Since 1999, Google has used a system to establish the objectives and key results (OKRs) for every individual and team within the company.
The OKR system was introduced by John Doerr, who is a partner at legendary Venture Capital firm Kleiner Perkins Caulfield Byers, when the company was about one year old.
I don’t need to explain the company’s remarkable growth trajectory since then. So, the system clearly works.
In this Google Ventures video, the system of setting goals it explained in great detail. The video is long at 1 hour 20 minutes, but it’s worth it.
At a high level, the OKR system works like this:
- Objectives should be ambitious. You’ll know they’re ambitious because you’ll feel a bit uncomfortable agreeing to them.
- Key Results are measurable and tangible. Google uses a 1-1.0 scale to grade key results each quarter.
- OKRs are public knowledge across the company so everyone knows what everyone else is working on.
- You’re not looking to achieve a perfect score (1.0) – if you do, you’re not being ambitious enough.
- Low grades should not be punished, rather the data should be assessed to refine further goal setting.
The video goes into much greater detail and will help guide any entrepreneur through setting the right goals for their startup and their team.