Why it is Essential for your Company to have Objectives and Key Results to Achieve Maximum Growth

By admin.dsm | Jul 30, 2018


Every company has an insane amount of potential for growth whether you are just a startup, breaking even, or pulling 6 figures each year. But, the mystery to unlocking this potential has been hidden in these three letters OKR. What these letters stand for is how your company will achieve its maximum potential growth and it isn’t easy because you have to get your whole team aboard on this new train. However, this is not the only system to implement to achieve business success, there are many more characteristics to it and you can find out what they here

So, where do I start?



Basic Hygiene Across the map


First, what in the world is an OKR? Well, as mentioned before it stands for Objectives and Key results and to give a brief history lesson, it was created by Intel CEO, Andy Grove who then transferred it to Google when it was a startup company. This then became a very critical part in the company’s growth because this system allowed for all the teams to reach for the stars and strive for greatness while not getting sidetracked. All in all, this system is basically a structure to define and track objectives while providing a grade for them at the end. OKRs are run through a three-step process where the individual first sets a very high and uncomfortable objective and under that are key results or stepping stones that will directly affect the achievement of those objectives. Then, at the end of the process which is usually a quarter (3 months), the objectives and key results are graded on a scale between 0 and 1 where there are sweet spots for each objective ranging from .6 to .8 and for key results .7 to 1. However, the individual does not want to get a 1 all the time for objectives and key results because then that would mean they did not set their goal very high and sandbagged their way up to perfection. Furthermore, it is recommended that 50% of the company’s objectives must be from the bottom up which means the employee’s objectives have to take place as the backbone. The reasons for this rule is to motivate the employees to express what they feel like is the best use of their time and skills. Without this agenda, too much top-down dication can create an atmosphere of telling and doing instead of brainstorming and accomplishing. And most importantly, these objectives and key results must be very easy to see amongst team members so that everybody knows each other’s goals and that they matter.

Now, what else do I have to know?



Always got to get Familiar With the Terminology


Previously stated, there are three parts to this system and those are creating objectives, key results, and then scoring them. In more detail, these objectives and key results must take on a few characteristics in order to actually be effective. For objectives, these should feel very uncomfortable and be a stretch and the reason for this attribute is because setting a goal that you know will be accomplished does run a company very efficient at the position it is in currently but does not allow for any growth to be made. Accordingly, since the objective is set so high such as reaching for the stars, it is ok if the individual did not make it to the stars because they still would have reached the clouds. Moreover, these objectives have to be expressed in a way where there is an actual endpoint since the whole goal is to represent a clear path of what you want to accomplish and how you will do it. Next, key results must be a measurable milestone that will directly advance to accomplishing the objective. Towards the end of the process, the scoring takes place and is graded on a scale between 0 to 1. Less than 40% is considered a miss and obtaining 100% all the time is considered sandbagging and not thinking big enough. In general, there are 3-5 objectives and 3 key results for each objective.

But why Should my Company Implement this?


Objectives and Key Results


The Benefits on Benefits on Benefits


Here we go! This annually and quarterly system actually brings a lot of benefits into a company and three that I wanted to highlight was that it helps everybody become more disciple, productive and transparent. What that means is, for discipline, it assists the individual in setting a clear path of what they want to accomplish and not get sidetracked easily. It also allows for all the objectives to connect and support the company’s objectives which then keeps the organization tuned in and focused on completing their little steps to achieve the greater picture. For productivity, this will help bring out the best in people because you are setting that high goal for yourself and then ultimately translates to creating exciting environments when you are able to achieve that goal. That said, this system accounts for where the individual wants to go or be in the company’s future because the layout is structured in a way where this is an end goal of achievement. And the last benefit, transparency, because you are able to witness what everybody in the company is working on which means everybody is sharing the same commitment to reaching the larger company mission.

What’s Next for Design Source Media?

Find out in our next blog so stay in tuned!

Sources to look into:




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