Drucker once sternly warned managers: As long as our managers do not give up using performance evaluation to control employees, performance management is destined to fail. In this regard, I have never thought too clearly about how performance management can be done apart from KPI assessment.
After understanding the KOR principle in detail, I found that this confusion has indeed been effectively solved. My personal feeling: OKR is not a complete denial of KPI, but a sublimation of tools. Compared with KPI assessment, the implementation of OKR is more difficult, but this is also the meaning. In fact, management should not be based on inertia based on high control, but must be based on diligence and trust and responsibility.
About the brilliance of OKR and the difference with KPI tools, the author lists them as follows in the form of table comparison:
"KPI and OKR Comparison and Interpretation Table"
< p> Why did Google, Intel, and LinkedIn all abandon KPI and turn to OKR??Performanceism (KPI) ruined Sony? Toshitada Doi, former executive director of SONY and head of robot research and development (pseudonym? Tianwai Serang) ?) wrote in his article: ?It allows R&D personnel to work for external motivations and lose their inherent enthusiasm for innovation; those tasks that are difficult to see benefits in the short term, such as product quality inspection and ?aging treatment? processes are ignored, In order to complete performance appraisals, almost everyone only sets low goals that are easy to achieve. 1. What is KPI?
KPI, key performance indicator, is the abbreviation of Key Performance Indicator. KPI is a tool to measure how well we, as employees, are performing, as well as the company's overall performance management, and is closely linked to the company's overall strategies and goals.
1) The meaning of KPI
For employees, KPI means: 1. What tasks should I complete within the specified time period; 2. These tasks, I To what extent should each be completed; 3. Get money based on what has been completed and the degree of completion. In other words, if you complete the KPI, you will get money and rewards, but if you fail to achieve love, why not do it. So the leadership KPI is certain, the employees cheer up, and everyone works hard. So always remember one thing, the reason why KPI is so powerful and popular is: "What you evaluate, you will get".
2) KPI is a double-edged sword
KPI improves efficiency to the greatest extent, but it is also a double-edged sword.
First of all, there are too many corporate goals, which will lead to a series of KPIs. If the leadership chooses the wrong KPI, it means that employees will execute wrong instructions, and the consequences will obviously be serious.
Secondly, some things are worth doing, but they cannot be measured until some of them are done, and therefore KPIs cannot be formulated. Without an incentive mechanism written into it, innovation would be more difficult.
Thirdly, no one is responsible for the final result, everyone is only responsible for their own process. Then, it will inevitably happen if you forget why you set out just for the sake of a few KPI numbers.
In short, effective KPIs are often closely related to strategic goals, and this is true for individual employees, departments, and the company as a whole. But if a company chooses KPIs that are not consistent with its goals, it is like trying to drive a cruise ship in the wrong direction, and the result is likely to be the Titanic. So, how to drive a team of thousands or even tens of thousands of people to work together effectively? The OKR theory was proposed. 2. What is OKR?
The full name of OKR is Objectives and KeyResults, which is the goal and key results method. It is a set of management tools and methods for defining and tracking goals and their completion. The idea of ??OKR comes from Germany. Luke's Management by Objectives.
In 1954, Drucker proposed an epoch-making concept? Management By Objectives (MBO). It is the most important and influential concept invented by Drucker, and It has become an important part of the contemporary management system.
As a loyal follower of Drucker, Andy Graf, the president of Intel Corporation, invented and promoted OKR under the banner of HOM (High output Management). During the same period, Larry Ellison, the boss of Oracle, started MOKRs (Mission, Objectives, and Key Results) at Oracle.
John Doerr first worked for Intel and is deeply convinced of the OKR tool. In 1999, John Doerr (already a partner of the well-known venture capital firm KPCB and a director of Google) brought this process to Larry and Sergey of Google.
