00 OK R the Essential Tool for Organizational Goal Management

00 OKR - The Essential Tool for Organizational Goal Management #

Hello, I’m He Liuli, the Head of Agile Transformation at JD.com’s Platform Ecology Department. I’m delighted to share my practical experience in implementing OKRs at JD.com with you.

When it comes to OKRs, I believe you are not unfamiliar with them. Originating from Intel and popularized by Google, OKRs are being adopted by mature and startup companies both domestically and internationally. Companies like LinkedIn, Amazon, Dropbox, Zynga, Huawei, BAT, ByteDance, and JD.com among others are all implementing OKRs. So, why is OKR so popular?

Using OKRs to Tackle the Internet’s Second Half #

As the Internet enters its second phase with the decline of the traffic bonus, growth is becoming increasingly difficult, and organizational management problems are being magnified. For example, we often hear complaints from different roles within organizations:

  • Employees: “I feel like I’m just doing the work, I have no idea about the direction of the larger department and the value of doing these tasks.”
  • Team Leads: “The team lacks vitality and lacks execution capabilities.”
  • Department Managers: “The plans can’t keep up with changes, and setting KPIs is pointless.”
  • Decision-makers: “The strategy is set, but after a significant amount of time has passed, there are still no substantial results.”

Such problems have been effectively addressed through the implementation of OKRs. One manager once told me that some team members were using OKRs to proactively do things that were not requested by their supervisors, making the team feel more motivated. Team members have also approached me saying that using OKRs has made their work more meaningful, as they now know the organization’s strategies and how their work can contribute to achieving those strategies, which makes them very happy.

OKRs have this kind of magical effect. Why is that? Essentially, OKRs are a set of goal management methodologies, which includes the formulation of goals, the management of the goal implementation process, and the evaluation of the results achieved. This closed-loop goal management process covers almost every aspect of work and spans across all levels of an organization. In other words, effectively utilizing OKRs can bring different values to various aspects of work and different types of personnel.

And in the Internet’s second half, this “magic tool” for organizational goal management can help us solve even more problems.

Where Does the Magic of OKRs Lie? #

Most of us work and grow within organizations, and even if you embark on an entrepreneurial journey, you are essentially establishing an organization. The reason for an organization’s existence is to achieve goals. Therefore, effectively managing goals is crucial for the development of the organization and the growth of individuals within the organization.

Furthermore, every organization faces the challenge of internal and external environments. On one hand, it is about how to flexibly respond to the ever-changing external business environment, and on the other hand, it is about how to build a competitive internal organization. By mastering and utilizing OKRs, these problems can be effectively addressed.

(1) Solving the Dilemma of “KPI-driven Management” to Flexibly Attain Organizational Performance #

In the past, the “KPI-driven management” approach, which only focuses on the numerical results, inevitably leads to process management issues, cultural differences, unfair incentives, and loss of leadership. More importantly, KPIs are usually used to manage established plans, while ignoring the uncertainty of the external business environment. Just imagine, if plans cannot keep up with changes, and you are still fixated on established KPIs, it will inevitably lead to going in the opposite direction.

On the other hand, the OKR approach establishes a series of tracking and review mechanisms, as well as continuous assessment and adjustment activities for goals. This enables flexible responses to the VUCA (volatile, uncertain, complex, and ambiguous) business environment, leading to high-quality organizational performance.

(2) Solving Organizational Growth Problems and Ensuring the Implementation of Organizational Goals #

The core of strategic planning is to solve organizational growth problems. OKRs assist us in strategic management through a more structured approach, fulfilling the growth necessary for organizational strategies.

“O” represents the strategic direction, while “KR” represents quantifiable indicators for growth. Through the combination of business-oriented OKRs and non-business-oriented OKRs, OKRs focus not only on financial and user-oriented business growth but also on non-business growth such as process efficiency improvements and capability enhancements. Therefore, I believe that OKRs can guarantee the comprehensive growth of organizations, enabling both business success and healthy organizational development.

In addition, the formulation of OKRs follows basic constraints and generation rules:

  • Alignment of “O” from top to bottom, ensuring consistency among goals at different levels within the organization and creating a combined force.
  • Discussion and consensus-building in KR for the specific implementation path of goals, enabling goal accomplishment through decomposition and division of labor.
  • Categorizing individual OKRs generation according to the alignment with the superior goal and external support goals, ensuring that the goals of each individual are related to the organizational goals. So, the structured management strategy of OKR effectively solves the problem of organizational growth, and through the hierarchical relationship and mutual support of OKRs, it ensures the realization of organizational goals.

(3) Enhancing organizational culture and leadership, activating people within the organization #

The continuous collaborative process of setting OKRs and the mechanism of sharing team OKRs help teams clarify goals, strengthen trust relationships, and bring about a culture of collaboration and integrity within the organization. In addition, the working mechanism of “setting objectives, reviewing and adjusting processes, and closing the feedback loop” in OKRs promotes continuous communication, confirmation, and consensus between managers and the managed regarding goal setting and achievement. This establishes a good working relationship between superiors and subordinates. Therefore, I believe that using OKRs effectively can enhance organizational culture and leadership.

