OKRs are a goal-setting methodology that is rapidly spreading here in Italy as well. Finally!
Yes, “finally” because this methodology dates back to the 1970s. You read that right.
Often mistakenly associated with innovation and the Start-Up world, OKRs were originally conceived by Andy Grove, an Intel manager who, in the corporate reality of the 1970s, had already developed two strong convictions:
- change is a normal condition in business environments
- involving every person at every level is essential to remain competitive and agile.
The Distinctiveness of OKRs
The OKR methodology promotes engagement, alignment, and clarity of priorities at every level of the organization.
It translates purpose and mission into action — something that is often difficult to put into practice.
Unlike other goal-setting systems such as MbO or Performance Management, all people in the organization not only take part in defining the objectives, but are also key in determining how to achieve them.
Can the promise of driving engagement, alignment, and clarity of priorities at every level of the organization truly be fulfilled by the OKR methodology?
Yes, it can!
Even though it’s not guaranteed. Based on the projects we have implemented — especially in Corporates — the introduction process should not be underestimated. It must take into account the culture, management approach, and business type.
Their distinctiveness is evident because they transform the "way of working" at its root — the goals that guide the work of teams, individuals, and organizations.
Introducing OKRs in an already established context — whether SME or Corporate — requires a systemic vision and thoughtful evaluation to accelerate the desired evolution.
Indeed, the introduction of the OKR system can deliver several "blows" to traditional corporate cultures, where hierarchy is still present and the work context is marked by organizational silos that struggle to respond swiftly to change.
First Blow: Combining the WHAT and the HOW
MbO and Performance Management systems focus on what is to be achieved — that is, the definition of the desired result.
They assign responsibility for achieving it through a process that often has a negotiation dynamic, which in more hierarchical cultures tends to favor the role with greater organizational weight.
The OKR framework introduces a significant shift in how objectives are defined. That is, defining not only WHAT should be achieved, but also HOW to achieve it.
This approach is truly disruptive. Defining both "what" and "how" encourages discussion on very concrete aspects, taking into account corporate strategy and bringing in experience, know-how, and practical approaches to achieving goals.
Much of the subsequent work is therefore already structured — and, most importantly, shared — at the objective-setting stage. With OKRs, those responsible for the WHAT also participate in defining it, as they are directly involved and qualified to determine the HOW. The moment an OKR is defined cannot disregard the experience, knowledge, and strategic insight of those who will carry it out.
This leads to positive effects on engagement, accountability, and awareness.
Roles and hierarchies take a back seat.
Second Blow: Frequency of Updates
MbO and Performance Management systems follow an annual cycle: objectives are set at the beginning of the year — or thereabouts — and are expected to be achieved by year-end.
But if we say the world is changing at an increasingly rapid pace, can we still afford to set annual goals?
Certainly not!
The time frame for OKRs is quarterly, and sometimes even monthly. Their translation into operational activities encourages and supports weekly check-ins by everyone who has adopted them.
This makes it easier and more immediate to respond to external changes and quickly redefine priorities and the related OKRs.
The result is a significant increase in organizational agility.
However, OKRs need to be redefined quickly — something that is incompatible with a culture that prioritizes hierarchical roles.
It also clashes with much slower, less responsive practices that require involvement of multiple organizational layers to redefine and update OKRs.
Especially because — as mentioned earlier — defining OKRs cannot exclude the contribution of those who will be responsible for achieving them.
Third Blow: Transparency
MbO and Performance Management systems define objectives within a one-to-one conversation between manager and employee. The individual goals defined are not made public — especially if they are formally documented and impact compensation.
OKRs, on the other hand, are completely decoupled from compensation and are public. At the team, function, or full organization level, everyone can see everyone else’s OKRs.
This makes it possible to track how OKRs evolve each quarter — or month — showing what has been accomplished and/or how new directions have been taken to respond to change or seize new opportunities.
Moreover, being able to access everyone’s OKRs enables even the largest organizations to:
- know what their organization and colleagues are working on
- understand how their own work contributes to a larger goal
- take initiative to create new synergies aligned with the company’s broader purpose and top-level OKRs.
It’s easy to see how transparency around people’s objectives and priorities can be incompatible with a hierarchical culture and environments where organizational silos are actively defended.
Learn more
The mindup platform offers an online course on #OKRs. Click here for more information.