The content of this article is excerpted from the "Management Practice of OKRs in Small and Medium-sized Internet Companies" shared by Fan Huaiyu, the co-founder of "Qingmang" at the 6th Global Software Case Study Summit, focusing on sharing: the definition of OKRs, suitable company types, Instructions. (PPT + manuscript).
Fan Huaiyu graduated from Tsinghua University and joined Wandoujia in 2011. He was responsible for the design and development of Wandoujia Windows 2.0, Wandoujia cloud service and other products, as well as the architecture design and development of Wandoujia's multiple mobile products. Focusing on mobile development for more than ten years, he has a lot of experience in the mechanism and application development of Android, and is the author of the book "Android Development Essentials".
Editor's note: From November 9 to 12, 2017, the 6th Global Software Case Study Summit hosted by msup was grandly opened at the Beijing National Convention Center, and the 2017 "One Hundred Cases List" was interpreted on the spot. Fan Huaiyu, the co-founder of "Qingmang" at the time, brought a case sharing of "OKR's Management Practice in Small and Medium-sized Internet Companies".
[Introduction] OKR has now become a word often used by team managers in technical enterprises, but how it is defined needs to be understood in detail. In addition, its characteristics, scope of application, and applicable teams are all in our hands. What can be learned after reading this article, through Mr. Yu's dismantling of the cases of Qingmang and Peadoujia, can help us clarify the misunderstanding of OKR use and master the skills of using OKR as soon as possible.
1. What are OKRs?
OKRs is the abbreviation of Objective Key Result, translated into Chinese namely: Objective and Key Result. As the name suggests it is a goal management tool.
management by objectives
OKRs for Everything
OKRs are not only suitable for companies, but also for individuals and any project. For example: I want to study, lose weight, work, etc., I can use OKRs to determine goals and follow up; families can be regarded as small-scale companies, and OKRs can also be used to determine goals for travel, meals, raising children, etc. and further management.
OKRs for family travel
If we want to formulate OKRs for family travel, the goal is to fully experience Beijing's long cultural history. Objective is not quantitative, but the description is relatively clear. Dividing Beijing into a part of cultural history is one of the many reasons to go to Beijing; the time to fully experience it is relatively abundant. If you split it up, you will find a lot of Key Results, and we will list all the possibilities. . For example: visiting scenic spots, eating time-honored brands, watching Jay Chou concerts, etc. Watching the concert is a part of Beijing, but it has nothing to do with the goal of this trip. We can choose to watch it, but don't put it in the Key Result.
OKRs VS KPIs
OKRs and KPIs are both tools in themselves, there is no difference between them, but the company culture and thinking behind them are different. For KPIs, they are more concerned with the execution of goals, and the measurement requirements for execution are very precise. OKRs focus on goals and the process of making them, as well as the processes and methods for operating the goal process. If used as a performance tool, it is likely to be a very poor tool.
communication tool
OKRs not only manage goals, but are also very good communication tools.
OKRs for buying a car
If we go to buy a car, we will hear a lot of words when we go directly to the store, 8 oil per 100 kilometers, less than 200,000 yuan, and good price/performance ratio. It sounds like a lot of goals were met, but after buying it, I found out that one of the conditions was not ideal because we didn't have clear goals and adequate communication during the formulation process. If the family wants to buy a car, each member has a different perspective, which requires everyone to communicate in a timely manner. Put your ideas on paper, and finally establish the goal of buying a car through Objective.
communication
OKR is a communication tool, it needs transparent enough information, and the efficiency of communication depends to a large extent on information transparency. At the same time, information symmetry is also a prerequisite for efficient communication.
Communication must be two-way, and opinions must be thrown out. Everyone’s voice needs to be heard, and constant adjustments should be made according to these voices to reach a consensus.
From a tool perspective, OKR is a goal management tool. First of all, it is not only applicable to individuals, but also to families and companies. Secondly, if viewed at a team level, it is not only a goal management tool, but also a communication tool, which can promote the communication of the team and the whole company.
2. What kind of companies are OKRs suitable for?
Features of OKRs
OKRs facilitate everyone’s thought process during the communication process. OKR is spread out, and in a large scale, it is a bit like a map process. When everyone executes it, they have a consensus on the direction, results and priorities. In the internal and external environment, can quickly make priority judgments and implementation decisions. Goals are clear and progress is measurable. The biggest disadvantage is that the communication cost is high, and continuous communication is required from the beginning of execution to the final operation.
