Digital transformations require aligning and joining forces across the organization. In many cases, we find ourselves in highly complex environments where a few individual minds can no longer do the thinking and decision-making. Sooner or later, the workforce must evolve toward more self-organization. Objectives and Key Results (OKRs) are one way to create more alignment and autonomy in organizations, departments, and teams (see Alignment Autonomy Matrix). The method itself is an evolution of Peter Drucker’s classic Management by Objectives (MbO) by Intel co-founder Andrew Grove in the 1970s.
OKR offers the following advantages over traditional target achievement (MbO) systems:
– It is not only defined what is to be achieved (Objectives) but also which drivers are to be used to achieve this goal in the best possible and measurable way (Key Results).
– Compared to the classic target agreement, OKRs are determined on a quarterly instead of annual basis and thus offer more control and steering options as well as better adaptation to changing conditions
- OKRs can be viewed publicly and transparently throughout the company, making it easier to identify synergies
- It is a top-down and bottom-up process, i.e. the employee teams themselves consider how they can make the greatest possible contribution to the company’s strategy, which promotes meaningfulness in the work
– OKRs are independent of compensation, thereby encouraging the formulation of ambitious goals
Benefits of OKR’s include:
– Use resources in a targeted manner
– Focus on important topics
– Orientation to results
– Optimize transparency in the company
