5 myths about Google's management method: OKR

Rather watch a video? Click here!

The popular goal management framework, OKR, originally developed at Intel, has gained popularity as the secret sauce behind Google's unparalleled success. Many companies and start-ups around the world choose to implement OKR to help accelerate their business growth. As popular as OKR has become, as many myths are being told about it. Below, you’ll find the five most common ones, busted.

The acronym OKR stands for “Objectives” and “Key Results”. It’s a way to set and manage goals throughout an organization.

The Objective tells you where you want to go, the Key Results are the results that you need to achieve in order to get there. For example, let’s say your Objective is ‘Improve employee retention’. The Key Results could then be ‘Increase employee NPS from 10 to 50’, and ‘Reduce voluntary employee turnover from 15% to 5%.

The benefits for companies working with OKR include improved focus, better alignment and increased accountability. It helps communicate company strategy to employees in a clear, measurable way. It connects the goals that teams and individuals work on to the higher level goals of the company. And it makes it clear what everyone is responsible for. A tool to love, you might think—bringing us to the first myth:

1. The whole company will love it

An OKR implementation will never be an overnight success, in fact quite the contrary. OKR can be a difficult concept to grasp and can feel like extra work for your employees, especially at the beginning. Thus, introduce OKR not as a silver bullet but as a vegetable. They may not taste great, but it’s good for the organization and will help keep it healthy. And: Introduce it gradually. Essentially, introducing OKR in an organisation is change management. When introducing fundamental change across the organisation, you would want to introduce it step by step.

2. OKRs replace KPIs

A common mistake many organisations make is replacing KPI - Key Performance Indicators with OKR. Imagine your organization is a car and you’re driving that car towards a destination (your Mission & Vision). Your KPIs are what you’ll find on your car’s dashboard, like the fuel gauge and engine temperature gauge. They prevent the engine from overheating and make sure you won’t run out of gas, which are all things that you’ll constantly need to watch. OKRs are like your roadmap, they’ll guide you to your destination. The truth is, OKR and KPI don’t replace each other but are goals that naturally complement each other. OKR provide organisations with the missing link between their ambition and reality. They help to break out of the status quo and take organisations into new, often unknown, territory. Companies with an aspiring vision need Objectives and Key Results that take them there. A KPI, on the other hand, measures the success, the output, quantity or quality of an ongoing process or activity - processes or activities already in place, often called business-as-usual.

3. OKR is an HR tool

OKR is the perfect tool to translate your organization’s long term strategy into short-term goals for teams and individuals. Therefore, it’s not a fancy HR gadget, as many companies tend to think, but is a critical tool for CEOs and executives to help them deliver their strategies and accelerate growth.

To make this happen, the CEO will have to make sure that his or her strategy is being translated into the right KPIs and OKRs for teams and individuals. And he or she would want to make sure that—for the most part—the goals are achieved. Don’t get me wrong: HR plays an essential part in the process when it comes to making sure to educate all employees on what OKR is and how it works. However, the only way to ensure goals are achieved is for CEOs to be heavily and actively involved in the OKR program.

4. It’s only for technology companies

Google, Intel, LinkedIn—you’d think OKR is only for the big, mature tech companies. Far from it—Google implemented the OKR method back in the day when it employed no more than 40 people. At Perdoo, we have customers in 65 different countries, with varying sizes from 10 to 10.000 employees, across many different industries. Any company can benefit from the management tool.

5. You must stretch yourself

Numerous opinion pieces and blogs make us believe that OKRs are inseparable from stretch goals—challenging and likely unattainable. Don’t be fooled—the goals that are right for your organization strongly depends on your organisation’s culture. The truth is that a lot of people tend to hate ambitious targets. If stretch goals work for you, that’s great. If not, just ditch them.

Especially, if you only just started working with a dedicated goal management program in your organization, it’s probably best to wait. It’s already challenging enough identifying what to work on at the beginning of the journey, and stretch OKRs only add more complexity.

Watch video