Successfully implemented at Google, the OKR method was adopted by other Drawing lessons from well-known IT companies, including Linkedin, Zynga, etc., OKR is gradually recognized by more and more IT companies, and Google requires dedicated training and implementation of OKR systems in all the companies it invests in.
At present, in addition to Google, Intel, Oracle, and LinkedIn, domestic Wandoujia has begun to use the OKR management model. 3. OKR execution procedures
1) Setting goals:
(1) Setting for all members. Companies, departments, managers and employees all set their own annual and quarterly goals starting with strategy.
(2) From top to bottom. The order of setting goals should be from company to department to group to individual. Because what an individual wants to do is generally not exactly the same as what the manager wants him to do. Then he can first check the goals of the upper management, find the parts that are beneficial to the company's goals within the scope of what he wants to do, and discuss them with his managers to make trade-offs. It is very possible that what you want to do will even become the company's future development direction.
(3) Target knowledge. Goals must be the first understanding after direct and full communication between managers and employees. Goals that do not reach the first understanding cannot be counted as goals. The setting of goals ends with the achievement of the first understanding.
(4) The goals are specific and measurable. For example, you can't say in general: "I want my website to be better", but to propose specific goals such as: "Make the website 30% faster" or "Increase integration by 15%"; you can't say: "Use gmail" To achieve success, it was to launch gmail in September and have 1 million users in November.
(5) Ambitious goals. Generally speaking, 1 is the total score, and it is better to reach 0.6-0.7, so that you will continue to strive for your goals and will not complete the goals before the deadline.
(6) There should not be too many goals. Employees usually set 4 to 6 goals every quarter. Too many goals will make people overwhelmed.
2) Set its KR (key results) for each goal
(1) Goals must have annual KRs and quarterly KRs. Annual KRs govern the entire year, but they are not fixed, but can be adjusted in time, and adjustments must be approved; quarterly KRs cannot be easily changed once determined.
(2) What can be adjusted is KRs, but the target cannot be adjusted. Measures and methods (KRs) can be continuously improved, and the setting of KRs should also be based on the best knowledge after direct and full communication between managers and employees, and should be based on employee confirmation.
(3) KR must have the characteristics: it must be able to directly achieve the goal; it must be enterprising and innovative, and it may not be routine; it must be based on output or results, Measurable, and set scoring standards; not too many, generally no more than 4 KR for each goal; must be linked to time.
3) Promote execution (from key results to action plan)
(1) Each key result will derive a series of tasks and assign them to different colleagues. .
(2) The person in charge of key results becomes a veritable project manager, organizing and coordinating everyone.
(3) Key results project managers are very important members of the team, and they should be able to schedule and influence enterprise resources. If he does not yet have this power, give him this power; at least, there should be absolutely smooth communication between the project manager and the company's decision-makers.
4) OKR review and performance evaluation
(1) Each employee needs to determine his own OKR for the quarter at the beginning of each quarter, and after the end of the quarter, he needs to determine his own OKR How to score OKRs on quarterly work completion? This scoring process only takes a few minutes, but the results are not directly linked to performance.
(2) The real performance evaluation will be conducted by the company every six months for all employees, mainly to review (review) the employee's performance in the past six months, and change the Job Ladder (business level) based on the evaluation results. and compensation.
(3) The achievement contents and levels of all personal performance evaluations are open to the whole company. On the one hand, it can be more fair and transparent, and on the other hand, it can also be given to every colleague. It provides examples of how to better learn and grow yourself, and inspires everyone to challenge and demand themselves with higher quality at work. 4. Which companies and departments are suitable for OKR?
1) Mainly Internet companies and high-tech companies.
Steve Jobs once said: One good engineer is worth 1,000 average engineers. For good engineers, the results of their work are often unpredictable, but their inner motivation has a great influence on the results of their work. The performance management method that uses working hours and the number of patents as KPIs can only allow the company to obtain a bunch of expensive but useless innovations. In turn, a management style that encourages taking risks and solving problems in your own way will be more appealing to knowledge workers like engineers.