The image below is a traditional four-quadrant graph. The horizontal axis is the CUA, the ambiguity of the company's external conditions, from low to high. The left changes slowly, the right changes faster. The vertical axis is the source of driving force for employees. First of all, to achieve maximum self-satisfaction, with personal interests as the core, and secondly, team interests as the core.
If the company is placed in different positions in the four quadrants, the external environment in the upper right corner is the most challenging, and employees are very self-centered. For the company, if the employees are not united in a challenging scenario, the company is likely to face the risk of bankruptcy.
The external environment in the upper left corner is very certain. For example, when we order takeout, we will give money for a few orders. Employees also focus on their own interests and do not care about the development of the company. They only care about their immediate interests. This method is not suitable. OKRs.
The challenge in the lower left corner is relatively certain. For example, Didi or other taxi companies have relatively stable external environment. The company hopes that the interests of employees are related to the long-term development of the company. KPIs and other means will be better managed.
The lower right corner is to enter a new field with great external challenges. The company hopes to have some long-term interests bound with the team, and each member needs to focus on the common interests of the team. Only when the team succeeds can everyone succeed. To deal with changes in the external environment, using OKR will make the problem clearer.
suitable company
The traditional OKR comes from Google. A large company like Google that continues to innovate will always challenge unknown problems. This process requires the maximum value of talents and is bound to the company's long-term interests, so the OKR method will be used. Small and medium-sized Internet companies are also particularly suitable for the OKR method, because everyone strives for the long-term value of the team. In addition to the continuous innovation of large companies and small and medium-sized Internet companies, OKR can also be used locally in the company.
Employee Freedom
We judge whether a company is suitable for OKRs, and the criteria for judging come from the freedom the company gives its employees. The long-term interests of employees and the company are bound and positively correlated. The greater the freedom of employees, the stronger the positive correlation of bound interests, and the more OKR tools should be used.
3. How to use OKRs?
From company to individual OKRs
process
First, you need to be transparent. When Wandoujia first used OKR, it tended to be bottom-up. Every half a year or every quarter, the company's entire operation status, data system, code system, etc. were compiled into a very large document and sent to employees. The company's vision is described in the document, and employees can edit their new viewpoints and views online during the reading process. With OKRs, more perspectives can be obtained, we aggregate the OKRs of all employees, and finally get the OKRs of the entire company.
In this process, two things will happen. The first thing is to abandon some OKRs that have nothing to do with the company. The second thing is to create a directional collective effort due to the joint efforts of everyone. There will also be some problems with the generation of brainstorming, and the process will be changed to top-down. Finally, iteratively, the company can throw an OKR first, and in the process of writing, you can discuss why the OKR is so determined. When the company formulates OKRs, all employees communicate with each other. This process is very long. After the OKRs are finally determined, the manuscript can be finalized.
structure
Every KR must be covered. KR1, KR2, and KR3 in the lower right corner are covered. If there is no O to point to KR, there will be no employees to think of a way to do this. We better figure out which KR our Objective embodies.
It is excellent to have a preliminary understanding
of the Objective that OKRs can only reach out to touch. Objective must have challenges. If the challenge is small and the goal is too easy to achieve, we don't need to find a way to support Objective. Therefore, the Objective challenge is higher, which also reflects the reason why it is not a performance appraisal tool from another aspect. If the goal is set too high, it will make employees lose confidence, so the Objective that can be reached is good.
The company's Objective must be consistent. The Objective of each month is not related to the Objective of the previous month, or each quarter, and the communication cost will be very large. So when writing company OKRs, try to maintain consistency and keep running in one direction.
For example, our company needs 50,000 users in the early stage of developing new products. We set that we must develop these 50,000 users through word-of-mouth communication. The most important thing is to build word of mouth. 50,000 users is just a baseline. Whether or not the previous one is written depends entirely on the importance of the matter. Sometimes we encounter challenges. At the beginning of the quarter, we cannot determine which indicator is more important, so we will add a document with multiple categories, and then select from the categories a month later. The specific improvement data will be vague. The description of some words in KR depends on the current business stage, not the pursuit of absolute accuracy.
I want to make a new product, provide AI consulting or provide AI dynamic products, and the product launch proposes to achieve an entry animation that makes people feel full of technology. To set a good KR, the first thing is to have animation, and in addition, the sense of technology is relatively close to the core value of the brand and product. As for the sense of technology, try to make up for this picture as much as possible.
