OKR’s: How John Doerr’s Formula Makes Companies Grow

If you set crazy, ambitious goals and miss them, you’ll still achieve something remarkable.

Larry Page, co-founder of Google

Objectives and Key Results, also known as OKRs, is a popular goal-setting framework companies worldwide use to set, track, and achieve their strategic objectives. In the last two decades, this framework has revolutionized how businesses set, pursue, and measure their goals. It’s based on aligning company, team, and individual objectives to measurable results, ensuring everyone moves in tandem towards a shared vision.

In this article, we will explore:

• The origins of the OKR framework;
• The core principles and basic processes of OKRs;
• How the OKR framework helps you manage the company;
• How to begin the OKR implementation in your company.

The Brief History of John Doerr’s OKRs

If you are already familiar with the OKRs, you might notice that the title of this article is a bit of a misnomer — John Doerr did not create OKRs. This honor belongs to Andrew “Andy” Grove — the first director of engineering and a founding member (though not a founder) of Intel. It is hard to pinpoint the exact date of OKR development — all we know is that Grove, inspired by Peter Drucker’s Practice of Management, first implemented it in the 1970s. The framework was first made public in 1983 Grove’s book High Output Management.

Andy Grove (left) with Intel founders Robert Noyce (center) and Gordon Moore (right), 1978. Source: Wikimedia

So… why are we talking about John Doerr OKRs instead? While Grove established the foundation for the framework, his OKRs were not universal. They fit the demands of Intel and worked exceptionally well, but to our knowledge, he never attempted to expand the OKR framework outside of the company.

This is where John Doerr comes in. Doerr started as a salesman at Intel, working directly with Andrew Grove and embracing many of his management practices, but he had grander ambitions. So he left Intel for Kleiner Perkins — a venture capital company — and by the 1990s had become one of the most influential people in Silicon Valley. One of the companies Doerr paid the most attention to was Google — and that’s how he eventually inducted Larry Page, Sergey Brin, and Eric Schmidt into the new OKR project management style. 

John Doerr on the cover of Institutional Investor for June 1996. Source: Institutional Investor

The rest, as they say, is history. Google’s alumni eventually spread the OKR system across Silicon Valley and outside the IT industry. And the framework’s popularity got an even more significant boost when Doerr detailed the success of Google and other companies that use OKRs in his book Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs.

We highly recommend you check out Doerr’s book if you can spare time. While we will briefly introduce the OKRs, Measure What Matters goes into extensive detail and explains how the framework works and why certain aspects of it are the way they are. Alternatively, check out John Doerr’s OKR portal, where he and his team collect all the best practices and success stories.

What Are OKRs, and How Do They Work

As we said, OKRs are a goal-setting and performance management framework. The basic principles of it can be explained in a single line: “I will [Objective] as measured by [Key Result].”

• Objective represents what you want to achieve. It should be clear, actionable, and qualitative, giving you and your company direction.
• Key Result defines how you’ll measure the progress toward the objective. It is quantitative, specific, and often time-bound.

Key Results are supposed to be measurable. In Steven Levy’s In the Plex: How Google Thinks, Works, and Shapes Our Lives, he quotes Google’s ex-president Marissa Mayer: “It’s not a Key Result if it doesn’t have a number.”

Here’s an example of Marketing OKRs, which follow this principle:

• [O] Enhance our company’s online presence.
  • [KR1] Increase monthly website traffic by 25%.
  • [KR2] Grow our social media followership by 15% in 3 months.

As you can see, these Key Results directly support the Objective and show how to progress toward it. Of course, there’s more to it — there always is. And if you want a slightly deeper dive into the fundamentals of OKRs, check out our 16-minute video crash course “What is OKRs in Business”:

By the way, if you are interested in more Marketing OKR examples, we detail them in our Marketing OKR Examples article — and if you need OKR examples for other industries, check out the OKR Examples category!

The Benefits of OKRs

OKRs are a project management framework that focuses on aligning the company around the same goal and improving employee performance by making them more motivated and involved. Here’s what a properly implemented OKR methodology brings to the table:

• Enhanced Alignment and Focus. The main benefit of OKRs is aligning every aspect of the company around the same set of Objectives. They ensure that every team, and every team member, are working together and understand the goals the same way.
• Agility and Adaptability. Traditional annual goals can become obsolete mid-year, given market fluctuations, technological advancements, or global events. OKRs, often set quarterly and more agile by nature, offer organizations the agility to adapt.
• Increased Transparency. OKRs are supposed to be transparent — any employee should be able to see what everyone else is doing, at least in basic terms. This helps people understand their importance in the system.
• Fostered Accountability. This stems from transparency — by seeing the impact of their work, people are inclined to be more diligent and responsible for their fields of expertise. This, in turn, furthers accountability and promotes creativity in achieving their goals.
• Amplified Engagement and Motivation. Transparency and Accountability make people more diligent and motivate them to work better since the employees have a sense of responsibility for their work.

