What are OKRs?

“Good ideas with great execution are how you make magic. That’s where OKRs come in.” Larry Page

OKR (Objectives and Key Results) is a framework for large organizations to execute company-wide strategies. It was created by Andy Grove, CEO of Intel and popularized by John Doerr, who introduced the framework at Google and later wrote the popular book: Measure what Matters. OKRs are very fashionable right now.

What goes into an OKR:

  
    Objective
    
      •Directional
      
•No constraints
      
•Idealistic
      
•Inspirational
      
•Even if you fail, you still succeed
	
      •Go to the moon and come back safely in a decade

      •Eradicate malaria by 2040

      •Win the Superbowl in the next 5 years

      •End mother to child Aids transmission by 2020

    Key Results: What pickles can teach us about OKRs
    
      •Measurable 
      
•3-5 only
      
•Measure quality and quantity
      
•Binary. You either do them or don’t
	
     •	Our new web browser has 100 million users

      •	lose 10 pounds

      •	Submit 10 conference proposals

    Color coding check-ins
    
	•	Regular check-ins for key results

    •  Green: 70-100% (Continue)

     •	Yellow 30-70% (Recover)

      •	Red 0-30% (Recover or replace)

 	•	Always green is bad. Means sights are set too low

Why OKRs will not work

OKRs will most likely suffer the same fate as most other management fads - they will be introduced into an organization with good intentions, but will follow the same predictable path as other frameworks and methodologies. They will be implemented in name only, but the underlying dynamic will remain the same.

“Did you meet your objectives?” will be replaced with “Did you fulfil your OKRs?”

This can be explained by Prescott’s Pickle Principle:

“Cucumbers get more pickled than brine gets cucumbered.”

While this principle is in reference to people, I believe it also applies to the introduction of any new management system, framework, or methodology.

A brine where OKRs flourish :

1. Radical transparency. Sundar Pichai reviews his OKRs with the whole company every three months

2. The ability to set audacious goals without being a slave to stock price. Founder-led companies, such as Google, Tesla and Amazon set audacious objectives. Most publicly traded companies are slaves to whims of their stock price, which drive short-term earnings and cost savings. And that is the real objective of most companies, keep the shareholders happy. This is exactly what Elon is not.

3. Driven by the CEO. The rollout of the OKRs will be driven by HR, but owned by the CEO. Andy Grove taught the class on OKRs in Intel.

4. Amber and red are good. Red/Amber/Green means different things in large organizations. If OKRs are constantly green, it means something is wrong - it is not a reflection of success, but rather a suggestion that the objectives are set too low. Amber is good - it highlights that objectives are only being partially met, but a significant drive is required for greater success. Red could either mean that objectives are set too high, or the process by which the objective is met is in need of serious improvement. Most organizations reward green, which will result in weak Key Results.

5. No annual performance reviews.

6. Compensation is not tied to Key Results.

Compare your current company’s’ brine with a flourishing brine.

So what?

The focus of leadership should not be to introduce OKRs which will follow a predictable path. Rather, It should be to slowly change the brine. Choose one of step 1-6 and change it.

Another option is the experimentation route. Take a pickle and create an entirely new brine (e.g. Skunkworks).