Description of OKR

• Created in the 1970s by Andy Grove and popularized by early Google investor John Doerr, OKR is a framework designed to help organizations establish objectives or goals in a more efficient manner, and then monitor the outcome.

• With the framework, organizations can "establish far-reaching goals in days instead of months." It is for this reason that the framework is quite popular among tech companies, especially those in Silicon Valley. In general, tech companies find that OKRs can help them remain on course while being innovative in a fast-paced and fast-changing industry.
• Although OKRs may seem similar to key performance indicators (KPIs), there is a difference between the two. KPIs are more about reporting and less about business goals, while OKRs are more about business goals and less about employees' day-to-day work.
• Most organizations use spreadsheets and Google documents to record their OKRs, but there are now companies that offer solutions to make the documentation process more efficient. Examples of such companies include startup Ally, Wrike, productboard, Engagedly, and Weekdone.

Key Parts and Features of OKR

• OKR has two key parts, the objectives and the key results. The objectives pertain to what needs to be accomplished, while key results pertain to how objectives are to be accomplished.
•  Key results are not simply a to-do list. They should be statements of how specific tasks relate to business objectives. An example of a correct key result is "Shipping feature X increases new user sign-ups by 10 percent this quarter," while an example of an incorrect key result is "Ship feature X by the end of the quarter."
•  Objectives are characterized by the following qualities: ambitious, qualitative, actionable, and time-bound. Key results, on the other hand, are characterized by the following qualities: measurable, quantitative, achievable, and time-bound.
• Although OKRs are communicated to all concerned members of the organization, each key result has an owner who is in charge of monitoring progress and of exploring ways to achieve the desired result.
• Teams implementing OKRs typically have three to five objectives, with each objective having three to five key results that can be measured. Smaller teams are advised to keep objectives to a maximum of just three, while larger teams are advised to keep objectives to a maximum of five.
• Objectives at lower levels of the organization correspond to key results at higher levels of the organization.
• Key results are periodically monitored and scored on a scale of 0 to 1 or a scale of 0 to 100, where the highest possible value corresponds to the complete accomplishment of the objectives. The score for the objective is the average of the scores for the objective's key results.
• A score of at least 70% to 80% is generally indicative of success.
• OKRs are supposed to be flexible; therefore, they can be adjusted if business priorities shift.

Examples of Companies Using OKR

• Google, Amazon, Adobe, LinkedIn, Microsoft, Twitter, and Zynga are some of the largest companies that are known to be using the OKR framework.
• OKRs were introduced to Google by John Doerr in 1999. Since that year, OKRs have been a huge part of Google's success. When Sundar Pichai took over Google as chief executive officer, he simplified the company's OKR framework such that employees need to deal with only one set of goals instead of two (i.e., short-term and long-term) at a time.
•  Amazon is said to rely to a large extent on OKRs in ensuring employees are working in alignment with company objectives.
• Adobe used to have a dreaded "rank and yank" system where least productive members are identified and let go. Now, it has found people management success with OKRs.
• LinkedIn is said to use OKRs for the purpose of creating a sense of urgency among its employees.
• Bill Gates of Microsoft recommends OKRs for managers who want to perform better. He says his management style is largely influenced by OKRs.
• Twitter uses OKRs to not only measure progress but facilitate communication and understanding of business objectives among employees as well. It encourages employees to look at their colleagues' OKRs and talk with these colleagues.
• Zynga's approach to OKRs is different in that it has a weekly cadence instead of a quarterly cadence. Zynga CEO Mark Pincus calls the OKRs "individual roadmaps," and he checks in on these roadmaps every Friday.
• Weekdone, an OKR software provider, identifies 57 companies that use OKRs.

Description

• The Entrepreneurial Operating System (EOS) is a business management model for entrepreneurs that uses practical tools and simple concepts to achieve the desired goals.
• The EOS goal setting system is able to clarify, analyze, and help a company achieve its vision.
• EOS utilizes efficient, uncomplicated, and real-world tools, which it consolidates with enduring business principles to assist entrepreneurs in achieving goals.
• The EOS goal setting system helps leadership teams to comprehend and learn the company's vision, achieve traction, and become a healthy group.
• EOS goal setting system implements "specific, measurable, achievable, realistic, and timely" (SMART) goals that are referred to as Rocks, which are set and reviewed in 90-day increments, while their status is observed weekly.
• In the EOS goal setting system, Rocks serve as the three to seven most essential objectives at the individuals, company, and department level.

