OKR stands for Objectives and Key Results. OKR is the top performance framework used by Google, Amazon, Netflix, and many more Fortune 500 companies. It is a simple yet effective tool if embraced as a culture. Stretch goals are where OKR shines and becomes the ultimate lifestyle of a company to find its true potential for any goal. Let’s define, study, and truly understand how stretch goals work.
OKR can be incredibly useful for any size company and it can also be life-changing individually. To build it as a part of your culture, you need to apply the guidelines with discipline.
Let’s dive into the principles of OKR and how you can maximize your performance using them.
Each OKR is implemented using 3 steps: Objectives, Key Results, and finally Initiatives.
Objectives are the main priorities of the company. It can also be seen as the vision. It all starts with the top decisionmaker creating the top objective, which becomes the top priority. In Google’s case, the top objective is to make all the information of the world available to anyone in the world. The top objective determines the other objectives to come because they will be a means to realize the top objective.
Key Results is the way to define what’s to be done to realize each objective. Key Results are always measurable. They are inspected and improved regularly. There are normally a minimum of 3 and a maximum of 5 key results for each objective. Each individual working on an objective has his/her own Key Results and they check them weekly and monthly.
Initiatives are the actions taken to realize each Key Result. All objectives, key results, and initiatives should be well-thought-out, clear, and concise. Below is the representation of the Google OKR structure. The top objective is created by the top management and then, all the other objectives, key results, and initiatives are created to realize that top priority. This is only a visual representation and doesn’t reflect the actual OKR of Google.Main Advantages of OKRs
John Doerr, one of the pioneers of OKR who was the reason why Google embraced OKR as a culture, sums up the benefits of OKRs in one abbreviation: F.A.C.T.S.: Focus, Alignment, Commitment, Tracking, Stretching.
Starting with the top objective and then, other objectives succeeding it, the management team makes the company as a whole focus on certain and a limited number of topics. This way, leaders give their teams a compass and a baseline for assessment.
To exemplify, objectives are one-line goals and there can be up to 5 objectives only. It’s the same with the key results. Each objective can have up to 5 key results only, which are to be implemented in 3–12 months. Each key result is also inspected once a week or a month.
Managers and contributors alike tie their day-to-day activities to the companywide vision. All objectives are interrelated and all the OKRs are open to the entire company, which creates transparency and fast feedback cycle.
In time, this creates the alignment that a company needs to move forward as a whole because people can easily see if something is not working or if it is not aligned with the top priorities to then correct it before it’s late.
As all the members of the company are committed to implementing the key results through initiatives to fulfill their objectives while serving the top objective or priority of the company, they go to great lengths to do a great job.
The weekly feedback cycle is a great way to stay committed since grading and feedback cycle will make the individuals, departments and the company as a whole know if the commitment and success rate are there. In this regard, OKR creates the auto-control for achievement and whether the team is committed or not.
To prevent the slippage, for any objective and key result, weekly or periodic inspections are made. This way, any improvement needed is made without losing time and the team stays alert and focused on what’s important while receiving insight and support from other team members every step of the way.
Tracking would need to have certain standards such as schedule, topics, and what to look for in each inspection.
Starting from the top manager of the company, the objectives need to be compelling and almost daring so that the company overall catches its full potential.
Stretch goals take the company to the next level by envisioning a dimension for a certain topic a level that would be seen as almost impossible. Yes, stretch goals should almost seem impossible, however, they should still be achievable. Stretch goals can be life-changing for a company and if you want to fully apply them, it’s essential that you study the examples of how exactly it works.
According to John Doerr, Larry Page, the co-founder of Google, is one of the top personalities when it comes to stretch goals. He says, “when you aim for going to Mars, you will at least go to the moon and that’s how you make moonshots.” Practice makes perfect, therefore, I am giving examples of primary stretch goals further down this story.
OKRs start with a clear objective and continue with key results and initiatives. Let’s work on 3 objectives on 3 topics.
