How OKRs helped Intel and Google transform their growthPosted by Sathish Kumar Saturday, Jun 19, 2021
https://www.okrsoftwaretools.com/
In the 1950s, business management began to take a different shape and was converted into a science. It was in 1954 that a corporate guru named Peter Drucker published a book that introduced a management principle called Management by Objectives (MBO’s). It took the broad stage to direct companies towards a specific goal, aligning management and employees with a common objective and what needs to be done to achieve that objective. MBO’s were extremely popular and set the stage for another important management technique to completely revolutionize the business world - Objectives and Key Results (OKR).
OKRs: A Star is Born
In 1970, Intel made a significant shift in its business model by converting to a microprocessor company.Its founders and management team had to ensure that Intel’s employees had a clear picture of their goal and a precise method of getting there. It was then that one of Intel’s founders, Andy Grove, introduced Objectives and Key Results to his team. He took the MBO model and simplified it down to 2 simple questions:
Where do I want to go?
What steps will I have to take to get there?
This system offered Intel a way to keep its employees focused on the same goal and defined a clear path to success. The objectives were to be transparent in their message and inspiring. The key results were measurable deliverables that the team had to accomplish in a specific time frame. OKRs were set for short goal cycles with no more than five key results in each objective, sort of like a sprint to each goal. All levels of management and employees were able to see one another’s OKR, and this allowed the team to have a clear vision of where they needed to go.
The framework was a total success. Intel successfully transitioned from a memory company to a microprocessor company, and OKRs became a staple of how Intel managed its employees.
OKR Meet Google
In 1974, John Doerr joined Intel and learned about the incredible benefits implementing OKRs had on the company. Doerr would eventually leave Intel to join the venture capital firm Kleiner Perkins, and in 1999, Doerr introduced the concept of OKRs to the founders of Google. Google embraced the idea, and in a very short matter of time, the company experienced levels of growth they could have never predicted. From that point on, OKRs became the go-to framework for goal setting and achievement for many successful companies leading the charge in business today.
OKR vs. Other Frameworks
Other goal-setting frameworks have arisen over the years, such as SMART, which stands for Specific, Measurable, Achievable, Realistic and Timely; and KPI, which stands for Key Performance Indicator. Both of these are effective tools in business management; however, when compared to either of these two, objectives and key results come out on top.OKR provides a more aggressive (yet achievable) goal-setting method than KPI. When measured up against SMART, OKR wins again because it does not isolate goals from different levels of management. It provides a clear picture for everyone to see, whether it’s the company’s ultimate goal or short-term goals.
Choosing the Right Objective From Day 1
Over time, developing a great OKR has been a mission for many business owners. Getting your team on the right path is essential, and there are ways to do this without having to guess whether or not you’re doing it right. The OKRPeople platform gives business owners an advantage in developing the right objectives/goals to motivate their team. OKR takes the guesswork out of goal planning and puts you, as a business owner, several steps ahead. The OKRPeople program focuses employees and management on achieving the right objective from day 1.
Why your startup should use OKRs from Day 1
Objective and Key Results (OKRs) are a method of goal setting and tracking used by many big and small companies. They were first introduced by Intel’s founder, Andy Grove, during the period of time in which Intel transitioned from a memory company to a microprocessor company. Grove needed the process to be quick and efficient, making sure the employees at Intel were working towards the main objective. The principles behind OKRs are centered around transparency and aligning your team towards a common goal. The objectives that are set by management are the goals or visions they have for the company. They should motivate all team members, and upon reaching the goal, there should be some growth or progress. The key results are the measurable steps the team will take to achieve each objective. There should be no more than five key results and no less than 2. All key results are bound by time and have numerical features in them that allow the team to track the results each one delivers.
OKRs For Your Start-up
Is it necessary to implement OKRs in your start-up company? The short answer is no. However, if you want your business to make great strides coming out of the gate, you will want to use this framework from day 1. You don’t have to run a Fortune 500 company like Google or Amazon to follow the OKR system (even though both Google and Amazon use these principles a great deal).
Even a start-up company has much to gain by ensuring that its sales or marketing team all share a common goal, creating a synergistic work environment. Imagine your business operating at full capacity, with complete transparency of the objectives that need to be completed and a step-by-step method to achieve those goals. This is exactly what OKRs will provide for you. This kind of time-efficient operation gives a start-up company a substantial competitive edge.
Choosing the right OKR for your start-up
So we know that OKRs are a great way to get your start-up running optimally from the start. We have seen the benefits OKRs have provided for other successful companies. But how do you ensure that you’re setting up the right objectives for your team? Here are a few pointers to consider when choosing an OKR for your start-up:
Put More Heads Together
The beauty of OKRs is that they are transparent at all levels. While they direct team members towards a common goal, it does not mean individuals are barred from proposing ideas/strategies. Brainstorm with employees and management to see what ideas/goals your team has in mind. With that information, you can put together a list of objectives. These can be a mix of short-term goals, which your team would typically aim to achieve in each quarter, and broader aspirational goals that your start-up company as a whole will strive for as growth occurs and progress is made.
Aim (Reasonably) High
After your team has given their input and believes they are capable of achieving it, set a challenging goal.The trick here is not to set a goal so tricky that employees lose morale. Start-up companies face a lot of survival pressure in their first year, so it’s essential to keep the team challenged and motivated with each goal they aim for.
Track Your Progress in Numbers and Real-Time
OKRs allow for a lot of flexibility when it comes to adapting to changes or reevaluating certain key results and objectives. This is possible because the goal cycle is shorter. What does this mean? Instead of setting a goal that would take a year or longer to reach and evaluate, you can create shorter time-bound objectives to accomplish. If you see that certain key results are not being delivered the way you had hoped, you can make immediate changes to improve your likelihood of success. This kind of time-bound performance is vital for start-up companies trying to survive their initial phase of operation.
Transparency is Synergy
The OKRs you implement should be visible to all employees. This includes the broader long-term objectives that you have in mind for your company. If employees can see the short-term goals and the long-term goals, it will help clarify the direction/vision you, as an owner, have for your start-up. This will result in team members feeling they are part of something bigger, and, in turn, will add to their motivation to achieve the short-term goals set out for them with great success.
Choosing a Program to Help You Get Started
Are you still unsure of how to best begin putting together a successful OKR? It’s completely normal to have doubts, especially when dealing with the pressure of starting a new business. Programs such as OKRPeople are specifically designed to get your team to align with your company’s vision and put it immediately on the right path. OKRPeople is an excellent tool for start-up owners (as well as established players) to create, update and monitor OKRs. Let OKRPeople help you to take your team and your company to the next level.
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