The OKR Method Guide
Purpose of the OKR Method
“OKRs are simple in theory but challenging to implement in practice. Done well OKRs will impact your culture and the ways of working within your organisation which is never a simple undertaking. We hope that sharing our experience will help others traverse these challenging aspects of OKR adoption” Mike Horwath & Taner Kapucu – OKR Method Authors
The OKR Method is an attempt to create a lightweight approach that allows organisations to adopt and implement OKRs with speed and certainty. The Method has been designed as an ‘Overlay Framework’ to your existing operating model thereby reducing the requirements for major internal surgery and minimising the impact during its implementation.
The OKR Method has not been designed as a recipe book for use without prior experience. It is designed to be a non-proprietary method that anyone can use, skills which are transferable, but it is recommended that OKR experts and coaches are consulted in the rollout of the Framework. This is essential for the maintenance of a lightweight framework that does not include many elements or the soft skills required to implement OKRs well.
We also recommend that an OKR Software platform is used to obtain the most benefit from OKRs, however, we highly recommend that you work with OKR Implementation coaches externally from the Software provider to ensure all aspects of the implementation are provided with equal focus.
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© 2022 Mike Horwath and Taner Kapucu This publication is offered for license under the Attribution Share-Alike license of Creative Commons, accessible at https://creativecommons.org/licenses/by-sa/4.0/legalcode and also described in summary form at https://creativecommons.org/licenses/by-sa/4.0/. By utilizing this OKR Method Guide, you acknowledge and agree that you have read and agree to be bound by the terms of the Attribution Share-Alike license of Creative Commons.
The OKR Method Definiton
The OKR Method is different to The OKR framework. The OKR framework is a goal-setting framework for individuals, teams, and organizations to define measurable goals and track their outcomes. The OKR framework itself contains very little structure, guidance or approaches for the set-up, management and change process that occurs when adopted into a business context. The generally accepted parameters of The OKR framework are:
- Comprise an objective with 3–5 key results
- Objectives should be significant, concrete, and clearly defined
- Objectives are inspirational
- Objectives can also be supported by initiatives (activities that help to move the key results)
- Key results should be measurable
- An organization’s target success rate for key results be 70%. A 70% success rate encourages competitive goal-making that is meant to stretch workers at low risk
The OKR Method expands on these ideas to create a set of steps that can be taken to implement a Strategy Management Framework for an organisation. The OKR Method can therefore be taken as an approach for adopting and implementing a Strategic Management Framework. To do this it includes:
- A set of Principles
- A method Architecture
- A set of Phases, Events and Roles
- Artefacts that support the adoption process
- A set of roles to operate the Method
Taken together and used as designed the Method provides the process and steps to implement a Strategic Management Framework based on the concept of OKRs.
The OKR Method Theory
OKR’s lineage can be traced back to Management by Objectives, first popularized by Peter Drucker in his 1954 book The Practice of Management. Management by objectives at its core is the process of employers/supervisors attempting to manage their subordinates by introducing a set of specific goals that both the employee and the company strive to achieve in the near future, and working to meet those goals accordingly. It involves 5 steps:
- Review organizational goal
- Set worker objective
- Monitor progress
- Give reward
MBO’s result in numerous unintended consequences in organisations that leads to detractors, for example encouraging workers to meet targets through whatever means necessary, which usually results in poor quality. Part of this issue is the connection of Objectives to rewards or monetary incentives. “Andy Grove described OKRs as a stopwatch, a personal tool so he could gauge his own performance. They are not meant to measure others. If you are using OKRs for compensation, you’re doing them wrong.”
The other aspects are the isolation of goals and objectives within an organisation’s silo without considering ‘systematically’ the whole and as described on Wikipedia:
There are limitations in the underlying assumptions about the impact of management by objectives.
- It over-emphasizes the setting of goals over the working of a plan as a driver of outcomes.
- It under-emphasizes the importance of the environment or context in which the goals are set.
Therefore the OKR Method has a set of principles which underpin the methods approach and the successful implementation of OKRs using the method must adhere to these principles for successful adoption. The principles can be found in the next section of the OKR Method Guide.
The OKR Method has been designed as an overlay specifically for Scrum and Scrum teams and as such embraces the approach detailed in the Scrum guide for “empiricism and lean thinking. Empiricism asserts that knowledge comes from experience and making decisions based on what is observed. Lean thinking reduces waste and focuses on the essentials.” Our recommendation is that any user of The OKR Method is familiar with inspection and adaptation within the empirical Scrum pillars of transparency, inspection, and adaptation.
Finally and most importantly The OKR Method’s Core ideation is that OKRs are not Contracts. The are hypothesises for what impact you think you can make if all the stars align, which as we know are not as often as we would like to think. This is the biggest organisational shift from output-driven metrics to outcome-driven metrics that any organisation will face and has the greatest cultural impact.
Therefore the theory that supports the OKR Method are:
- OKRs are not contracts, they are indicators of how successful our experiments are.
- Empiricism and lean thinking are key to success with OKRs, therefore, transparency, inspection and adaption are essential.
- The principles are required on whole to allow the Method to operate.