Introduction

WHY WE WROTE THIS BOOK

Any company embarking on an OKRs implementation will realize very soon after the work begins that it is much more than a "measurement project." The ultimate goal is improved performance through the identification of objectives and key results that are refreshed frequently in order to ensure agility in a business world where the pace of change is ever accelerating. However, to achieve success with OKRs, there are numerous processes and tasks that must be seamlessly executed. Generating support and enthusiasm from executives, determining where to deploy OKRs, mastering the nuances of effective OKRs, connecting OKRs throughout the company, reporting results, capturing key learnings, and ingraining the methodology into the culture of the organization are just some of the requirements of an effective rollout.

As we write this, the OKRs field is still relatively nascent in terms of standard practices and proven procedures. It is an emerging discipline, and while implementations are growing by the day, and consultants and software providers are coming forward in attempts to plug knowledge gaps, no definitive how-to guide exists for organizations anxious to implement OKRs without falling prey to potential pitfalls that can derail this or any change effort. This book is our answer to that challenge. It was written to fill the void that currently exists between knowledge and practice. Organizations wishing to reap the benefits of OKRs must first be made aware of-and properly equipped to overcome-the challenges associated with an undertaking of this magnitude. Based on our global consulting experience with OKRs as well as the extensive research we've conducted, these pages will act as your comprehensive guide through the entire OKRs terrain. We're confident the tools and techniques profiled in this book will propel the success of those currently engaged with OKRs and compel more executives to launch OKRs programs in their own organizations. Before we outline how the book is organized, let us share with you our backgrounds and experience with the topic.

HOW WE GOT STARTED WITH OKRs

Ben

"When you go for a hike with your family, it's fine to just walk and enjoy the scenery, but when you're at work you need to be crystal clear about the destination. Otherwise you're wasting your time and the time of everyone who works with you."

Those words changed Ben's life. The source of that wisdom was former Oracle Chief Financial Officer Jeff Walker. Walker shared this advice with Ben in a personal conversation and later expanded on the principle in a keynote he delivered to a group of planning professionals in Palo Alto in 2011. During the talk Walker explained objectives and key results (OKRs). He discussed how businesses must outline their desired future in the form of objectives-aspirational and qualitative statements designed to move the organization forward in a desired direction. Each objective is then translated into an underlying set of measurable key results. If the objective asks, "What do we want to do?" the key result asks, "How will we know if we've met our objective?" Ben was immediately struck by the potential power of OKRs and sensed that the framework would become critical to his work, but at that point didn't know how it would manifest. He was soon to find out.

Ben was approached by an organization to assist them with a KPI (key performance indicators) project. He accepted the assignment and found himself eagerly awaiting the strategy document that was to be supplied by the company's CEO. When it arrived, Ben felt overwhelmed. The strategy slide decks and documents were stuffed with ideas and good intentions, but the materials contained a confusing mix of key pillars (corporate priorities), core values, and business metrics. Ben struggled with how to approach the project, and it wasn't until arriving at his hotel room the night before meeting with the CEO and CFO that he recalled the advice of Jeff Walker. With that in mind, Ben condensed the strategy document into a single page, translating the key pillars into objectives, and assigning key results to each. The next day, he used this organizing framework of OKRs to share his understanding of the organization's strategy. After his overview, the executives fell quiet and asked for a moment of privacy. Ben left the room convinced he had misinterpreted the strategy and would quickly be dispatched to the airport for the next plane home. Two minutes in the hallway felt like two hours, but when he was summoned back into the room he was relieved to see a smile on the face of the CEO, who said: "We want you to help us create this type of document for every business unit and department in the company!" After helping close to 50 teams at the company draft and refine their OKRs, and later witnessing their success with the method, Ben knew he had found his calling. Hundreds of hours coaching teams and managers later, here we are.

Paul

Paul has been working in the performance measurement and strategy execution space for close to two decades. He was introduced to the concepts through interactions with a company looking to improve its performance. In Paul's case, the company was in a fast-changing industry with nimble competitors emerging rapidly and customers demanding improved service with no price increases. A new strategy was created: one that if effectively implemented would deliver enhanced strategic skill sets across the company, see the overhaul of key business processes, drive value for customers, and ultimately produce breakthrough financial results. But could they make it happen? Key to their execution was the identification of measures they would use to hold themselves accountable for achieving each plank of the strategy. It took time, but by focusing on a core set of metrics to learn about what was, and was not, working with the strategy, the company ultimately delivered on its promises to customers, employees, and shareholders alike. The real "Aha" for Paul came in the form of employee surveys conducted before and after the development and use of strategic measurement. Beforehand, just a small percentage of employees said they understood the company's strategy and how they could contribute. However, after the use of strategic measurement, the percentage jumped nearly fivefold to a large majority of employees. Like Ben, Paul saw the value of applying measurement to strategy and set out to help organizations harness that power.

Some readers may be familiar with Paul through his work and books on the Balanced Scorecard, a popular framework that translates strategy into objectives, measures, targets, and strategic initiatives, using four distinct yet related perspectives of performance: financial, customer, internal processes, and learning and growth. The framework has been embraced by legions of organizations around the globe, and while it is unquestionably effective, many companies have struggled in implementing, and fully maximizing the benefits of, the scorecard model. One of the chief issues organizations raise is the model's increasing complexity. The Scorecard's taxonomy has swollen over the years since its founding in the early 1990s, and many experts have layered on increasingly convoluted schematics that have added even more moving parts to what was originally conceived as an easy-to-apply approach to measuring an organization's strategy. The end result is that, for many organizations, despite its benefits the Balanced Scorecard appears too cumbersome to be rolled out to an entire organization, one comprised of teams yearning for simple, yet powerful methods to ensure their work is focused on what matters most and leads to the execution of the company's strategy. Enter OKRs.

Paul was searching for a "lighter-weight" system that would still provide the very real benefits desired by his clients who wished to extract the most value from their strategies. He discovered OKRs through his research and quickly learned of the work Ben was doing in the field. The two met and bonded over their mutual desire to help improve organizational performance and the belief that OKRs, while seemingly simple, can deliver outsized value to any company wishing to improve focus, drive alignment, and improve engagement. They began working together with clients in 2015.

HOW THE BOOK IS ORGANIZED

Objectives and Key Results is composed of seven chapters. The first six will lead you through an OKRs implementation in more or less chronological order, while the final chapter showcases the work of a number of global organizations currently benefiting from OKRs.

In the opening chapter we share the history of OKRs, followed by definitions and examples of both objectives and key results. Modern organizations face many crucial challenges that OKRs are well-suited to overcome. The chapter explores some of the more pressing topics. Chapter 1 concludes with an overview of the many benefits of OKRs. Before you can implement OKRs, you must ensure your organization is ready to embark on the journey ahead. Chapter 2 explores how to prepare for the creation and use of OKRs. The first question posed is, "Why are you implementing OKRs?" The critical topic of executive sponsorship is discussed, including how to gain sponsorship. Considerations on where to develop OKRs are presented, followed by a comprehensive plan for developing OKRs. The chapter concludes by defining the strategic context for OKRs using a mission, vision, and strategy. In order for OKRs to...