Strategic planning is crucial to a company because it outlines a path forward and establishes measurable goals. But, there are very few systems that allow for strategy to be visible to everyone in a company that also spell out goals and measure results.
OKRs are a goal-setting framework used by individuals, teams, and organizations to define their goals and measure success. They have a deep history going back to the 1950s and are currently used at Adobe, Allbirds, Amazon, Google, Intel, LinkedIn, Microsoft, and Netflix.
Here are four moments that have shaped corporate adoption of the OKR goal-setting framework.
1. The inventor of management.
Peter Drucker is considered the “godfather of modern management.” A prolific adviser, consultant, teacher, and writer, he authored more than 30 books. One of his most popular titles, “Management by Objectives,” also known as MBO, defined the role of objectives in an organization with management cascading the importance to employees and then determining their sequence.
A critical part of this process was measuring employee performance. Drucker had a people-centric focus and believed that they were more likely to succeed when employees were part of the goal-setting process. The MBO model inspired future leaders and was adopted by corporations including Intel and Hewlett Packard.
to track goals at Intel. He crafted a newer approach that built a standard an entire company could follow by asking two simple questions:
Where do I want to go?
2. What steps will I have to take to get there?
While MBOs were a critical foundation for goal-setting in corporations, OKRs brought clarity to how a company defined success. In a previous role, Grove saw firsthand the challenges of an organization that emphasized expertise without execution. Most often, the outcomes were not good.
Grove’s OKRs were designed with short cycles containing no more than five key results for every objective. They were transparent across every level of the organization to allow for a shared vision. Grove's OKRs highlighted individual execution and gave teams and organizations purpose. With this process, teams could understand if they were going in the right direction because they measured outcomes.
was a student of Grove’s at Intel when he arrived in Silicon Valley in the mid-1970s. As Intel began the transition from memory to microchips, Grove needed the company to align on their goals. John Doerr and others immediately bought into Grove’s OKR system to help the team focus.
I remember being intrigued with the idea of having a beacon or north star every quarter, which helped set my priorities. It was also incredibly powerful for me to see Andy’s OKRs, my manager’s OKRs, and the OKRs for my peers. I was quickly able to tie my work directly to the company’s goals. I kept my OKRs pinned up in my office and I wrote new OKRs every quarter, and the system has stayed with me ever since.
) captured 85 percent of the 16-bit market by 1986 despite facing intense competition in the microprocessor market. Intel successfully navigated the transformation, and Doerr remembers that the idea of having a beacon every quarter helped set his priorities.
3. Doerr shared OKRS with the world.
Since Doerr left Intel in the 1980s, he’s shared his learnings from Grove’s objectives and results system to several other companies. Many of the companies that galvanized around the OKR methods have seen measurable impact, including BWM and Schneider Electric, and Doerr has made it his mission to share those success stories with the enterprise world.
The OKR framework has changed very little since John Doerr’s created his
. Doerr has found that the key to achieving OKR success is a shared rally around goal-setting that comes from every level of an organization, including the CEO, senior leadership, and every team member. It’s not just enough to commit to the OKR process. Companies need to make it part of their culture with complete transparency.
4. Google adopted OKRs.
In 1999, Doerr introduced OKRs to Google through his job at Kleiner Perkins, a venture capitalist form.
On that balmy day in Mountain View, I came with my present for Google, a sharp-edged tool for world-class execution. I’d first used it in the 1970s as an engineer at Intel, where Andy Grove, the greatest manager of his or any era, ran the best-run company I had ever seen. Since joining Kleiner Perkins, I had proselytized Grove’s gospel far and wide, to 50 companies or more.
Doerr was excited by the leadership, judgment, and creative work culture that Google had created. These were key parts that can help be predictive of OKR success. Gathered around a ping pong table with 30 early Google employees, Doerr pitched his OKR framework.
My objective that day, I told the band of young Googlers, was to build a planning model for their company, as measured by three key results:
KR #1: I would finish my presentation on time.
KR #2: We’d create a sample set of quarterly Google OKRs.
KR #3: I’d gain management agreement for a three-month OKR trial.
He finished promptly at 90-minutes and left Google with the toolkit for their success. According to Alphabet CEO and Google co-founder Larry Page, OKRs helped propel 10x growth on multiple occasions.
5. Doerr published his OKR framework on Coda.
OKRs were developed for giant companies—passed from their creation at Intel to a newly-formed Google—but not everyone is setting OKRs for the next Google or Intel. The power that the OKR system holds is that it can work for a small team, emerging startup, and can even personal goals. He's said:
The objective is what I want to have accomplished. The key results are how I’m going to get it done. The objectives are typically longer lived. They’re bold and aspirational. The key results are aggressive, but always measurable, time-bound, and limited in number.
Doerr summarized many of these points in a book and a doc that he published on Coda with templates that can help teams visualize plans to get started with the OKR process.