{"id":27820,"date":"2021-05-24T17:26:59","date_gmt":"2021-05-24T22:26:59","guid":{"rendered":"https:\/\/salesv4.aligntoday.com\/blog\/okr-companies\/"},"modified":"2023-07-24T06:59:41","modified_gmt":"2023-07-24T11:59:41","slug":"okr-companies","status":"publish","type":"post","link":"https:\/\/aligntoday.com\/blog\/okr-companies\/","title":{"rendered":"What Companies Use OKRs to Grow?"},"content":{"rendered":"

Objectives and key results (OKRs) is the goal-setting framework that\u2019s powered organizational success across industries and geographies.<\/p>\n

The \u201csecret sauce\u201d of OKRs is simple: combine an inspirational vision for the future with innovative actions to get you there. While your company\u2019s mission and values provide your \u201cWhy\u201d, objectives and key results answer your \u201chow\u201d and \u201cwhat\u201d.<\/p>\n

Objectives and Key Results are broadly applicable to help you reach any goal. Even your personal goals can benefit from the structure of OKRs. Whether you\u2019re preparing a company for an IPO or just trying to improve your health, OKRs can help you turn your goals into reality!<\/p>\n

In this post, we\u2019ll take a look at why OKRs have been so successful for so many organizations and share some stand-out examples of OKR success.<\/p>\n

How can teams use OKRs to grow?<\/h2>\n

OKRs can power growth by tying an aspirational vision to innovation and new initiatives. Objectives comprise your growth goals while Key Results are the actions that ensure you’re reaching those goals.<\/p>\n

Traditional approaches to goal setting typically start with measuring what a team is achieving currently and targeting incremental improvements. OKRs, on the other hand, start with an Objective that requires new ways of thinking and working.<\/p>\n

Companies like Google grew at a mind-boggling pace because their OKRs pushed them to develop new and previously unimagined capabilities. Instead of setting goals they could be 100% sure they could hit, they set OKRs with an acceptable failure rate of 30 or 40 percent.<\/p>\n<\/div>

Learn more about Align’s OKR software<\/span><\/a><\/div>

Which company was the first to use OKRs?<\/h2>\n

OKRs originate from the management philosophy of Andy Grove, the third employee and eventual third CEO of Intel. At a previous company, Andy saw the limitations of the OKRs\u2019 predecessor, Management By Objectives (MBOs).<\/p>\n

MBOs tied employee compensation to the employee\u2019s ability to hit targets set by management. The result was goals that lacked employee engagement and failed to reflect new information as the business evolved.<\/p>\n

As Intel transitioned its product focus from memory to microprocessors, OKRs allowed the company to think ahead to lead a new revolution in technology. The ability for every employee to set their own goals drove innovation and a culture of success at Intel.<\/p>\n

Grove defined this OKR in his classic book, High Output Management, as the answer to these two fundamental questions: \u201c1) Where do I want to go? and 2) How will I know I\u2019m getting there?\u201d<\/p>\n

OKRs at Google<\/h2>\n

If Andy Grove is the father of OKRs, John Doerr is, as he self-proclaims, The \u2018Johnny Appleseed\u2019 of OKRs.<\/p>\n

Dick Costolo, former CEO of Twitter and Google alum, explains it as follows:<\/p>\n

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The thing that I saw at Google that I definitely have applied at Twitter are OKRs\u2014Objectives and Key Results. Those are a great way to help everyone in the company understand what\u2019s important and how you\u2019re going to measure what\u2019s important. It\u2019s essentially a great way to communicate strategy and how you\u2019re going to measure strategy. And that\u2019s how we try to use them. As you grow a company, the single hardest thing to scale is communication. It\u2019s remarkably difficult. OKRs are a great way to make sure everyone understands how you\u2019re going to measure success and strategy.<\/p>\n<\/blockquote>\n

Google still openly publishes their OKRs on areas of focus like sustainability. Every employee, from the CEO to programming interns, shares their OKRs publicly.<\/p>\n

How does Google set goals with OKRs?<\/h2>\n

The key to the success of OKRs at Google comes from their aggressive, but achievable targets. Google targets a 70% success rate on their OKRs, allowing for learning from failure. re:Work, Google\u2019s official guide to work describes this strategy:<\/p>\n

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Google often sets goals that are just beyond the threshold of what seems possible, sometimes referred to as \u201cstretch goals.\u201d Creating unachievable goals is tricky as it could be seen as setting a team up for failure. However, more often than not, such goals can tend to attract the best people and create the most exciting work environments. Moreover, when aiming high, even failed goals tend to result in substantial advancements.<\/p>\n<\/blockquote>\n

This tolerance of failure created a learning culture at Google. This culture attracted employees who wanted to experiment and drive innovation. As Lazslo Bock, former head of People at Google explains, \u201cIf your goals are ambitious and crazy enough, even failure will be a pretty good achievement.\u201d<\/p>\n

For a deep dive on how Google sets OKRs, check out this training from Google Ventures Startup Lab partner Rick Klau.<\/p>\n