, whereby on an objective always several (usually 2-4) key results come. These results are reviewed on a quarterly basis instead of the usual annual, resulting in much more agile planning than the usual annual steps. In addition, the entire process with all results is visible to all parties involved. This radical transparency is an important component of the method. When everyone is asked to think along, everyone should see what comes out of it.
However, the result does not have to be 100 percent achievement of the objectives. On the contrary, the staunch advocates of this method even say that goals achieved 100 percent were not ambitious enough. Therefore, a target achievement of 70-90 percent is targeted
So what is the big difference between this method and traditional management methods? To put it simply, OKR doesn’t tell your people what to DO, but what to ACHIEVE. Your people then tell them what they’re going to do to achieve your goals. Because they know best what to do. In this way, you release creativity that otherwise sinks under the convenient motto “We do everything as we always have always done”.
The Objective says: Where do we want to go? For example: “We want to increase our sales in the B2C sector.” The key results tell us how to get there. For example: “We invested XY Euros in POS advertising this quarter and were thus able to increase brand awareness by XY percent.”
Or “We placed our product for the first time at the retail chain XY with XY Shops and thus achieved XY Euro sales in the last quarter.”
In this way, a structured process for achieving a specific goal is defined, rather than setting a roadmap through management that employees must follow.
However, there are also a few angling, which should not be concealed in this manual. Thus, the introduction of OKR must not lead to pressure on employees, nor must it be seen as a control tool. This method is intended to release creative energy and not create a bad mood!
What Google benefits is also good for your company!
Try the OKR method! Google has grown into one of Silicon Valley’s great giants with this method, cultivating democratic methods and employee participation.
Since the OKR method is basically independent of the size of the company, it can be used in almost any company and lead to new successes with a new coexistence.