2) Medium-sized companies and companies with more hierarchies
OKR management was introduced when the company had more than 100 people. At the same time, compared to flat companies, companies with many levels are more suitable for OKR, which can solve the problem of internal friction or direction deviation between departments.
3) Business Transformation Company
In this kind of company, the pressure to innovate falls on the CEO alone, and everyone else is just executing. Putting aside a person's innovation ability, the risks brought to the company by wrong decision-making during the transformation period are fatal. Better innovation may require the understanding of business by young company people from the end of the career ladder. These ideas need to have the opportunity to be discussed. OKR provides such a communication method. 5. Tips for OKR setting
1) Don’t set too many.
Set about 3 O’s at most in a quarter, and it is best not to set more than 4 KR indicators under each O.
Make sure that the length of the OKR worksheet in everyone’s hands is brief and clear, and there is no lengthy discussion.
2) O needs to be challenging, and KR must be specific.
The essence of OKR is to encourage employees to break through their own abilities. Don’t write down goals that are easy to achieve. Only O’s that require jumping to achieve are qualified O’s.
There are many forms of scoring, including 0-1, 1-5, which are used for numerical scoring. There are also concise and creative companies like LinkedIn that use colors to score.
The best OKR is not necessarily 100% completed. Three-quarters completed is good. High scores do not necessarily receive praise. If the current period's goal setting is not ambitious enough, the next period's OKR setting will need to be adjusted. Low scores will not be criticized, but work data will be analyzed to find ways to improve OKRs for the next quarter.
3) Cross-department cooperation should be included in the OKR list.
The O of the department can support the O of the company, but the relationship between them may be necessary but not sufficient.
Especially the marketing, operations and product technology departments. These departments need and receive support and recognition from multiple departments. Therefore, when formulating OKRs, these departments should communicate with the cooperative departments that may be involved in advance and integrate the work of both parties. Write them into each other’s OKR lists.
4) The first time you use OKR, treat it as a communication tool
Remember, don’t rush to use it to evaluate and control employees. 6. When the company implements OKR, how should you adapt?
1) The concept changes from? What does the company want me to do? to What do I want to do?
OKR is for those who like to take the initiative It is good news for people who work and want to have more room to perform at work. Therefore, not all company people can adapt to this system immediately. Assuming that you are a passive worker and are not very willing to work actively, then this "finding things to do by yourself" working method may make you a little painful. For people in this type of company, when the company removes KPIs and uses OKRs for management, you must try to transition from a pure executor to a planner to some extent.
2) Don’t worry too much at the beginning that the OKR you set is not effective enough
The purpose of OKR is to give full play to the initiative of company people and encourage them to think about what they need to do in order to achieve a specific goal. What can be implemented in it, so it pays to use your imagination. After you set your personal OKR, communicate with your boss. He will combine the OKR situation of the entire department to judge whether your setting is reasonable and whether it can contribute to the realization of the final goal. If there is too much deviation, the department head will also help you. Point it out and ask you to make adjustments.
3) If you find problems with KR during execution, communicate with your supervisor in time
OKR is a flexible management method that can be adjusted at any time, so it accepts the execution process This is different from the nature of KPI indicators that must be achieved. If you find that the OKRs determined after discussing with your supervisor are still unrealistic in execution, or there are new changes in the market, such as the addition of new Channels and competitors, you can immediately communicate with your supervisor to adjust the work list set at the beginning of the quarter to avoid blind execution and ultimately ineffective work or missed market opportunities.
4) Read more OKRs from other departments and colleagues to get work inspiration
OKR information is transparent to the whole company, the purpose is to allow company people in each position to understand other people’s work The direction of efforts of colleagues, supervisors, and departments, so as to adjust one's work. Therefore, people in the company can learn more about the OKRs of departments and colleagues that are related to their own business, parallel brands, or simply interested in them. They may be able to learn from them innovative work methods or find opportunities for cross-department cooperation.