In the 1970s, OKR was developed by the then CEO of Intel, Andy Grove who kept two crucial questions in mind. “Where do we want to go, and how will we know we’re actually getting there?”.
Many companies switch to OKRs after following the success stories of companies that use OKRs in terms of their seamless execution and outcomes.
Objectives and Key Results have since then been used by many leading companies to expand their businesses and achieve targets regularly John Doerr states that “95% of OKR users in the US knew how their work aligned with the company they worked in as opposed to 79% of people who were non-users” in his book Measure What Matters.
It has not only magnanimously benefited these business giants but also helped employees turn their personal goals and dreams into reality. Different companies have different growth models and it is helpful to see how they are using OKR to maximize effectiveness in their way. It is not so much about totally emulating their ways as gaining helpful insight.
Top companies who uses OKRs and their success stories
The success stories of leading companies who use OKRs and their best practices are shared.
How Google use OKRs?
Google is a multinational company and one of the Big Five companies in the American IT industry. Initially, this was a very ambitious OKR but after many quarters of OKR and many years later, it is the most visited website in the world today with a whopping 70% of the browser market.
It expanded from only a room full of 40 employees to 135,301 employees in 2020 across continents and had rapid growth with new products and services, acquisitions and partnerships ever since it was launched in 1998.
In the initial phases, Google OKR must have looked like:
Objective- Create a search engine with the most number of users.
Key Result- Boost the number of web visits to 20 million each week.
Tips from Google to use OKRs Effectively
1 Make your OKRs Accessible to all
In Google, OKRs are public and coordinated across teams and individuals to promote transparency. The availability of established OKRs to all tiers allows employees to decide on how they can contribute to the company.
It also helps align every stratum of the company to the main vision and mission of the company that is “to provide access to the world’s information in one click
2 Opt for stretch goals
Stretch goals are set and they make sure that these OKRs are big and aspirational rather than incremental.
Aspirational goals are hard to achieve but even if 70% is achieved, it is appreciated with a pinch of salt.
The unmet goals are a reminder that there is always space and potential for further improvement. Incremental goals, on the other hand, give an illusion that the company is at its maximum threshold potential and cannot go any further.
OKRs are established quarterly and they are accessible with the use of tools like Google Docs, spreadsheets, etc.
3 Color code to grade your OKR outcomes
Outcomes are graded on a colour scale of red, green, and yellow. Key results are also graded on a scale of 1-1.0 towards the end of each quarter and low grades are utilized as data to improve in the next quarter.
How does LinkedIn use OKR?
“Greater Urgency, Greater Mindshare”- CEO Jeff Weiner.
Despite being launched only on May 5, 2003, LinkedIn has 774+ million members across geographical locations.
It is a top site for recruiting job applicants and professional networking. Jeff Weiner once expressed what OKR means to his company and the teams involved.
He believes that OKRs should be challenging and impactful.
He prefers to make OKRs more personal by infusing positive energy into his employees.
By beginning to ask questions about how employees are getting on with their OKRs, he was able to boost employee performance during his time as the CEO of LinkedIn.
Practical Tips from LinkedIn to use OKRs Effectively
1 OKRs need to Time-Bound
In LinkedIn, OKR is used to make missions actionable. OKR serves as a reminder and creates a sense of urgency to accomplish goals over a specific time frame.
This way, employees are able to review their own performance and structure what they want to accomplish in their work hours accordingly.
The time-bound nature of OKR always keeps everyone alert and leaves no space for slacking.
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2 Go for quarterly stretch goals
Goals at LinkedIn are aligned towards stretch goals rather than stated plans because low expectations eventually halt progress in the long run.
OKRs are set quarterly to avoid constant change from week to week and individuals have to set 3-5 personal OKRs in a given quarter. These stretch goals are hard to achieve but constantly pursuing them becomes somewhat of a thrill for employees as well.
3 Allocate specific hours for weekly and monthly meetings religiously
As for meetings, they are held once a week (3hrs), once in six weeks (full day), and twice a year with regular check-ins.
Regular weekly meetings provide a panoramic view of how everyone is getting on with their tasks and ensure that they are all aligned to the same goals.
The leader starts off these meetings with the ritual of instructing reports from staff of one person and one professional achievement instead of diving into business.
This keeps the overall mood upbeat and optimistic.
This practice shows that each individual matters and ensures that employees feel like they can make a real difference.
How does Intel use OKR?
Andy Grove made it clear that OKR is a tool to pace the employee and far from a document used to review their performance. Grove witnessed Intel shift from producing traditional memory storage to being the largest semiconductor chip manufacturer and the world’s seventh-largest company.