Of course, OKRs are not the only way to achieve these benefits; however, they offer the most comprehensive package compatible with most other popular business practices. Most of those practices were built around OKRs and are meant to complement them anyway.

How to Implement John Doerr’s OKRs in a Company

Doerr’s improved OKR process can be broken down into three equally important stages:

• Setting OKRs;
• Tracking OKRs;
• Reflecting and Resetting OKRs.

If you looked at it and said, “Wait, that’s just Agile in a trenchcoat and a top hat!” — you are half-right. Agile and OKRs often follow similar principles — although for different reasons. For those who want to know more about their interaction, we recommend Empowering Agile Methodologies with OKRs by our partner Valyantis.

With that cleared, let’s get back to the OKR process and explain each stage in more detail.

Setting OKRs

The process begins with the leadership setting the yearly Company-level OKRs. These OKRs are then used as a foundation for the annual Department, Team, and Individual OKRs — then those yearly OKRs are broken down into quarterly and monthly.

You should check out our definitive guide to OKR Alignment and Breakdown to learn more about this process stage. But if you need a quick primer on setting OKRs, here’s the down-and-dirty version.

• The C-level executives discuss the company’s Vision and Mission statements.
  • The Vision describes the company’s future state and should act as a guideline for the corporate culture, market positioning, and branding.
  • The Mission describes the company’s business, whom it serves, what it does, its objectives, and its approach to reaching those objectives.
• With Vision and Mission in place, the executives use them to define up to three Objectives the company is setting out to achieve in the next year.
• For each Objective, the executives define a set of one to five Key Results that determine the completion of the Objective. Those Key Results are meant to be ambitious but at least theoretically achievable.

You then repeat the process on lower OKR levels and timeframes, ensuring the company remains aligned. Just keep in mind that OKRs are not doctrines delivered from above — instead, they should rise from the lower ranks of your company. 

Tracking OKRs

One of the critical aspects of the OKR (Objectives and Key Results) framework is its emphasis on tracking and monitoring progress. Unlike traditional goal-setting models that can be static, OKRs are dynamic, ensuring not just the setting but the active pursuit and measurement of objectives. 

OKR Board for Jira allows you to track OKRs based on the Jira task statuses

Tracking OKRs effectively is pivotal to the framework’s success and ensures the alignment of individual, team, and organizational goals. Here’s our checklist on how best to do it:

1. Use OKR Software. You can track OKRs in Google Sheets or Excel, but it is a bad idea. We can say a lot on the subject, so check out our OKR Dashboard Guide to understand the differences using OKR Board for Jira makes.
2. Set Up Regular Check-Ins. We recommend a dual cadence — weekly OKR Reviews and monthly OKR Deep Dives. Reviews are short 15-to-30-minute meetings to pulse check on everyone, while Deep Dives is a place to share insights and course-correct.
3. Encourage Open Communication. OKRs are not KPIs — seriously, we have a whole article on the subject. And one distinguishing characteristic is that OKRs are set by those who will accomplish them — not descended from management. So ensure your employees have a voice during OKR discussions and their opinion is respected.

The critical element of OKRs is transparency which helps your employees stay motivated; they need to see that everyone else is putting in work. So the more detailed and transparent your tracking sessions are, the better — but remember to keep them concise.

Reflecting and Resetting OKRs

At the end of the OKR cycle, typically a quarter or year, teams come together to reflect. This introspective phase allows organizations to learn, evolve, and adapt, ensuring they stay agile and relevant in an ever-changing business landscape. It involves:

• Scoring: Each key result gets a score between 0 (no progress) to 100 (fully achieved). An average score is then calculated for the objective.
• Reviewing: Discuss what went well, what didn’t, and the reasons behind successes or failures.
• Resetting: Based on reflections, set new OKRs for the next cycle. Some objectives might continue, while others could be adjusted or replaced.

Scoring and Reviewing are your opportunities for reflection. During them, you can offer insights on what worked and what didn’t, investigate why everything ended up the way it did, and recognize achievements. If you are following the Agile philosophy, you should be familiar with this process.

Resetting is an interesting one. Transferring unachieved Objectives directly into the next OKR cycle is considered bad practice. At the very least, you need to re-evaluate this Objective and see if it is still worth going for. We recommend adjusting Objectives and Key Results quarterly to align with new Company priorities.

