The OKR method, the management tool for transforming companies

Article updated in September 2023

Companies operate in an increasingly complex reality that must be mastered. On the one hand, customer expectations in terms of corporate social responsibility user experience have never been stronger. On the other hand, technological developments and the ability of GAFA and start-ups to adapt to them are changing the game in many sectors of activity.

This context, still shaken by successive crises, places companies in an emergency situation to reinvent themselves, rethink their value proposition, and develop new business models or risk being left behind.« disrupting »Sooner or later.".

This forced transformation requires leaders to fundamentally rethink the way they drive the vision, prioritize and manage the various transformation projects. The main challenge: being in real implementation of the strategic plan on the ground.

To do this, it is necessary to ensure that employees understand the meaning of this transformation, are willing to contribute to it, and know how to do so on a daily basis. Good news! A management tool allows all of this at once: the OKR method:

• O for « Objectives » (goals),
• KR for « Key Results » (Key results)

Where does the OKR method come from?

Strategic management through the OKR method was initiated at Intel in the 1970s by Andy Grove, its CEO and co-founder. Then advised by John Doerr in the 1990s, two young founders of a startup in which he invested… and which would become Google. It is interesting to note that John Doerr discovered this method while attending a conference given by Andy Grove in 1975, and in turn made it the subject of his own book. its own Ted conference on the subject, in 2018. It is no coincidence that twenty years later, OKRs are still used. the main tool for managing the activity from all the employees of Google.

The OKRs are described by their most ardent supporters. supporters as The management method the most effective for define and implement priority objectives of the company, its teams and its employees, while very concretely measuring the results obtained. In this regard, we have drawn inspiration from it for our own sOKRat® support solution.

The definition of OKRs (Objectives & Key Results)

Each OKR consists of an objective and three key results.

How does the OKR methodology work?

«The collaborator no longer works for the goals of his manager but for those of his team and, ultimately, those of the company.»

The power of the OKR methodology The key lies in the fact that OKRs are usable at all levels of the organization. From the top down. It is indeed necessary to set the company’s OKRs, those of the management committee (different from those of the leader) and those of the CoDir members. Then, in a cascade Each team, each manager and each employee can decline their OKRs.

• The company’s OKRs These are the major priority directions on which the CoDir must focus (see our celio client caseAt most 3 in number, they must be a variation, in terms of objectives, of the vision or raison d’être (the Why) of the company.
• Team OKRs They define the priorities of a team but should not be a compilation of the individual OKRs of each of its members.
• Individual OKRs define the tasks each collaborator must focus on.

In a logic of convergence, everyone must be able to explain how their personal OKRs serve those of the team, and how those serve those of the company.

Attention! The Managers' OKRs They should not, however, be a compilation of their team’s OKRs. Managers are naturally encouraged to take a step back to define OKRs focused on the means by which their team can achieve its goals.

Thus, the collaborator no longer works for the goals of his manager but for those of his team. and, in the end, The company’s managers, on the other hand, work to enable their employees to advance the team’s objectives and ensure that Alignment with the company’s OKRs.

The benefits of OKRs in the workplace

Managing a company using the OKR method has many benefits:

1/ Prioritize the company’s issues

The first advantage of OKRs is the need to select and prioritize. The basic rule of the OKR method, which consists of defining only 3 objectives (with each of them having 3 key results), imposes a drastic selection by prioritizing only what is most important. It helps teams stay focused on the essentials.

2/ Facilitate communication with the teams

The objectives, expressed in the form of a sentence, and the presentation of the OKRs as a whole facilitate the communication of priorities among the teams. They contribute to giving meaning to an overall vision.

3/ Aligning the entire company

The Key Results (KR) are, in turn, clear indicators of measuring progress with a time limit. They highlight the efforts to be made and the links between individual goals and those of the company.

4/ Driving the transformation

The dynamic nature of the KR (they are usually replaced every 3 months) allows for extremely efficient management during transformation periods, requiring little downtime. Knowing how to go from vision to execution and therefore to accelerate on the ground.

5/ Developing accountability

Beyond aligning objectives and each individual’s contribution to the company’s goals, OKRs enable the adoption of a management culture that is highly accountable. Indeed, Each collaborator sets his own performance indicators.

6/ Changing management practices

With OKRs, the manager must put himself at the service of his employees to enable them to achieve their performance indicators. The employee is no longer at the service of his boss, But The boss who becomes a resource for everyone.

Good practices and pitfalls of OKRs

• At each level, it is appropriate to Fix 3 OKRs. Not one more, not one less. However, an exception may be considered for the company’s OKRs, which can be presented in the form of a single objective broken down into 3 components. Key Results.
• Where the objectives must express a long-term vision, Key results measure progress towards this goal, not its achievement. (This is one of the The most common OKR errorsThey must therefore be set and reviewed regularly (for example quarterly).
• The logic of construction top-down OKR should allow each manager to communicate to his team the company’s OKRs, the Business Unit or to the management department to which they are attached. This clear and concise vision of the priorities helps each employee to reflect on their own OKRs and submit them to their manager. The final determination of these is ideally done during an exchange between the employee and the manager. If fewer than 50% of the OKRs are proposed by the person who will implement them, this constitutes a sign of malfunction Either the company’s vision and priorities are unclear or have been poorly communicated, or the employees do not understand how they should contribute, or the manager has difficulty in holding them accountable and allowing the necessary autonomy to their teams.
• A KR (Key Result) reaching 70% is not a failure, on the contrary, This means that the company is on the right track. A «good» Key Result It should never be possible to reach 100%! Another equally ambitious target should be set for the following quarter, which will allow us to move towards that goal. However, if the Key Result If it is reached below 50%, it will be necessary to ask whether all means have been put in place to achieve it… but it is also legitimate to ask whether the Key Result It wasn’t simply poorly chosen.
• Finally, it is essential to specify that OKR are a method for guiding activity and priorities. It is in no way a HR evaluation or variable pay tool.