OKR stands for Objective and Key Results.

OKR – Objectives and Key Results is a goal-setting method and a goal management system – at the same time a strategy implementation method and thus a strategy execution tool – as well as a management system for goal-oriented and modern employee management.

It is a framework for setting objectives and measuring keyresults– and at the same time a critical approach and continuous improvement process.

It is based on Management by Objectives, Balanced Score Cards and Hoshin Kanri – some also refer to it as a further development of the aforementioned methods. Find out more about the OKR method here.

An objective is an inspiring, qualitative and ambitious goal – and describes WHAT needs to be achieved.

Objectives provide direction and describe the next stage in implementing or achieving the vision.

They answer the question “Where do I want to go” or “Where do I need to go?”.

Objectives are:

A key result is a quantitative key result – clearly stating whether a goal has been achieved – and describes HOW we get to the goal, i.e. HOW I achieve my objective.

Key results measure progress towards a goal (objective).

They answer the question “How do I know that I will get there?” or “What do I have to do to get there and how can I measure it?”.

A key result increases the probability that the objective will be achieved – but it cannot be used to measure whether we were ultimately successful or not.

Key results are:

An OKR set consists of an objective and 2 to max. 4 to 5 associated key results, the most relevant success drivers, i.e. the results with the greatest effect on target achievement

An OKR set has only one person responsible and accountable.

An optimal OKR set contains independent key results, i.e. they do not influence each other and do not build on each other or depend on each other over time.

The Key Results describe the results using the MECE method (Mutually Exclusive and Collectively Exhaustive), i.e. without overlapping and completely broken down into its logical dimensions.

OKRs – Objectives and Key Results are initially created at company level on the basis of the mission statement (vision, mission, values, purpose), the corporate strategy and the annual plan – at the beginning of an OKR cycle (usually quarterly). As part of this OKR planning, the departments create their OKRs – and the teams (“top down”) from them. Teams or departments can also suggest ideas for OKRs (“bottom up”). Progress is measured and monitored during the OKR cycle. At the end of the OKR cycle, the OKRs are finally measured and assessed in the OKR review and the process is evaluated and optimized in an OKR retrospective.

The founder of OKR is Andy Grove (1936-2016), co-founder of Intel, who introduced this approach at Intel in the 1970s and first documented it in his book “High Output Management” in 1983.

His OKR approach, which he called iMbO (Intel Management by Objectives), was based on management methods such as MBO (Management by Objectives) and SMART (Specific Measurable Accepted Realistic Time-bound).

John Doerr (*1951), who at the time worked as a sales representative at Intel, attended an “OKR course” by Andy Grove in 1975 and then first introduced the OKR method as an investment manager at the venture capital firm Kleiner Perkins Caufield & Byers (KPCB) in 1999 at Google, in which KPCB had previously invested.

OKR should be used …

if you have the feeling that your employees are not focusing on what is essential and right.

if you have no clarity about what your employees are currently working on – and you have the feeling that the departments are working against each other rather than with each other.

if your company is not really making progress – if your employees are not effective or are working inefficiently.

if your employees are not motivated and feel overworked – if they are not satisfied or not confident.

if your company is not sustainably profitable – you need to optimize your company’s liquidity.

OKR can be used throughout the entire company – at company, team and employee level – in sales and marketing, in the product and HR areas, etc.

All of your company’s employees pull together with OKR and work well and efficiently in teams and across departments.

OKR can be used by top management, executives, teams and employees.

OKR – Objectives and Key Results can be used as a goal-setting method or goal management system – at the same time as a strategy implementation method and thus as a strategy execution tool – as well as a management system for goal-oriented and modern employee management.

OKR should not be used to measure variable remuneration or bonuses.

OKR can be introduced at any time – there is neither an ideal time nor an unfavorable time. If a mission statement (vision, mission, values, purpose), a corporate strategy or an annual plan are not available, these can be created as part of the implementation process if necessary.

OKR can also be introduced everywhere – not just in software companies. Regardless of the sector in which the company operates and regardless of the size of the company – whether a start-up, SME or large company.

The best-known OKR book is the standard work by John Doerr entitled “Measure What Matters: OKRs: The Simple Idea that Drives 10x Growth”.

The book has been translated into numerous languages. The title of the German-language OKR book is: “OKR: Objectives & Key Results: Wie Sie Ziele, auf die es wirklich ankommt, entwickeln, messen und umsetzen”.

Many companies use OKRs successfully. These include well-known software companies such as Google, Amazon, Microsoft, Adobe, LinkedIn, Spotify, …

but also well-known companies from other sectors, such as BMW, Daimler, Zalando, Edeka, Anheuser-Busch, …

and numerous small and medium-sized companies, as well as start-ups.

Read more about the use of OKR in German companies here.

There is one main person responsible for driving and monitoring the OKR process in a company.

This is:

We, the OKR experts, call this role: OKR Process Owner – others call the role OKR Coach, Master, Shepherd, Champion, Expert, Manager, Ambassador or Facilitator.

We offer seminars and online courses for training to become a Certified OKR Process Owner.

Advantages of the OKR method

The following advantages result from the use of OKR:

To be honest, we are not aware of any disadvantages – unless OKR is used incorrectly.

For example, we have experienced customers who did not allow any changes to the OKR sets in an OKR cycle before our consultation. We are of the opinion that OKR sets can certainly be changed if the framework conditions change significantly and unpredictably. A good example of this is the coronavirus crisis in March 2020.

The OKR method is the “lubricant” for successful agile teams.

However, OKR is also a good “lubricant” for the transformation process towards agility and can also be used in companies that are not (yet) agile.

The OKR method helps – even in the context of agile processes – to maintain focus and direction, so that no fragmentation or activities are carried out that do not correspond to the company’s mission statement.

Moonshots and roofshots are two different types of target achievement in the OKR process. Moonshots, a terminology that Google in particular uses in the OKR process, also known as “10x thinking” or “stretch goals”, are goals that seem impossible to achieve – goals that go far beyond what the team and employees think is possible. They are designed to encourage or force teams and employees to rethink the way they work and get you out of your comfort zone. However, if used incorrectly, the approach can also lead to problems such as excessive demands, demotivation and the risk of burnout.

Roofshots, unlike moonshots, are still ambitious targets, but the team and employees believe they are achievable. The danger here is that you think in old solution patterns and the result is correspondingly inadequate.

With moonshot thinking, 60 to 70% target achievement is already considered a success – with roofshots, on the other hand, it is 100%, which makes it difficult to clearly assess key results, as you then have to determine whether each key result is a moonshot or a roofshot.

The idea behind the moonshot, however, is to consider what measures need to be taken to achieve not just a 10 percent better result, but a result that is 10 times greater – hence the term “10x thinking”. This gives rise to completely new ideas and measures that would never have been thought of if the goal had only been marginal improvement. “10x thinking” triggers reflection on completely new approaches.

The OKR Process Owner is the responsible person in a company who drives and monitors the OKR process. and monitors.