How the OKR became legendary (Intel inside)

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Andy Grove (www.whatmatters.com)

I first heard of the goal-setting theory of motivation back in 2011 when I took a management course at Bilkent University in Ankara. The theory was developed by Edwin A. Locke in the 1960’s. In my mind it is linked with two very important terms in job design: Specificity and difficulty.

Specificity and difficulty: Clear, particular and difficult goals are greater motivating factors than easy, general and vague goals.

Honestly, I had no idea Intel’s strategic management was built upon that theory, up until I came across an amazing book by John Doerr, called “Measure What Matters: How Google, Bono, and the Gates Foundation Rock the World with OKRs.”

The book is a journey along the path of successful organisations, following the threads that guided their executives to new discoveries and innovations. I find myself learning a lot as I read the book. It appears that Venture Capitalists are very eloquent after all; I never expected to look up words in the dictionary to read a book written by a former engineer. But John Doerr does not only excel at writing.

Let’s talk about strategic management for a moment.

Robbins and Coulter define strategic management as what managers do to develop the organisation’s strategies. The strategies are the plans: How the organisation will do whatever it’s in business to do, how it will compete successfully and how it will attract and satisfy its customers in order to achieve its goals.

Strategic management is a process used by a company to help coordinate and focus employees’ efforts on what’s important as determined by the Company’s goals.

Actually it is a six-step process. It starts with identifying the mission (i.e., what the business should do) and its components.

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The Strategic Management Process (©2012, Pearson)
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Components of a Mission Statement

Intel’s mission is to create world-changing technology that enriches the lives of every person on earth.

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A January 1978 Intel advertisement for the 8086.

In January of 1980, Andy Grove, Intel’s CEO, would provide clues of what was to come in a memo sent to the Sales Engineers: “We intend to establish ourselves as offering complete computer solutions — in very large-scale integration (VLSI) form.” VLSI is CPU, ROM and RAM in one chip, which was a big thing in the 70s. Now, it might not sound like a pioneering move, but back then, allowing that level of convenience to the customer, changed completely the way technology was used and perceived. That’s pretty consistent with Intel’s vision, don’t you think?

Intel did the external analysis; Intel’s success had inspired competitors who introduced competing technologies with lower costs. A year before the introduction of the Personal Computer (PC), Intel and Motorola were neck-and-neck in sales of 16-bit microprocessors.

Intel had all the components to formulate a strategy and fight back:

  • Intel’s strengths: Broad product family, system-level performance, superb technical support, fast-changing culture.
  • Intel’s weaknesses: Selling sets of components and not complete microcomputer solutions.
  • External opportunities: Customer decisions are influenced by a strong product line, Motorola is slow-to-adapt to change.
  • Threats: Motorola has a user-friendly instruction set and customers think it is a more convenient solution to them.

So, Intel had goal-setting, analysis and strategy formation inside” 😏 but what about strategy implementation? Outcomes will suffer if the strategy is not implemented correctly.

Intel had OKR inside.

Objectives Key Results (OKR) was Grove’s way to implement the strategy, track progress, create alignment, and encourage engagement around measurable goals. Over a thousand employees would be involved. Each business unit had its own OKR in the corporate strategy.

An Objective (i.e., the “what”) would be “Establish the 8086 as the most popular 16-bit microcomputer solution.”. The Key Results (i.e., the “how”) for the same objective would be “Win 2,000 designs for Intel in the next 18 months.”

They sold 2,500 and won the war.

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High Output Management, Andrew S. Grove

Get a sweet glimpse of the microprocessor wars:

Links on how to get started with OKRs:

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Much of my job boils down to understanding and communicating the Answer to the Ultimate Question of Life, the Universe and Everything. | Find me at zoetrope.gr

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