Content Marketing OKR Example
Objective: Attract new visitors with the weekly newsletter. Key Result 1: Increase the number of subscribers from 2000 to 3000. Key Result 2: Increase the open rate of the newsletter from 25 to 35% in 3 months. Key Result 3: Increase the CTR (click-through-rate) to >7% Initiative 1: Facebook ads with retargeting using the current subscribers. Initiative 2: Additional incentives as rewards, gifts, scarcity Initiative 3: Change the topic structure, design, and do A/B tests among subscribers.
PPC (Pay-Per-Click) Marketing OKR Example
Objective: Improve our Google ads campaigns in the US Key Result 1: Run10 Google ads campaigns for 10 different target groups in the US. Key Result 2: Increase paid new visitors in the US from 1000 to 2500/month. Key Result 3: Increase CTR of ads from 1% to 2%. Initiative 1: Improve profile & location targeting using feedback from colleagues. Initiative 2: Activate display and Youtube marketing with video ads. Initiate retargeting after 4 weeks with expert supervision.
Corporate Growth OKR Example
Objective: Grow our corporate global business. Key Result 1: Hit the company’s global sales target of $100 million in sales. Key Result 2: Achieve 100% year-to-year sales growth globally. Key Result 3: Reduce churn to less than 5% annually. Initiative 1: Hire highly experienced sales reps locally. Initiative 2: Incentivize retention of customers through creative offerings and discounts. Initiative 3: Incentivize the sales through the available customers by giving both parties the advantage of referral marketing. Learn more here..
Stretch Goals is Aiming for the Everest
Stretch goals may be what makes OKRs the top performance framework used by the most innovative companies in the world. Stretch goals are about pushing the limits of what’s possible.
It’s like aiming to run a marathon in under 2 hours or going to Mars with a manned mission in 2030. Even though stretch goals are mostly seen as impossible to reach, today’s impossible becomes tomorrow’s possible.
Stretch goals are long-term and they are inspiring rather than seen as impossible.
Elon Musk as the Champion of Stretch Goals
Elon Musk is unquestionably a great leader. He works endless hours tirelessly about what really matters and then, he is able to expect the same from his team. He sets seemingly impossible goals for production, auto-pilot, Mars, boring tunnels, Neural Link, and more. Basically, stretch goals are his lifestyle.
He projected half a million Teslas to be produced by 2016. Tesla fell short of it, but this culture of pushing forward with incredible momentum created the company that actually made it happen. In 2021, the company built about 950,000 Teslas and it is set to grow its production to 1.3 million cars in 2022. Tesla grows its production by 30% annually.
Tesla’s stretch goal of making a sustainable future through energy and automotive may have seemed impossible, however, now, all major automotive brands have already announced their plans to become 100% electric by 2030 thanks to the unstoppable progress Tesla has made within the last 10 years.
Sundar Pichai Stretch Goal for Google Chrome
Sundar Pichai had the stretch goal of reaching 100 million weekly users for the Google Chrome browser in 3 years. They set out to create the best browsing experience in 2006.
2008. The browser reached 10 million users when aiming for 20 million users weekly.
2009. 37 million weekly users instead of 50 million
2010. 111 million weekly users which surpassed the 100 million weekly user goal.
Now, Google Chrome is the dominating browser in the world thanks to the stretch goals realized in 2010. This success was reached using stretch goals and constantly improving the process using the feedback and taking lessons from previous actions.
Jeff Bezos Leading Amazon to Become Faster and Cheaper
Jeff Bezos started Amazon as an internet book store, but his main objective was to sell anything, cheaper and faster. After 25 years, Amazon is the biggest e-commerce platform thanks to its affordable pricing, and 1-day delivery.
Jeff Bezos built the culture of Amazon around a simple motto. People will always be in search of cheaper products and faster delivery. Therefore, Amazon works on that main objective through its 3rd party suppliers as well as its fulfillment-by-Amazon service and fleet.
OKR should be studied in schools and applied by companies all over the world since it’s a proven framework that maximizes the chances of an organization to succeed and find its peak potential.
OKR creates discipline, transparency, openness to improvement, clear goals, actions, measurability, and many more benefits. It’s simple to understand and yet effective in building success and getting things done.
Maybe most importantly, OKR paves the path to constant improvement to reach the full potential as an individual and/or company.
Learn How OKRs Work
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