Why OKR Consist of O and KR? Bright Side and Dark Side of Goal Settings
OKR and Management by Objectives
Management by Objectives is the most commonly used methodology in any knowledge worker industry. Especially in the tech industry, a simple framework named OKR is widely used as the current best practice of Management by Objectives.
Andrew Grove introduced OKR in his book “High Output Management”. The framework is pretty simple. Setup the objectives by the following factors:
- Objective — Qualitative goal to achieve. Typically set as moon shot goal.
- Key Results — Quantitative and concrete achievements connected to the Objective
Here I have to make an interesting question. Why OKR uses these two factors: Objective and Key Results?
Bright Side and Dark Side of Goal Settings
Many people know that goal setting is effective to manage people. However, most of the people does not know its side effect.
There is an article from Harvard Business School which point out the side effect. The article argues the side effect by researching the failure of the objective settings including well-known companies like Enron, or Ford Morter.
The article concluded that goal setting must be prescribed with the following warning label.
They pointed out that too specific a goal results in narrowing focus and achieve the wrong goal. But too big goals result in unethical behavior, taking too many risks, and decrease people's motivation. The goal must not be too specific and not be too challenging.
Why OKR Consists of Objectives and Key Results?
OKR is a very simple framework to take this balance. The objective provides us ultimate achievement. We might not be able to achieve that goal forever but that leads us in the right direction. Key results, on the other hand, provide us concrete action items to achieve. We can feel concrete progress so that we can motivate.
The objective is like the loadstar while key results are milestones. We can never be able to catch the loadstar, but we can make consistent progress aiming to the north. If we picked the wrong milestone, we can easily notice that and we can adjust our next milestone. That is the fundamental power of OKR.