In 1999 a venture capitalist, John Doerr, invested $11.8m for a 12% stake in a startup promoted by two Stanford grad school dropouts which had amazing technology, great entrepreneurial energy, sky high ambitions - but no real business plan.
In his 2018 book, Measure what Matters, John Doerr recounts stories of many companies, including some which aren’t household names, that have successfully used OKR’s to set themselves on a well structured management path from the start. Doerr says “OKRs are a management methodology that helps to ensure the company focuses efforts on the same important issues throughout the organisation.” “An Objective is simply WHAT is to be achieved, no more, no less. They are significant, concrete, action oriented and (ideally) inspirational. Properly designed, they are a vaccine against fussy thinking and fussy execution.” Key Results benchmark HOW we get there. KRs are specific, timebound, aggressive yet realistic, but most of all, measurable and verifiable. At the end of the period, usually a quarter, you know whether you have achieved your objective or not.
Doerr’s book abounds with case studies, demonstrating how, for instance, focusing helped YouTube reach a billion hours of watching every day – and in the process grew by a factor of ten! Or how Intuit, parent of hugely popular accounting package Quickbooks, in which John Doerr became involved in the early 1990s, was honoured when Fortune named Intuit the 4th most admired company in the computer software industry in 2017 . Or, how the Gates Foundation sets priorities and keeps track in its ongoing fight against the most lethal animal on the planet – the mosquito - that kills up to 725,000 people a year - and aims to eliminate malaria by 2040.
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This article first appeared in the Spring 2019 edition of “Chartam” the magazine of the Thames Valley ICAEW Chartered Accountants.