Transforming big ambitions into realistic goals and actionable steps is a challenge for any business, especially startups and smaller companies. However, there are some strategic planning tools which can make the process a lot easier.
One notable approach in tech companies, is Andy Grove’s Management by Objectives system, a system he developed during his tenure at Intel which was based on the ideas and principles of Peter Drucker’s work from the 1950s.
Management by Objectives is more commonly known today as OKRs (Objectives and Key Results), mainly thanks to the advocacy of John Doerr who was a former intel executive and took Andy Grove’s system and introduced it to Google.
The principle behind OKRs is extremely simple: “If you don’t know where you’re going, any road will get you there.” OKRs address two fundamental questions for any business:
- Where do we want to go?
- How do we pace ourselves to get there?
Every OKR answer those two questions; the destination is the objective or goal and the key results define the steps or sequence of work required to get there. Typically, key results are put in a logical order and expressed in simple and measurable terms.
Consider a scenario where management aims to give a technical demo of a prototype within three months. To make this happen they break down the objective into five key results which outline the steps to build a prototype. The OKR might look something like this:
Typically there are around four to seven key results per objective. Breaking it down into steps makes it easier to manage and track its progress. It also ensures that the objective is realistic and all stakeholders can easily understand the steps required to achieve the goal.
The OKRs also need to be set to a realistic timeline. This could be quarterly or monthly, whatever is appropriate for the goal. Key results are then reviewed regularly. If any issue arises the stakeholders can agree any course corrections or changes.
Perhaps the biggest strength of the OKR system – and why Andy Grove found it to be such an effective tool at Intel – is its power of focus. OKRs empower teams or individuals to focus on what really matters for the company and ensure everyone is contributing to the overall vision of the business.
For more information on OKRs and how they have helped countless companies with their strategic goal planning, take a look at John Doerr’s excellent website.
Image: Andy Grove, copyright https://www.whatmatters.com
