In 100 words...
OKR is a very simple framework that is used to make performance measurements more useful. In use OKRs comprise an objective - a clearly-defined goal - associated with one or more key results - specific measures that can be used to determine the achievement of that goal. Typically OKRs are defined to run for a short period (90 days or less) and focus on short term / tactical outcomes rather than strategic goals. In some implementations OKRs are cascaded through an organisation down to the individual level, and often all OKR performance is made visible to all in the organisation.
Although it is not clear where they first emerged, OKRs were certainly in use in the 1970s - their use at Intel in that period is recorded in the best-selling management book High output management written by Andrew Grove, Director of Engineering for the firm in the 1970s, which was published in 1983. A salesman working for Intel during the 1970s, John Doerr, became familiar with the framework and later (1999) introduced the idea to the founders of Google. Google took to the idea and it became widely used within that organisation and several other significant internet start-ups during the early 2000s (e.g. LinkedIn, Twitter, Uber).
The idea remained relatively well known but not so popular through until 2016, when the first of a handful of books on OKR was published. More recently (April 2018) John Doerr has co-authored a book on the topic and this appears to have triggered considerable interest in the idea (mostly from software firms). The graph below records interest in the topic OKR on Google since 2004...
How useful are OKRs?
Andrew Grove was clear on the purpose of OKRs in his 1983 book, in his view OKRs value lay in providing unambiguous information on whether short-term goals were being achieved or not:
"The key result has to be measurable. But at the end you can look, and without any arguments: Did I do that or did I not do it? Yes? No? Simple. No judgments in it."
As a mechanism for clearly communicating short-term priorities, OKRs are quite effective: particularly when the number of OKRs chosen is kept to a few. However OKRs do not scale or cascade well - short term goals tend to be quite task-specific, which makes organisation-wide OKRs difficult to define, and difficult for individuals to relate to if their particular tasks or skills do not overlap neatly with the organisational level OKR's topic.
In organisations seeking either to gain operational control, or to achieve long-term strategic outcomes, OKRs are not so helpful - but they can co-exist nicely alongside more typical operational and strategic performance measurement frameworks.
Links to other frameworks
OKRs fit into a standard progression of performance management tools:
- Measures - simply collecting information on an activity or outcome within an organisation
- Measures and Targets - adding information about what level of activity or outcome is required / expected, and usually a time when the required performance should be delivered by
- KPIs - a small number of Measures and Targets that are communicated widely within an organisation as 'priority' performance goals to be considered
- OKRs - KPIs linked to a clear outcome that is the reason why the KPI has been selected
- Balanced Scorecard - a collection of KPIs / OKRs that are linked thematically or causally to provide a more complete picture of the outcomes required for an organisation
- Strategy Execution framework - advanced Balanced Scorecard style measurement systems linked to a clear longer term view of the future state required for an organisation and a set of management behaviours that focuses upon the communication and monitoring of a programme of strategic change - examples include 3rd Generation Balanced Scorecard and Results Based Management systems.
By linking KPIs to longer term outcomes - giving the KPI a 'reason' to exist, OKRs are effective at providing a greater level of understanding about priorities within an organisation. Their relative simplicity and short-term focus means that the can co-exist very neatly with strategic performance management frameworks - so for example you can have Balanced Scorecards at the corporate level and use OKRs for individual goals, but their simplicity makes them less useful on their own for driving complex changes and providing contextual information to an organisation's employees.
To dig deeper
There is a wikipedia entry on OKRs, several books that discuss OKRs and many websites with some information about the topic. Most of the websites are provided by software vendors and so unsurprisingly present a much more complex form of the concept (describing a world where having lots of OKRs is a good thing).
Perhaps the most useful resource to understand OKRs is a 2016 publication made available for free by O'Reilly press called Introduction to OKRs by Christina Wodtke (O’Reilly Media, Inc. 2016 ISBN 9781491960271).