Why OKR is more suitable for IT companies than KPIs

1. What is OKR

Okr:objectives-key Results

Okrs is a framework for employers and employees to discuss how the work of an individual employee is connected to the Ove Rall business strategy.

Simply put, it emphasizes goal management, combining personal goals with corporate goals, so that the direction of the effort is not aligned with the company's goals.

OKR is not a new way of managing, and John Doerr This theory in 1999, and now Intel, Google, and Facebook are implementing this approach, but there is little discussion at home, although similar ideas can be embodied in management.

OKR has a more theoretical foundation than agile development, a more aggressive approach to management. It was born in Mbo (Management by objectives), SMART (specific, measurable, attainable, relevant, time-bound) this set of classical management theory extension, But combined with the social development and the detailed operation of the refinement, the implementation of the guidance will be stronger.

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2. What is the problem with the KPI?

Kpi:key Performance indicators (key performance indicators)

In the field of sales and production, this package should be more effective, because the output is clear and the process is controllable. But in the IT field, more dependent on people's creativity, KPI definition is slightly careless, it is easy to let everyone in the wrong direction to force. Worse is the KPI is to be pre-defined and performance-linked, which is difficult to define the output, often is the KPI score and then inverted KPI indicators, in addition to the money, it is inevitable that some people will do to do high KPIs, regardless of this approach to achieve KPI or the actual effect on the company's value. In addition, if the KPI is not related to the company's goal is beneficial, the employees are not motivated to do.

Eg: the promotion Department requested to pull the app download, the results of the promotion staff ran to the integration wall to encourage everyone to download, the results actually brought the user is rarely the target user.

There are many articles denouncing KPIs, such as the "evil KPIs". In simple terms, it is difficult to control in the process of practice, prone to problems, and finally, the following phenomena often occur:

The implementation of KPIs is more about restricting mediocre employees in order to improve their executive power, but not to standardize the outstanding talent, many times, the KPI's incentive for the excellent talent, but the negative.

The key to this problem is that the KPI theory itself is flawed. It is to break down the company's goals into several key indicators, that the key indicators achieved will achieve the overall goal, which will cause excessive attention to detail and ignore the whole, so the results of implementation is often the result of the details and deviate from the overall goal. Objectively, it is more appropriate for detail management than for overall management.

3. Key points of Okr

What's an OBJECTIVE? -what I want to accomplish

Objectives should is significant to the company and personally meaningful, as well as aspirational. They should also is aligned and supported by the entire organization.

What is KEY RESULTS? -how I'll accomplish the OBJECTIVE

Key results should is measurable, limited in number and Time-bound.

The explanation is that I have read all the information and I think it is the most concise generalization.

OKR The essence of performance (KPI just deviates from it):

1. Separation of goals from results: Let's focus not only on the results but also on the goals

2. Challenging goals: tend to be more motivated than low goals, and achieve better results.

3. Emphasizing the goal without emphasizing the method: give us the space to play the creative part

4. Consistent goals are better for synergy: Everyone is clear about what matters most, things and methods are easier to work with, and goals don't deviate from

4. Details of the OKR practice

1. 4~6 Objectives

2. Each objective has no more than 5 key results

3. The goal is to be challenging.

4. Goals include routine, challenging, personal growth

5. 60% Okrs from Employees

6. Don't change

7. Peer Review + Manager review

5. Thinking about the relationship between 5.1 okr and performance in the practice of OKR

If you want to make OKR work, then do not link to performance, otherwise no one is willing to challenge the goal, we all want to achieve a more secure performance.

Performance calculation should be based on value result (value orientation), comprehensive evaluation of various aspects of the factors to give a rating, rather than just look at the key Result of the score, of course, this is an important reference.

The relationship between 5.2 Okr and task

The purpose of OKR is to inspire people's creativity, the specific task is more inclined to people's own planning, and even propose innovative solutions. The opposite is the command-style management, all depending on the leadership of the arrangement, often the details of the lack of control.

5.3 ORK Tool

Tools are not important, you can use wikis, sheet and the like, and there are some special tools. But the key is:

• Easy to view each other

• Advertised so that we can do introspection every day.

• Daily, weekly and Monthly review

5.4 The gap between goals and competencies

If you need to achieve the goal, personal ability can not reach, or the goal is unreasonable, or is not suitable for people, training is also one of the goals. But there will inevitably be a need for assistance in the work, this should be the parties in order to achieve the goal to seek help, which is a manifestation of personal initiative.

5.5 Corporate goals and the balance of personal growth

This is not a conflict, in the personal goals are mainly to support the company's goals, but also to include the personal skills to grow the goal, are clearly more conducive to employees know how to work and study.

6. Summary

All along, I personally have been more excluded from the use of KPIs to manage the research and development team, I believe in the internal incentive management, with the staff's self-driving force as the driving force forward. When I saw OKR, the management was more figurative, and that was the way I wanted to manage it.

In the context of today's more personal initiative, OKR should become a more mainstream modern enterprise management concept. (June 1, 2016 children's Day prophecy)

Reference:

• OKR E-book

• How to make Okrs actually work at Your Startup

• The Art of the OKR

• The way of coexistence of OKR and performance

• The evil KPIs

• What is the OKR of Google's internal assessment system?

• What is the difference between Intel and Google's OKR system and what we generally call KPIs?

Why OKR is more suitable for IT companies than KPIs