The term ‘Objectives and key results’ doesn’t exactly roll off the tongue. John Doerr even jokes about that in his 2018 TED Talk. Doerr, as well as being an icon of the American investment scene, is considered one of the inventors of OKR, together with Intel founder Andy Grove.
The two managers introduced the method at Google in 1999. The company founders Larry Page and Sergey Brin were not exactly enthusiastic, Doerr recalls. But they felt there was no other way to manage the company, so they gave it a go.
Management by objectives: if you can measure it, you can manage it
Google is now one of the most valuable companies and brands in the world. And the company still stands by management by objectives – MbO for short. The foundation for management by objectives dates back to an insight from the 1950s. Peter Drucker, pioneer of modern management theory, said at the time: if you can’t measure it, you can’t improve it.
Successful management with OKR is the natural consequence of that conviction. It is based on two simple factors: measurable ‘key results’ are allocated to every corporate target (‘objective’). These are checked at regular intervals, compared and redefined.
The right focus: the success story of management by objectives and the OKR model
The company objectives specify what should be achieved together. Employees and management develop these objectives in one or more workshops. The measurable key results break down how exactly these objectives are to be reached and how success is to be measured. In this way, after a specified time period, everyone can relatively simply and transparently check whether a company is working successfully. Or, as Intel founder Andy Grove put it: ‘Did I do that, or did I not do that? Yes. No. Simple.’
The clear and intuitive structure of objectives (what?) and key results (how?) is the reason the OKR method is so successful. From Intel, Google and Twitter to mymuesli and Flixbus: having been thought up and tested out in Silicon Valley, it is now not just stock-exchange-listed American and European companies who put their faith in OKR, but also rock stars such as Bono from U2.
The Irish musician has been involved in the legendary Live Aid concerts, the fight against AIDS and debt relief for the world’s poorest countries. All in all, a project of gigantic scope with more than ambitious objectives, which Bono and his team also manage with the help of OKR. The rock star explains that OKR provides an environment for risk and trust where failing is not a fireable offence.