Key Parts and Features

• The EOS goal setting system administers the EOS Model™ to present a visual demonstration of the Six Key Components™.
• It utilizes the Six Key Components™ model that applies to any company and must be bolstered and regulated for one to establish an exceptional business.
• The first component in the EOS goal setting system is vision, which brings everyone on board in regard to how and where a business is going.
• The second component is people, which involves the entrepreneur surrounding themselves with remarkable individuals that share and desire to achieve the company's vision.
• Meanwhile, the third component is data, which are the objective figures that disclose where things are for the company. These numbers are unbiased from personalities, emotions, opinions, and egos.
• The fourth component is issues, which involves resolving issues within the organization.
• The fifth component is process, which includes identifying, establishing, and recording key procedures that guide the organization on how the business should be ran and ensuring everyone follows them for consistency and scalability.
• Finally, the sixth component is traction, which involves the absolute execution of the vision by "making it real" through discipline and accountability.
• The EOS goal setting system uses the EOS Process™. This process "puts all the pieces together" by ensuring the correct order to help invigorate a company's key components via the EOS Tools. It has four stages, namely getting started, becoming focused and clarifying vision, achieving traction, obtaining the result.

Companies using EOS goal setting system

• The firm reports that more than 117,250 companies are utilizing the EOS Tool.
• Some companies that are implementing the EOS goal setting system include Zoup Restaurant, Detroit Radiator Corporation, Brogan and Partners, ASI Asphalt Inc., Image One, and Sachse Construction.

System Overview

• Companies generally begin by purchasing the Starting Up book to familiarize themselves with the system's products and features. The book is available for individual sale, as well for bulk purchase to distribute company-wide. It introduces and explains the system, highlights companies using it, and provides additional books and articles for reference.
• The Scaling Up system aims to simplify business management tasks that tend to become overly complex as a business grows. It features the Scaling Up Scoreboard software and several types of one-page worksheets to keep goals concise and easily accessible for reference.
• It also provides opportunities for learning in the form of coaching, workshops, bootcamps, and conferences.

Scaling Up Scoreboard Software

•  Scaling Up Scoreboard software stores "planning, execution, and communication activities... in a centralized tool."
• It utilizes a One Page Strategic Plan (OPSP) where business leaders and employees can view their company's strategy in a single space. It maps the company's core purpose and values, long-term goals, annual plans with key initiatives, quarterly targets, key performance indicators (KPIs), and both company and individual priorities.
• Businesses can design a dashboard with visual graphics featuring company-specific KPIs and stay connected with the software's cloud-based communications system.
• The software also tracks employee performance, displays top-performing team members, and develops "unique data sets" for analysis.

Focus-Area Growth Tools

People

• The One-Page Personal Plan (OPPP) charts short- and long-term personal goals in finance, relationships, and health.
• The Function Accountability Chart (FACe) evaluates the following company roles to assess the effectiveness of key personnel, possible workload imbalances, and vacancies: head of company, marketing, innovation, sales, operations, treasury, controller, information technology, human resources, talent development, and customer advocacy.
• The Process Accountability Chart (PACe) lists key drivers of business and assigns someone to be held accountable for each process.

Strategy

• The SWT worksheet provides a visual representation of industry or organization trends, core business strengths, and any weaknesses "that aren't likely to change."
• The 7 Strata exercise highlights brand promises, vocabulary, and mindsets that set a company apart from its competition.
• The Vision Summary illustrates a company's core values and purpose, brand promises, short- and long-term strategic priorities, and KPI goals.

Execution

• The Who What When (WWW) worksheet provides a simple outline of what tasks need to be completed and their deadlines, as well as who is ultimately responsible for each one.
• The Rockefeller Habits Checklist presents a list of ten metrics for success with four steps to reach each one.

