In 2019, I bought the book Measure What Matters, the #1 New York Times Bestseller written by the Legendary venture capitalist John Doerr. I read it cover to cover, and was deeply hooked by the simplicity of how the goal-setting system of Objectives and Key Results, OKRs, that has helped Intel turn around a losing battle and beaten Motorola for a microprocessor business competition back in 1970s and Google to have more than 10x growth. The book contain quite a few useful guides, and Larry page said he wish he had the book “ Measure What Matters “ 19 years ago when he co-founded Google.
OKR’s original concept came from Intel former CEO, Andy Grove in an effort to create a measurable goal setting system. Johnn Doerr, learned OKR while he was working at Intel. When He became a VC, he then pitched the practice to Google founders Larry Page and Sergey Brin in 1999, during its first year. It supported Google’s growth from 40 employees to more than 60,000 and zero revenue in 1999 to USD162 billion . OKRs is praised to have helped Google to make tough choices on priorities while keeping the team on track, and on time when it is matters the most!
John Doerr has also taught it to more than 50 startups in his decades of investing in some of the most successful companies in the world, besides Google, they are Amazon, Intuit and many more. What’s fascinating is, OKRs work best for company of any sizes, it’s good for start-ups and the big companies, so long the OKR process is fully practiced faithfully, It works!
Today, Google and other thousands of well known companies like Facebook, LinkedIn, Samsung, Panasonic, Alibaba, Walmart, Ikea, and US government, the Navy are using OKRs to achieve superb results. The OKR are powerful yet simple and as John Doerr calls them, OKR’s has 4 superpowers.
- It helps a company to Focus and Commit to the most important business Priorities
- It aligns and connects everyone for better teamwork by linking the team and individual OKRs to deliver the biggest impact for the contribution to the company objective
- It increases transparency and holding employees to be more accountable by allowing everyone in the company to see each other’s goals and track the progress. That is, everyone’s goals, from general clerk to CEO, are transparent to the entire organization.
- OKRs help Stretch for Amazing Results by motivating the team to excel by doing more than what have been thought possible.
In this goal management system, objectives define what we want to achieve, and the key results are how those important goals are to be achieved with specific, measurable actions within a time period. Following are some examples of OKR application in a company.
OKR FOR COMPANY/CORPORATE LEVEL
Objective Exceed annual revenues target and improve profitability
- Key Result 1 Achieve quarterly revenue of over USD7,500,000
- Key Result 2 Open 5 new outstation key account Q3 sales over $500,000
- Key Result 3 Improve gross profit margin % from 75% to 60%
OKR FOR SALES AND MARKETING DEPARTMENT
Objective Achieve important marketing metrics of the company
- Key Result 1 150000 website visitors per month
- Key Result 2 2000 signups in Q2
- Key Result 3 8000 trials in Q2
- Key Result 4 500 new paid customers in Q2
- Key Result 5 Maximum paid user acquisition cost of $30
Objective Increase recurring revenues
- Key Result 1 To achieve ($ MRR) a monthly recurring revenue of $350k
- Key Result 2 Improve monthly subscriptions vs. one-time orders to 70%
- Key Result 3 Increase average subscription size to at least $80 per month
- Key Result 4 Increase % annual renewals to 80%
- Key Result 5 Reduce churn % to less than 3% monthly
OKR FOR FINANCE DEPARTMENT
- Objective Improve annual budgeting and business planning
- Key Result 1 Train 6 division managers for the business planning session
- Key Result 2 Receive business budget proposals by 31st Oct
- Key Result 3 Have each project sales manager to use DoerHRM metric dashboards
- Key Result 4 Close the business budgeting by 30th Nov
OKR FOR HR MANAGER & HR DEPARTMENT
Objective Well trained & on-board with OKRs & configure DoerHRM
- Key Result 1 Selected Key persons are trained by DoerHRM’s coach
- Key Result 2 To start the Alignment, and Engagement with OKRs in the company
- Key Result 3 Study the DoerHRM OKR Samples & Implementation Checklist
- Key Result 4 Read through https://www.doerhrm.com.sghrm/tutorials
- Key Result 5 Sign up at https://www.doerhrm.com.sghrm/.