How John Doerr’s OKRs Make Companies Grow

If you want to study the impact of OKRs on companies that implement them, you need to go to the source. No, not Doerr’s efforts with Google — while they are by far the most famous, Google never really disclosed how big of an impact OKRs made for them. For Google, OKRs are probably not about productivity — alignment and transparency are far more crucial and harder to achieve.

So, instead, let’s go further back to Intel in 1979. Andrew Grove has just been appointed the president of Intel, John Doerr has just started considering leaving for Kleiner Perkins, and Motorola’s new 68000 microprocessor is taking the world by storm.

Yes, Motorola – not Intel. The 68000 completely wipes the floor with Intel’s brand-new 8086. It is so bad that regional sales managers call Grove’s office to complain and ask, “What exactly is Intel going to do about it?”. 

Operation Crush

Competing on the engineering side is impossible — microprocessor development takes years, and Grove needs a solution now. Intel still slaps together 8088, but it is barely an upgrade — and in some aspects, is even worse. But perhaps, there is another way to compete — Grove decides to beat Motorola by completely revamping the Sales department with what he calls Operation Crush.

The letter Andrew Grove sent to the team leads involved in Operation Crush

Grove already has the experience and had been test-driving what will become OKRs in the Engineering department. Now, it’s the Sales turn. He sets up Crush Teams — groups of experienced Intel marketers and salesmen who will not wait for commands from above. Instead, they are given nearly complete independence as long as they own their Objectives and achieve their Key Results.

One of the OKRs for the early stages of Operation Crush

Given a nearly impossible task, Crush Teams start brainstorming and quickly arrive at a solution — stop selling to programmers and start selling to CEOs. Because while a programmer would know that 68000 is a better deal, the CEO is the one who will decide at the end. So the Crush Teams not only advertise; they flatter, lie, cheat, and bribe — all to hit their OKRs. They quickly adapt directly on the ground, switching marketing campaigns like gloves and always looking for the hook to get them the sale. And as more and more companies switch to Intel x86 architecture, they create software for it — software that doesn’t exist on Motorola, further depreciating its value.

The IBM Deal

Motorola tries to fight back — but being a traditional Japanese company with a very rigid hierarchical structure, it simply can not turn on a dime like Intel. A famous quote is attributed to one of the Motorola salespeople: “I couldn’t get a plane ticket from Chicago to Arizona approved in the time Intel took to launch their campaign.” It’s hard to say whether the quote is genuine, but it reflects the situation.

And then Motorola can’t do anything anymore — because one of the customers who got “crushed” by Intel is IBM. And IBM leadership likes 8086/8088 so much that they are developing a new line of computers. They are calling them Personal Computers, and their goal is to eventually get such devices to every household in the US with a new user-friendly operating system developed by Microsoft.

The End of Chip Wars

Motorola 68000 remained on the market until 1994, and several crucial systems built on it are still in use — after all, it was a spectacular microprocessor that far outperformed the competition. But the proceeds from 8086 sales made during Operation Crush and the deal with IBM catapulted Intel into an entirely different bracket.

Grove did not only get his $100 million in revenue over three years — he got much more. By 1983 Intel’s revenue went from $660 million to over $1 billion, which became $3 billion by 1990. Intel completely demolished Motorola and any other competition and decisively won the “Chip Wars.”

So if you are wondering how OKRs can help companies grow — here’s your answer. They can supercharge the Sales department and turn a disaster into an impossible victory, making an underdog the de-facto monopolist.

And if you want more current data on OKR effects, check out Oboard’s case studies — particularly, how we helped Vista achieve Goal Transparency!

Conclusion

The OKR framework, rooted in the principles laid down by Andrew Grove and amplified by John Doerr, has revolutionized the business landscape. By focusing on aligning company objectives from the top down and promoting agility, transparency, and accountability, OKRs have enabled organizations to drive substantial growth, fostering a culture of continuous improvement. 

The OKR framework’s core strength lies in its adaptability. From Intel to Google and now businesses worldwide, the reach of OKRs is vast and varied. Whether you’re a seasoned business owner or a budding entrepreneur, embracing OKRs can catapult your venture to new horizons. And in this ever-evolving world of business, the direction, agility, and alignment that OKRs provide make all the difference.

That said, while the OKR method is simple, it can be tricky to implement — especially if you are not using the proper tools. So when introducing OKRs to your workspace, consider not making an expensive mistake and check out OKR Board for Jira. It is the #1 tool on the Atlassian marketplace and will make your OKR journey much easier, helping you embrace the best parts of OKRs without getting dragged down by the overhead.