Wednesday, January 30, 2019

The productivity tool – Smart. Simple. Effective

OKR? KPI? Does this sound like a recalcitrant teenager deigning to speak to you? In reality,
it is a tool used by more than hundreds of the most successful companies in the world.
OKR Objectives and Key Results is a concept invented and utilized by Andy Grove
of Intel and soon enough it spread like a forest fire that now has a portfolio of the most
successful companies.  Accenture, Adobe, Amazon, Google, Intel, Facebook Dell,
Dropbox, LG, LinkedIn, Microsoft, Netflix, Panasonic, Mozilla, and many more
organizations use this handy tool as a booster for their businesses.


OKR is basically two things: What is it that you want to achieve? What has been your
progress towards your goal? The first thing to do is to clearly envision the objectives of
your company. Keep in mind that different companies will have different objectives and
that objective of a department may vary from the objective of another. All one needs to
do is declare what they are setting out to do and they must ensure that it lines in with
their motive and business operation. The most important rule is to keep the objectives
relevant and achievable at the same time. The second part is to track progress. This is
where key results come in and it also has a couple of rules on its own, the first being
that the results considered must be relevant to the objectives, and the second being,
that it must be measurable. But for OKR to be actually effective in putting the business
where it wants to be, one must ensure that the objective is relevant and important for the
growth of the company and that the KPI chosen is also relevant.  
Just like every other field on earth, businesses too, have their own benchmark for their
performance. Key Performance Indicator is a scale used for the company to measure
its own performance. This is not a comparative tool. It does not it one company against
another. It only indicates how much of its objectives the company has managed to attain.
It is an internal performance measurer and not one conducted by an external body to
compare the company with another entity.  KPI can be Qualitative or quantitative. It can
be customer satisfaction, stock prices, annual turnover or anything else the company
wants to attain. KPI is an indicator and not a predictor and hence it is used for values
obtained in the past. Grove also mentioned that the results were not meant for judging.
KPI is only a measurement tool, not a castigation or a laudation tool.
Having known the basics lets go for an OKR vs KPI. KPI is an integral unit of
OPR. OPR is Objectives and Key results while KPI is the Key results mentioned above.
They are one and yet at the same time different. This dichotomy is not so baffling if one
thinks about it. Objectives are targets set by the organization that is, goals that the company
aspires to achieve in the future while Key Results are the process already achieved to that
end by the organization. Hence While OKR encompasses both past and future
elements, KPI is exclusively affiliated with the past.
One can compare it to a chicken and its leg, while the leg is a part of the chicken it is not
the same as the whole chicken. Here, OKR is the chicken while Objectives are one of its
legs and KPI the other leg.
Objectives and Key Results

                     Objectives    Image result for chicken      Key Results Indicator
Hence, we can see that okr objectives and key results go hand in hand. Another way of illustration is to imagine a map app as anyone who owns
a smartphone has probably used it at least once. The objectives being the destination while
the Key Progress Indicator is the marked part of the route already covered. Objectives and
Key Results is the map itself. In real life, OKR also helps one read between the lines to
figure out any problem and how to reach the target by clearly showing the goals and progress.

It is an utterly basic and yet amazingly effective tool for progress. No wonder it is used by
so many companies. Perhaps it should be renamed as Windex!