What Is the OKR Method – Is All That Glitters Really Gold?

In 2018, only some people had heard of the OKR method. Yet, within just a few years, it became one of the most talked-about management tools. But is everything about OKRs really as golden as it seems? Can they genuinely deliver the transformation many organizations expect?

Let’s look at the OKR method to see if all that glitters is gold.

OKRs: Silicon Valley’s Golden Tool for Success

The OKR method didn’t originate as a trendy management tool – it has its roots in the 1970s when Intel’s then-CEO, Andy Grove, needed to make the company more competitive. At the time, Motorola was rapidly catching up, and Intel found itself lagging behind, weighed down by its past successes and lacking the agility of its competitors.

In response, Grove introduced what would later evolve into OKRs, though they weren’t called that then. (OKR stands for objectives and key results)
The basic principles he established were simple yet revolutionary:

1. Complete transparency of goals, from the executive board to the most junior staff
2. Absolute measurability of progress through clearly defined Key Results
3. Encouraging ambitious goals (Objectives) that stretched the company beyond its comfort zone

The focus on ambitious Objectives was a radical departure from traditional goal-setting methods like SMART, which emphasize setting realistic and specific targets. Grove realized that realistic goals weren’t enough – not if Intel wanted to outpace the competition.

This shift allowed Intel to make an impressive turnaround. In fact, a Motorola executive famously admitted, ‘What you guys at Intel can achieve in three days now takes us weeks or even months.’

From that point on, Intel transformed from the underdog into the leader. In the process, Grove created a system that would become one of the most effective goal-setting methods in modern business: OKRs

OKRs: The Magic Wand for Leadership?

With stories like Intel’s, it’s no wonder OKRs are often seen as a magical weapon for leadership. But are they really?
The answer is yes and no.

• If OKRs are just used as a new way to repackage or rename old (dysfunctional) processes, they will bring about little change. 
• Organizations that are already performance-driven and goal-oriented will see improvements in focus and alignment, making them even more effective. 
• OKRs can turn a well-functioning organization into a highly efficient machine with clear priorities and excellent execution.
• For organizations that have struggled to hit their goals or have yet to adopt a strong execution culture, OKRs can only deliver results if a fundamental change in mindset is implemented while leveraging OKRs.

This is where many organizations struggle, and OKR projects fail. More on that in my next blogpost.

The Key to Success: OKRs Require Focus and Discipline

The OKR method isn’t just about setting goals. For OKRs to truly be effective, the following principles must be embraced:

1. Limited Objectives: The OKR method requires focusing on just a few highly relevant goals – typically no more than 5 Objectives at any given time. This forces teams and organizations to focus on what matters most and avoid being pulled in too many directions. Which requires the skill to say ‘no’ to other topics.
2. Transparency is Non-Negotiable: Every OKR must be visible to everyone in the organization. This radical transparency ensures that every employee understands their individual goals and how their work contributes to the company’s overall strategy. It prevents teams from working in isolation and promotes alignment across the organization.
3. Frequent Check-ins and Honest Reporting: OKRs are meant to be reviewed regularly – typically every month. These check-ins ensure that progress is tracked, obstacles are addressed early, and adjustments are made as needed. But this only works if organizations foster a culture of honest reporting. Teams must feel safe admitting when things aren’t going according to plan. 

When these principles are applied, OKRs can deliver transformational results.

How OKRs Drive Collaboration

When organizations embrace OKRs, they stop viewing planning sessions as fights. Instead, these meetings become collaborative discussions where teams work together to support each other’s Objectives.

In organizations with this mindset, cross-departmental collaboration flourishes. Teams no longer work in silos. For example, if the marketing department has an Objective that requires IT support, they won’t wait until the last minute to involve IT – they’ll collaborate from the start. This ensures that resources are allocated appropriately and that both teams’ OKRs are aligned.

This kind of proactive communication is key to OKR success. It’s not about waiting for other departments to fall behind or blaming others for missed targets. It’s about working together to achieve shared goals.

Due to the transparency of OKRs, teams can see early on if another team embarks on a journey where their support will be necessary later. But instead of waiting for this moment to come, they discuss it upfront – either to ensure the required resources are available or inform the other team that there will be a resource bottleneck. 

OKRs: A Recipe for Success?

So, are OKRs a recipe for success? In principle, yes. But only when they are used correctly.

Organizations adopting OKRs with the right focus, discipline, and transparency will significantly improve. They will benefit from:

• Clearer priorities and sharper focus on the goals that truly matter
• Better collaboration between teams, thanks to the transparency OKRs bring
• More accountability as progress is tracked regularly and openly discussed

However, it’s essential to recognize that OKRs aren’t a one-size-fits-all solution. There are areas of every business – such as highly routine functions – where OKRs might not make sense. Trying to apply them across every department can lead to frustration.

Avoid Turning OKRs Into a Performance Management Tool

Another common mistake is using OKRs as a performance management system. The moment you tie OKRs to bonuses or other financial incentives, you risk losing the ambition that makes OKRs so powerful. Why would employees set ambitious goals if their paycheck depends on hitting those targets?

OKRs should push teams to aim high and think beyond the obvious and the easy. Tying them directly to financial rewards creates a culture where safety becomes more important than ambition. Instead of reaching for the stars, teams will set safer, easier-to-achieve goals to ensure they hit their Key Results.

Organizations looking to link performance management with OKRs should seek advice from experts who understand how to balance the two.

Conclusion: Is All That Glitters Really Gold?

The OKR method offers incredible potential – but only when used correctly. In the right hands, with the right mindset and discipline, OKRs are gold. They can help organizations focus, align, and achieve ambitious goals that were once out of reach.

But without the right foundation – transparency, focus, and collaboration – OKRs can quickly lose their shine. They become just another management trend that fails to live up to its promise. My OKR 101 online course (with 40,000+ learners) enables you and other OKR users to leverage OKRs correctly from day 1.

So, while the glitter of OKRs is real, it’s up to each organization to uncover the true gold that lies beneath.