Grove saw the need to set OKRs and quantify them and called them “Intel management by objectives” , which is now known as OKRs. He went on to elaborate on the benefits of OKR in his book, ‘High Output Management’ which is a cult classic in Silicon Valley.
Practical Tips from Intel on OKRs
1 Train and Educate the team on OKRs
The most outstanding strategy Intel uses is appointing an OKR champion to educate the team. Providing required knowledge around OKR is important as it makes everyone aware of how to leverage OKR for maximum returns.
OKR champions provide tutorials on framing OKRs and inculcating a healthy culture in the organisation.
2 Patience is virtue while doing OKRs
They emphasize being patient for OKR to work out for them because sometimes it may take a lot of trial and error to nail it. Once the process is perfected, it is safe to go all-in in a seamless and sustainable journey of growth.
3 CFR practice
The three pillars which led to the success of Intel are CFR practice- Conversations, feedback, and recognition.
Using these communication tools, they are able to ensure that employees are always engaged and active. They are able to create a true alignment of OKRs across customers, clients, company stakeholders, and employees.
Translating strategies into actions in Intel occurs by using three sets of OKR- organization OKR, department OKR, and individual OKR.
At all times, they recognize and appreciate individual ownership of ideas and value consensus to create a breeding ground of trust and growth.
Additionally, progress reports are reviewed and graded.
How does Zynga use OKR?
Zynga is a social game developer with the vision of “connecting the world through games”. They use OKR to increase the number of active users and continue surprising users with innovations. In 2011, their Objective was:
Become the #1 iOS poker game. This was a stretch goal because they had many competitors who had an edge over them in everything. But, six months later, this goal turned into reality.
In 2020, Zynga saw its stock price jump by 50% and different articles there such as a Forbes article speculate that it could rise up by about 100% in the next three years.
Let’s find out how Zynga uses OKR to become a fast-growing and formidable company in the field of gaming.
Practical tips from Zynga
1 Prioritizing Individuals
In the Zynga team, employees are instructed to note three priorities of the week.
Then, individual OKRs are coordinated with team OKR. Communication is prioritized and individual roadmaps (OKR) are graded in color.
Reflection sessions are held at the end of the week where employees reflect on achieved and missed targets.
2 Manager as guiding star
In Zynga, the role of the manager is emphasized and prioritized because they serve as a guiding light to lead subordinates.
The manager is responsible to ensure that all employees are on board with understanding OKR and are accountable.
Research showed that Zynga employees received feedback once every week or month and 67% of them revealed that they are given credit and recognition for their achievements.
How does Amazon use OKR?
Frequently referred to as the world’s most valuable brand, Amazon is one of the Big Five companies in the U.S and is ever-expanding.
What started as an online store for books is today one of the Big Five of U.S information technology and the world’s largest marketplace. They leverage OKR and derive the most from it.
According to research, out of 525 employees, 388 reported that they are clear about company goals and invested in them.
The majority of employees shared that they receive positive reinforcement and that they are given recognition and credit for their achievements.
Excellent management and constant delivery of results by employees are reflected in outcomes. Today, Amazon is a $1.799 trillion company.
Proven tips from Amazon on using OKRs
1 Narrowing Focus on What Won’t Change
They set objectives that primarily focus on what won’t change. The factor of ‘what won’t change’ prevents constant shifting of OKR and aligns the company with the larger motive, “introducing a cheaper variety of products that are delivered very fast”.
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2 Implement OKRs in cycles
OKRs are set in cycles- weekly, quarterly, and annual OKR cycles to maintain the vision of a bigger picture. Setting OKR cycles will help distinguish different components and do away with those that do not align with the company.
In other words, it allows Amazon to separate validated strategies from experiments. OKRs assessment is done by the end of the quarter by managers and these review meetings encourage upskilling, clarity, and better performance.
Additionally, setting OKR encourages regular weekly check-ins and tracking results to monitor progress.
3 Pilot your OKR implementation on small teams and cascade later
Different teams in Amazon work on different projects and use OKRs to Maximize growth. Before including a Key Result they discuss if all aspects of the strategy are feasible and if they have the required data to carry it through. If it is an experiment, they run a pilot- test it on a small group.
In other words, OKRs are experimented with within small groups before the entire company is asked to commit to it. This way, they are able to save time doing things that have been tried and tested.
Conclusion
OKR is a great, all-in-one tool to execute business and personal goals. Many budding companies are catching up with implementing OKR to maximize growth.
While numerous factors affect the effectiveness of OKR, the top ones are alignment, transparency, and communication.
Stellar performance and IPOs are not accidental and it takes great effort to execute objectives. OKR is a great and simple tool out there for anyone to take advantage of. So, if you want to emerge as a top player you should follow the success stories of companies who uses OKRs .