Cash

• The Cash Acceleration Strategies (CASh) worksheet outlines how a company can improve its sales cycle, production and inventory cycle, delivery cycle, and billing and payment cycle.
• The Power of One worksheet sets goals in the following areas to improve net cash flow: price increase, volume increase, cost of goods sold (COGS) reduction, and overheads reductions.

Additional Resources

• The Scaling Up Assessment asks potential clients 32 questions total in each of Scaling Up's focus areas (people, strategy, execution, and cash) to determine a company's specific needs.
• Scaling Up offers coaching services and boasts a network of over "150 coaches worldwide" with more than "10,000 clients globally."
• Advanced learning opportunities include the Scaling Up Master's Program, a 12-month course that teaches "strategy, leadership, and organizational development." Scaling Up also offers local workshops and its CEO Bootcamp.
• It hosts an annual 2-day summit "tailored to business owners interested in growing their companies." The 2020 conference will be held May 5th-7th in Dallas, Texas.
• Scaling Up also promotes the Cash Flow Story system on its website. Cash Flow Story helps businesses analyze cash flow and "understand the numbers" without using complicated "accounting jargon."

Scaling Up Clients

• Company Nurse is headquartered in Scottsdale, Arizona and provides "nurse triage for workers’ compensation" to businesses.
• 3D Systems provides 3D printing equipment and software. It is based in Rock Hill, South Carolina.
• Softec is a non-profit organization headquartered in San Luis Obispo, California that "creat[es] and promot[es] technology events for enthusiasts of all ages."
• TruMethod is based in Moorestown, New Jersey and provides managed service provider (MSP) software and training for businesses.
• Craig Cares provides home care to seniors and is headquartered in Roseville, California.

Research Strategy

Goal Setting Systems — Differences and Similarities

• The Objectives and Key Results (OKR) system, the Entrepreneurial Operating System (EOS) and the Scaling Up Goal setting system are all intended for different types of organizations. The OKR system works best for large organizations that need to stay very flexible, EOS is created for startups and smaller entrepreneurial organizations, while the Scaling Up system is mostly used by growing businesses that have a lot of employees.
• The above is clearly demonstrated by the type of organizations using each system. The OKR system is mostly adopted by large technology companies like Google, Amazon and Microsoft, the EOS system is used by start-ups and local organizations like Zoup Restaurant and the Detroit Radiator Corporation, while Scaling Up is implemented by businesses in the services industry like Company Nurse and Craig Cares. 
• Another major difference is the scale at which each system is designed to work. The OKR system takes a bottom-up approach by focusing on the goals of small teams, and then using those goals as tasks for the next level of organizational structure. In contrast, EOS and Scaling Up are intended for clarifying the goals of an entire organization, but Scaling Up also has a number of subsystems for managing the subsets of a business, while EOS does not.
• The OKR system is very easy to implement in an organization, EOS relies more on "efficient, uncomplicated, and real-world" tools, while Scaling Up requires trained personnel to set the system up, and needs an entire infrastructure of documents and software to support its proper use.
• Scaling Up is a proprietary system delivered by a software product and supported by coaching, and learning resources. EOS is also a trademarked tool, however it is relying less on software (most of the software tools are free to use), and more of its network of coaches, called EOS Implementers. The OKR system is completely free to use in itself, although a number of companies have started offering supporting resources to make it easier for organizations to implement it.

•  All three goal setting systems employ some variation of the SMART methodology for defining specific goals. According to this methodology, all goals should be specific, measurable, achievable, realistic, and timely.
• While the OKR system helps the company to realize its vision by increasing the performance of individual teams, Scaling Up and EOS do so by focusing on several operational areas of the business. EOS has its Six Key Components: vision, people, data, process, and traction. Similarly, Scaling Up has split the operations into 4 categories: people, strategy, execution and cash.
•  All systems differentiate between short and long-term goals. In the OKR system, short-term goals are called Key Results, while Objectives are long-term goals. EOS dubbed them short-term and long-term "Rocks," while Scaling Up simply calls them "priorities".