Unlocking How Google Sets OKRs
For years, Google has made headlines for being a key leader in so many things – innovation, revenues, growth and expansion, people management, and leadership. There’s no wonder why so many people love to seek work opportunities at Google, thinking that by the time they leave the company and start a tech business on their own, they would be able to manage their own companies like Google does.
Google is not only known for its innovative products and services. The company is also known for their work practices. Speaking of which, one of the most popular management frameworks that Google use is the Objectives and Key Results (OKR).
It’s a goal-setting methodology that has played a key role in the company’s rapid success. In fact, when it was introduced to the company by John Doerr, Google has only about 30 employees. The company was really small and new. In addition to these brilliant employees, they had nothing but ambitious dreams.
Larry Page, the CEO of Google, used this powerful tool to support his goal of growing the company 10X. That was a highly ambitious goal, almost impossible to achieve. But through OKR, the company was able to find its path towards their ultimate goal, and even exceeded it!
So how does OKR work? Learning how Google sets OKRs is one of the best things you can do to drive growth, productivity, and engagement in your company.
But before that, let’s have a quick discussion about OKRs.
OKR stands for Objectives and Key Results. Objectives basically state the “WHAT” – the goal of the company or where it is headed. Under each objective is a set of key results which basically determine whether the company has achieved its objectives or not.
The key results must be specific and scalable. They shouldn’t be misconstrued as “tasks”. They aren’t simply a “to do” list that talks about what a company, team or person has to do. Rather, they should be the results of these smaller tasks.
How to Set OKR Like Google
Google believes that the power of OKRs is far-reaching and transformative. And more importantly, they help improve performance.
Check out these tips in order for you to set OKR like Google:
Limit your objectives.
Having too many objectives is counterintuitive. You don’t want to spread yourself thin. It hinders your team from focusing and keeps your employees distracted. In Google, each employee – from the CEO down to the level-one employees, objectives don’t go above 5 items. There should also be a maximum of four key results under each objective.
OKRs need to be measurable.
It is very important that your OKRs are measurable. In Google, OKRs are graded using the scale of 0-1. However, getting a perfect “1” is not the goal. In fact, if you get this score, you’re not nailing it. At Google, it means you are setting goals that are too easy. You’re just sandbagging it.
The best score would be between 0.6 to 0.7. When setting goal, Google encourages teams to go out of their comfort zone. If achieving such objectives make you feel a little uneasy, you are on the right track.
OKRs have to be visible.
One of the key features of OKRs is that they drive transparency and accountability. More importantly, they drive collaboration between teams. At Google, everyone knows what everybody’s OKRs are. They can access it anytime through a centralised database. Even bottom team members can see what Larry Page is working on, and vice versa. This way, teams and individual employees will know what help to offer and when.
50% of organisational objectives need to come from bottom-up.
In Google, managers don’t tell their members what to do. The company believes that giving employees accountability on their contributions drives engagement. Google has a unique and effective hiring process that lets them choose the best, smartest people. Being confident in their capabilities, Google believes that employees have different perspectives on what the business needs. OKR-setting in Google is multi-directional and puts more emphasis on employees’ feedback.
OKRs can be personal.
Your OKRs may not be purely reflective of the organisational goals. Especially when it comes to team-member levels, managers encourage their employees to set a goal for themselves, whether it’s adopting a new time management habit or pursuing their passion.
They should benefit your employees.
There’s no doubt that OKRs bring tremendous OKR benefits to your organisation as a whole. However, it should also help your employees. This framework encourages discipline by encouraging people to set challenging goals and work hard to achieve them. It teaches them to focus and get less distracted when working on their goals.
Managers need to work closely with their team members.
In Google, managers conduct 1-on-1 coaching sessions or check-ins with their team members not only to monitor their progress but also to guide them. Through coaching sessions, both the manager and the member can openly discuss what the latter wants to do and what the company wants him to do. This also ensures alignment.
OKRs are not performance measures.
OKRs are not scorecards that can be used as the basis for a salary increase or promotion. While OKRs help managers assess how much an employee contributes to the overall goal of the company, they should not be used as performance measures. However, OKRs can be used as a basis for recognition. This drives even more engagement as employees would feel appreciated for their hard work.
OKRs need to be cascaded properly.
Cascade OKRs by mapping them across organisational teams and structures. As the leader, you want to make sure that each of your teams and business units has the competencies and resources they need to achieve their objectives.
Google aligns their employees with the organisational goals through the SMART model. It is important for managers to guide their members, in the form of coaching and in-depth training, in order to set them up for success.
Are you ready to take your company to the next level? Be sure to follow these best practices from Google. For more insights, check out the Google OKR video that was watched over 250,000 times!
That was way beyond what’s considered ‘viral’ in business videos. Also, don’t forget to take our Organisational Mastery Quiz to further uncover the areas that you can improve to help your teams perform at their very best.
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