OKR
Objectives and Key Results
What are OKRs?
- Ambitious objective (O) + measurable results (KRs)
- Aligning the organization’s direction
- An evolution of MBO · transparent · short cycles
The first thing OKRs change is the tone of the weekly meeting. “We’re working hard” gives way to “Repurchase rate is 11% now, 4 points short of our 15% target.” Because goals are cut by quarter and pinned to numbers, leaders ask about how far results have moved, not how much work was done. When the company-level O is visible to everyone, each team has to explain where its work fits into that goal, and work that fits nowhere gets a clear reason to wait a quarter.
In practice, a few rules of thumb have hardened into working numbers. A team typically sets no more than 3 Objectives per quarter, with around 3 KRs per Objective, and a score of 0.6–0.7 is considered the sweet spot. A perfect 1.0 every quarter doesn’t mean great performance; it signals that the goals were set too low. Still, not every goal can be a stretch, so from the start you label committed OKRs that must hit 100% separately from aspirational OKRs where failure is accepted. The line with KPI is also clear. KPIs are always-on dashboard gauges that only need to stay within a normal range, while OKRs are the one or two metrics you deliberately push up this quarter. Values that must not drop, such as defect rate or turnover rate, are not KRs; track them alongside as guardrail metrics.
The most common mistake in practice is relabeling an existing KPI list as OKRs. The next is filling the KR column with tasks: put in “Complete ERP rollout” or “Hold 3 training sessions,” and you get a quarter where all three are done yet revenue and quality stay flat. Linking OKRs directly to performance reviews and bonuses is also risky. A team lead who set a stretch goal, scored 0.6, and got a low rating will submit only sure-thing numbers next quarter, and from that moment OKRs exist in name only. Entering them into a system at the start of the quarter and opening them only at the end is no better. Without short check-ins and feedback during the week, OKRs become a single reporting form rather than a management tool.
Seungbin JeonAn instructor who draws on psychology expertise to support communication and leadership growth in organizations
John KimInstructor John Kim, author of B2B Marketing Design and CEO of Nanum Consulting| Category | OKR | KPI | MBO |
|---|---|---|---|
| Type | Ambitious objectives + key results | Ongoing performance metrics | Goals set by agreement |
| Frequency | Short, such as quarterly | Continuous | Annual |
| Focus | Direction · Challenge | Health · maintenance | Scoring progress |
OKR grew out of Peter Drucker’s management by objectives (MBO, 1954). Intel’s Andy Grove added “Key Results” to develop it into OKRs (High Output Management, 1983), and John Doerr brought it to Google in 1999, which made it widely known.
Consider a hypothetical case. Company A, an industrial parts manufacturer with 180 employees and annual revenue of about KRW 62 (≈ US$1) billion, had seen its on-time delivery rate stuck at 88% for a year. Sales pushed orders in while production protected its lines, so every weekly meeting ended in a 90-minute blame game. They ran OKRs for the first time over the 12 weeks of Q3.
- At the first-week management meeting, the CEO declared, “This quarter we look at delivery and nothing else,” and merged the 11 goals that sales, production, and quality had each brought into a single O: “customers receive orders on the promised date.”
- The head of corporate planning rewrote the draft KRs. “Complete MES upgrade” was a task, so it was dropped, and the KRs became: on-time delivery from 88% to 96%, urgent production changes from 14 to 5 per week, and no more than 3 customer complaints per quarter.
- Every Friday for 30 minutes, the production and sales heads looked at the same screen and rated their confidence in each KR from 0 to 1. For all 12 weeks they kept one rule: if a score is below 0.5, skip the excuses and start with what is blocking you.
- When the HR head announced in a company-wide email, “This OKR won’t count toward performance ratings, and 0.7 is a good result,” the production team was the first to raise its KR target from 96% to 97% in week 6.
- After 12 weeks, on-time delivery rose to 95.2%, urgent production changes fell to 4.8 per week, and complaints dropped to 2. The weekly production meeting also shrank from 90 minutes to 40.
- When aligning direction around ambitious goals
- When you need to focus the whole organization
- When you review on a short cycle, such as quarterly
- Ongoing operational metrics (→ KPI)
- When goals are tied directly to evaluations and rewards
- Routine work that rarely changes