OKRs Vs KPIs: What Are OKRs? Meaning, Examples, and Comparison with KPIs in Game Companies
In the fast-paced and competitive world of game development, it's essential to have a robust goal-setting framework in place. OKRs, or Objectives and Key Results, have emerged as a popular choice for game companies, big and small. In a sector where the difference between a hit game and a flop can hinge on a multitude of factors—from gameplay mechanics to marketing strategies—OKRs offer a unified framework to navigate this complexity. They allow teams to prioritize tasks, allocate resources more efficiently, and pivot quickly in response to market feedback.
So, whether you're looking to optimize an existing game or launch a new title, OKRs can be your roadmap to success. This article will delve into the meaning of OKRs, provide practical examples, and compare them with other performance metrics like KPIs, all tailored to the unique needs and challenges of game companies.
A Brief History of OKRs
The concept of OKRs can be traced back to the 1950s when Peter Drucker introduced Management by Objectives (MBO). MBO is a goal-setting framework that emphasizes the importance of setting clear and measurable goals, communicating those goals to employees, and tracking progress toward those goals.
In the 1970s, Andy Grove, who was then the CEO of Intel, modified MBO to create OKRs. Grove added the concept of Key Results, which are specific and measurable goals that are used to track progress toward an Objective.
OKRs were popularized by John Doerr, who joined Intel in the 1970s and learned OKRs from Grove. Doerr went on to become a venture capitalist and helped to introduce OKRs to Google in the late 1990s.
What are OKRs?
OKRs, or Objectives and Key Results, is a goal-setting framework that helps teams focus on what's most important and measure their progress over time. OKRs are typically set for a quarter, and they consist of one or more Objectives, each with a set of Key Results.
Objectives are qualitative goals that describe what you want to achieve. Key Results are quantitative metrics that measure how well you're achieving your Objectives.
What are KPIs?
KPIs, or Key Performance Indicators, are metrics that are used to track the performance of a business or process. KPIs can be used to measure a wide range of things, such as sales, customer satisfaction, and employee engagement.
Step-by-Step Guide for Defining OKRs:
Step 1: Understand the Context
Start by understanding your organization's overall goals and strategy.
Identify the key areas or priorities that need to be addressed.
Step 2: Set Clear Objectives
Begin with defining clear and inspiring objectives. These should be qualitative and ambitious, answering the question "What do we want to achieve?"
Objectives should be aligned with the organization's mission and strategic direction.
Use the SMART criteria: Specific, Measurable, Achievable, Relevant, and Time-bound.
Objective Structure:
[Action Verb] [What] [Outcome]
Example: Increase [player engagement] [by 20%] [in the next quarter].
Step 3: Define Measurable Key Results
For each objective, identify 3 to 5 key results that will measure progress toward the objective.
Key results should be quantitative and specific, indicating how success will be measured.
They should be realistic and challenging, pushing the team to excel.
Key Results Structure:
Increase [metric] [from baseline] [to target] [by when].
Example: Increase [daily active users] [from 100,000] [to 120,000] [by the end of the quarter].
Step 4: Ensure Alignment
Ensure that each team's or individual's OKRs align with the organization's top-level objectives.
There should be a clear line of sight from the company-level OKRs down to team and individual OKRs.
Step 5: Communicate and Cascade
Communicate the OKRs throughout the organization, ensuring everyone understands their role in achieving them.
Cascade OKRs from top-level leadership to teams and individuals, maintaining alignment at every level.
Step 6: Regularly Review and Update
Schedule regular check-ins to review progress toward key results.
Adjust OKRs as needed based on changing circumstances or feedback.
Step 7: Celebrate Achievements
Celebrate successes and achievements when key results are met or exceeded.
Recognition and rewards can boost motivation and morale.
Step 8: Learn and Iterate
After each OKR cycle, conduct a retrospective to analyze what worked and what didn't.
Use these insights to improve the next set of OKRs.
Predefined Text Structure for Objectives and Key Results:
Objective:
Start with an action verb.
Clearly state what you want to achieve.
Specify the desired outcome.
Make it time-bound if possible.
Key Results:
Begin with the action verb "Increase," "Reduce," "Achieve," etc.
State the specific metric you're measuring.
Provide the starting baseline or current value.
Set the target value or goal.
Specify the timeframe or deadline for achieving the key result.
OKRs vs KPIs
OKRs (Objectives and Key Results):
OKRs focus on specific, time-bound objectives that are aspirational and challenging.
Key Results provide clear, measurable outcomes that define success.
They are outcome-oriented and encourage a results-driven approach.
OKRs are often used for setting strategic goals and priorities.
KPIs (Key Performance Indicators):
KPIs are specific metrics used to track ongoing performance.
They are typically based on historical data and provide insights into current performance.
KPIs are often used for monitoring day-to-day operations and overall health of a business.
They are less focused on setting specific, time-bound goals and more on continuous measurement.
Example
OKRs (Objectives and Key Results):
Objective: Increase Player Engagement
Key Result 1: Increase daily active users (DAU) by 20% in the next quarter.
Key Result 2: Boost average session duration by 15% within six months.
Key Result 3: Achieve a 30% increase in in-app purchases over the next year.
Objective: Improve Game Performance
Key Result 1: Decrease crash frequency by 25% in the next month.
Key Result 2: Reduce average lag time to less than 1 second in the next quarter.
Key Result 3: Improve the game's app store rating to 4.5 stars within six months.
KPIs (Key Performance Indicators):
KPI 1: Daily Active Users (DAU)
Measurement: The number of unique players who log in daily.
Benchmark: Currently at 100,000 DAU.
Target: Increase to 120,000 DAU.
KPI 2: Average Session Duration
Measurement: The average time players spend in a game session.
Benchmark: Currently at 20 minutes.
Target: Increase to 23 minutes.
Conclusion
In the fast-paced and ever-evolving world of game development, success hinges on countless variables, making a robust goal-setting framework essential. OKRs, or Objectives and Key Results, are a popular choice for game companies because they provide teams with a clear path to setting ambitious goals, measuring progress rigorously, and adapting swiftly to market changes. Whether you're refining an existing game or launching a new title, OKRs can be your guiding stars.
This article has explored the core principles of OKRs, exemplified their use with practical scenarios, and highlighted the key difference between OKRs and KPIs. While both metrics play a vital role in performance management, OKRs emphasize aspirational objectives and measurable key results, while KPIs provide ongoing performance insights.
So, as you embark on your game development journey, let OKRs be your strategic compass. By understanding the nuanced difference between OKRs and KPIs, you can chart your course with precision and achieve your desired outcomes.