At the individual level, the 21st century is the era of knowledge workers. To activate knowledge workers and motivate them, the core is to give them a sense of purpose, autonomy, and continuous growth in their work. OKR starts with setting goals, encourages creativity and autonomy, changes the traditional “command and control” management approach, and even motivates individuals to set their own directions. Finally, performance is evaluated based on the combination of organizational goals and the individual’s autonomous goals, and promotions and recognition are determined. This activates the “people” within the organization.

By now, I believe you have already felt the charm of the OKR methodology. However, in order for this tool to effectively and consistently exert its “magic” powers in organizational goal management, we not only need to study and understand the theory but also require practical guidance.

Many organizations fail to implement OKRs properly because they lack a holistic understanding and practice of OKRs. For example, they may only apply OKRs at the team level and overlook the fact that the attainment of organizational performance is a whole. Or, after introducing new OKR goals and performance management methods, the organization fails to adjust and upgrade its processes, incentives, and culture to create a matching organizational environment for OKR implementation. As a result, OKRs become formalistic over time.

Since mid-2019, I have had the privilege to fully participate in the introduction and promotion of OKRs at JD.com, and have coached OKR transformation in three JD.com subsidiaries: JD Retail, JD Health, and JD Logistics. I have witnessed the tremendous value that OKRs bring to organizations. I particularly hope to share all the practical knowledge, experiences, and summaries of OKR implementation at JD.com with you, without reservation. I hope this will help you better understand and implement OKRs effectively.

How did I design this course? #

In this column, I rely on various OKR implementation case studies from JD.com and other industry players like ByteDance, Baidu, and Kuaishou to help you systematically understand the application of OKR methodology. The course will cover both theory and practical implementation, as well as provide case studies and distilled methodologies.

Module 1, Overview: OKR methodology. I will explain the differences and connections between OKRs and other goal management methods. From the perspectives of business, operations, organizational management, and individuals, I will thoroughly analyze the real reasons behind the popularity of OKR. Using the case study of Baidu and its founder Robin Li’s OKR implementation, I will help you deepen your understanding of the relationship between OKRs and organizational strategy. Finally, I will guide you to understand the patterns of generating OKRs at various levels within organizations.

Once you have a clear understanding of the development background of OKRs, their special significance, their mapping to organizational strategy, and the generation patterns at different levels within organizations, you will also understand how OKR methodology functions as a whole in organizational goal management.

Module 2, Practical implementation: How to write Objectives and Key Results (OKRs). When actually writing OKRs, I believe you have encountered many practical issues, such as identifying valuable Objectives, constantly revising and refining them, and the quantification of Key Results. How many Objectives and Key Results is appropriate? This module will address these questions. I will provide detailed explanations for all these questions and give you a universal formula to help you write with confidence.

Module 3, Implementation: OKR Process and Change Management. In this part, I will teach you a set of processes and mechanisms to establish OKRs, so that you can bid farewell to the worry of “not being able to implement OKRs, and it eventually becoming KPIs”.

I will use JD.com as a case study to introduce effective practices in the setting and management of OKRs, ensuring that you can immediately apply them. I will also compare the similarities and differences between KPIs and OKRs, helping you thoroughly understand the distinctions and connections between the two.

In addition, as OKRs represent a new way of working, implementing them will involve a series of changes. I will also discuss how organizations can upgrade motivation and culture to align with the implementation and transformation of OKRs.

Lastly, during the process of driving OKR transformation, you will encounter many obstacles and difficulties. I will provide you with corresponding solutions to help you overcome these obstacles.

Target Audience #

  • If your organization is about to adopt OKRs, you must be anxious about what OKRs really are and how to implement them. Is there a relatively comprehensive OKR course that I can learn from and refer to?
  • If you are a manager, you definitely want to activate every individual in your team, improve the team’s execution, and lead the team to achieve breakthroughs and innovation.
  • If you are a department head, you definitely want your department’s business to achieve continuous growth and find better ways to focus on growth direction, establish growth indicators, and ensure that the implementation does not deviate after strategic goals are determined.
  • If you are responsible for performance management in HR, when the performance management methods for KPIs are becoming increasingly formalized and ineffective, you certainly want to find a new goal management method that can achieve better results.

I have detailed case explanations and systematic explanations for all these problems and expectations. I believe you will have a sudden realization and can use the OKR methodology I teach to implement it, effectively solving your confusion and achieving great results.

Instructor’s Message #

OKRs are rapidly developing both domestically and internationally, and they are bound to become a new goal management method used by every organization. Furthermore, OKRs can be used not only in work but also in your personal life and learning. For example, you can set OKRs for your own learning, exercise, and travel. You can also use OKRs to continuously manage your own life and learning, and achieve a more fulfilling personal value.