What are OKRs (objectives and key results)?

Businessman and engineer Andy Grove is often attributed with having popularized the concept of objectives and key results, or OKRs, in the 1970s during his time at Intel. OKR is defined as a system that individuals, teams, and organizations use to help determine their goals and track their outcomes. As Grove explained it, according to John Doerr’s 2018 book, Measure What Matters, “The key result has to be measurable. But at the end you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it.”¹ These OKRs need to be verifiable and measurable with a numerical value or on any scale of 0% to 100%. In this framework, an objective is the end goal, and a key result is how you’re going to achieve that goal.

OKRs establish clear goals for organizations to work toward collectively. OKRs are like the trophy at the end of a long tournament that the team wants to win. They provide a measurable target for an organization, team, or individual to hit. For smaller start-ups, Doerr writes, “OKRs are a survival tool ... Structured goals give backers a yardstick for success.” At medium-sized companies that are rapidly scaling, OKRs are “shared language for execution. They clarify expectations ... They keep employees aligned, vertically and horizontally.” And at larger enterprises, “OKRs are neon-lit road signs. They demolish silos and cultivate connections among far-flung contributors.”

According to one popular study from researchers Chris Mason and Joe Kutter, “even a minimal use of OKRs led to higher levels of performance, including an 8.5% lift in hourly sales at a call center. Consistent use of OKRs resulted in an 11.5% increase in the chances of moving to a higher performance bracket across their corporate associate population.”²

Your business may also be familiar with key performance indicators, or KPIs, as another way of measuring success. Though they often work collaboratively, KPIs differ from OKRs in how they’re used to direct the wider scope of a business. A KPI is a stand-alone performance metric that can be applied to a program, project, or other business initiative. An OKR, on the other hand, not only measures performance but also provides context for a larger organizational goal. For example, a KPI may be an X% increase in sales. An OKR, comparatively, might have the objective of increasing brand loyalty, with the key results of increasing return customers by 30% and increasing the customer engagement score by 20%.

As Doerr outlined in an interview with Harvard Business Review, the benefits of OKRs can be remembered with the acronym FACTS, which stands for focus, alignment, commitment, tracking, and stretching.³ Organizations can find a few objectives to focus on and a few key results to measure the progress toward each objective; this gives teams a clear, defined goal. From there, teams can align on how they will achieve this larger vision. Commitment is the process through which teams or individuals outline the steps they will take to stay accountable and work toward these goals. Tracking is the means through which OKR metrics are measured over time. And stretching helps individuals or organizations to push themselves toward even bigger, more ambitious goals.