A good KR is just enough to support Objective by adding up several KRs. When discussing OKRs, we often ask, what about KRs? If KR is not critical in the moment, remove it. Each KR selected must be carefully considered and communicated repeatedly. During the customization process, we need to get a structured OKR, including the company and the individual. The connection should cover the entire company, and each OKR should be clear and support Objective. OKR needs continuous maintenance, which is how to use OKR during operation.
run
OKRs will face challenges
There is a possibility that OKRs will be forgotten by employees, because there will be many temporary jobs in actual work. In addition, at work, further deepening of the problem awareness or changes in the environment can affect KR and make it less important.
Solution
First, make communication structured, and form the habit of checking OKRs every day. Challenges encountered in the implementation process can be further discussed and communicated. We will set a checkpoint for changing OKRs. After the OKR document is finalized, it will be closed, and all write permissions will be turned off. At a certain point in time, the permissions will be turned on again. If everyone makes adjustments, the OKRs will be changed. Because arbitrary changes will make KR unable to support Objective.
Appraisal does not equal performance
Exam is for review
When we set goals, we will score OKRs. When we went to Silicon Valley, we also found that different companies have some practical differences. We still use Google's traditional way, 0.8 means that Objective has been implemented. Why not use 1 to mean do it? Because the standard of 1 is beyond imagination, OKR scoring is a very rigorous process. Setting the full score to 0.8 essentially hopes that OKR developers will be subjective. However, people who are more demanding of themselves will suffer more and more by using OKR scores.
How to evaluate performance
In the early days, OKR scoring had nothing to do with performance. As a goal management tool, it is indeed a good personal management tool, but for some employees, it is easy to formulate OKRs and achieve them, but they cannot find their own positioning. , I can't find the relationship between doing this and the company's long-term development. At this time, OKR will be invalid.
We try to formulate OKRs more structured and top-down, and at the same time, OKRs are linked to performance. Linking with performance will make everyone deliberately pursue scoring, and the communication attributes of OKR and the attributes of management goals will be lost, and it will completely become a KPI assessment mechanism.
OKRs are not linked or not, so in the end, a very indirect method Peer Review is used. Performance is determined by word of mouth. If things are done well or not, the team will provide some information, and the manager will give you a score to finally determine your rank and bonus. There is also a problem with Peer Review in the first place. I write based on what I have accomplished, not based on the original goals. The final approach is that the process of Peer Review is bound to OKR. If something is not related to OKR, even if it is done well, it will not work.
OKR did not achieve performance, but it brought out the role of communication and structure. The goal of OKR and the communication of OKR are done in daily life. OKR is a tool to encourage subjective initiative and a goal management tool. The core is to hope that everyone communicates fully and believes in individuals. The impact of OKRs on performance is that I set OKRs and cooperate with Peer to review a more flexible performance method. During this process, OKRs become valuable and the whole system can work. Of course, different stages have different definitions of KR.
Summarize and think
OKR is an important communication tool. In the process of communication, the goal is further clarified and the goal becomes clearer. It is applicable to individuals, families, and companies. OKR needs to rely on people's subjective initiative, and is suitable for fields with challenges, personal value and team value tightly bound. It should be drawn up from the top down and communicated all the time. OKR is a part of the overall management tool. First of all, an OKR can not solve all problems, can not solve performance problems, can not rely on it to solve. OKRs are suitable for use with performance tools that leverage subjective initiative, such as Peer Review.
Q&A
Q: I didn’t understand OKR in the early stage. Can OKR and KPI be carried out at the same time?
A: OKR is not a performance tool. OKR is matched with KPI. People may deliberately pursue KPI and lose the flexibility of management methods. OKRs can do it if you just specify some numbers to make it measurable. If you feel that the desirable part of KPI is the digital part, OKR can be realized at a certain stage. I did not use OKR and KPI together, flexibility would be better.
Q: Under the product-driven model, the correlation and distinction between OKRs and heavy daily demand iterations.
A: OKR must be a whole. If OKR is split, it can form a complete tree. What your team does is OKR, plus some daily communication, these two things will not conflict. Product-driven is essentially serving the company’s goals. The content in the company’s OKR documents written by everyone is directly related to the company’s business. No matter what the driver is, it is positively correlated.
Q: OKR is not a suitable performance tool, and it is not recommended to be linked with performance. Does that mean that a set of goal mechanisms and a set of performance mechanisms should be developed separately? Or how does OKR relate to personal interests?
A: OKR should exist in parallel with another set of performance tools. From the current method, it must be linked, otherwise it will be out of touch with the goal and results. From the perspective of personal interests, in the process of working for OKR, as long as you actively work hard and make results, in terms of performance, you will gain a lot through supporting performance.
The above content comes from the sharing of Mr. Fan Huaiyu.