Succeed with OKRs
Hi there! If you are reading this you are probably struggling with OKRs. So, keep reading, you stepped into the right place 🙂 We will see how to succeed with OKRs.
This is the first of a series of blog posts that will help you with your OKR adoption so that you can take your organization to the next level and thrive in volatile and fast-paced 21st century:
- Common pitfalls and errors
- Getting started with OKRs
- Embedding strategy into your daily operation with OKRs
- The review process: Tracking and evaluating OKRs
Want to see how to make OKRs work for you in order to achieve breakthrough business success? Keep reading …
The OKRs process systematizes strategic planning and provides a structured, unified approach for developing and reviewing the strategic plan in a fast and dynamic way.
OKRs ensure that everyone in the organization has the opportunity to participate and is therefore aligned and working toward the same end.
With OKRs organizations can achieve alignment, focus, buy-in, continuous improvement and speed in their effort to achieve their purpose. When implemented properly OKRs will engage everyone in the organization and provide a sense of purpose for each member of the company.
But, the first time you try OKRs, you are likely to fail miserably. Although OKRs are not complicated in essence, they are difficult to implement successfully and it will take some time to master it.
There is a simple set of questions that should drive the thinking process in order to succeed with OKRs:
- What do we need to do?
- How should we do it?
- How are we doing?
- How do we know?
Simple, isn’t it?
But, many OKRs adoptions fail because people don’t realize the new method requires a significant change in mindset. You cannot adopt OKRs on top of a culture of individualism and bonus linked to individual performance, or on top of a culture of low trust and punishment of failure.
If you want to succeed with OKRs let’s start with lessons learnt, taking a look at common pitfalls and errors when adopting this method.
Common Pitfalls and Errors adopting OKRs
Individual Performance Appraisal
It didn’t work before and it won’t work now. Linking salary increase and bonuses to individual performance evaluation for knowledge workers is a fatal error that can destroy your company. Well-known examples: Dieselgate in VW, sub-prime crisis in USA or ENRON.
OKRs is a tool for driving alignment, focus and continuous improvement, if you use it with any other purpose in mind it will fail.
Failure to connect execution to goals
Well, we defined goals, everybody is happy and enthusiastic, but business as usual has taken control. Nothing that you are doing is connected to the goals.
In our experience this is due to not being able to identify what really matters to the organization. What happens is that idealistic goals are defined, goals of what you would like to achieve in the long-term, goals that look much more like a vision.
Some other times you define aggressive growth or innovation goals when what you should be doing is improving your processes and making them faster, reliable and more predictable.
When this happens this is a sign that goals are not aligned with the reality of the company and you should clearly understand what your current situation is before determining your next target condition.
Goals shouldn’t be SMART. You definitely want KRs to be SMART, but goals should be aspirational, challenging and mostly qualitative.
According to conventional wisdom, goals should specific, measurable, achievable, realistic, and time-bound. But SMART goals undervalue ambition, focus narrowly on individual performance, and ignore the importance of discussing goals throughout the year. To drive strategy execution, leaders should instead set goals that are frequently discussed, ambitious and transparent.
Often times organizations adopt traditional MBO but they call it OKR. So, executives define the goals of their business units and business owners define the goals for their teams. This is not how it works.
The real OKR process must allow for an interactive dialogue throughout the organization to assure that the ideas and concerns from all levels are considered.
One possible approach is that executives define vision, mission and strategic goals for the company. Then and they ask their business owners to come up with strategies to achieve those goals and define their own goals. Then, business owners do the same with their teams, and so on.
Executives set direction and then a conversation is done with the rest of the organization to determine how to achieve strategic objectives.
At then end, looking at the OKRs from the front-line employees’ perspective, it will look something like this. Each person’s daily work must be:
- Aligned with the goals of the team
- Aligned with those of the department
- Aligned with those of the company
- Aligned with those of the customer
Changing goals too often
What “too often” means depends on the rhythms of your business, but a common complain of heads of product and business owners is that goals change every quarter. This creates confusion and demotivates their teams. You need to find your own cadence, and a possible solution to this problem is to do goals annually and review KRs quarterly.
This could also be a signal that management in your company is actually thinking in projects when they talk about objectives.
Companies changing objectives too often are also changing priorities too often. Which is a sign that alignment and direction is needed.
However, cadences at team level are shorter that cadences at division level or company level. You are the best one to define what your cadences should be, not your manager or a consultant.
People don’t know what a goal looks like
In my experience as a professional coach and business consultant I’ve come to realize that many people is not comfortable with goals, or they just don’t know how a goal actually looks like. So, don’t expect that everyone will come up with great goals just because you ask them. You need to help, by providing context, support and tolerance to failure.
If at the beginning people come up with goals that look like KRs, relax. If at the beginning people come up with goals that are actually projects, don’t worry. Remember you have a review process where people can learn from others and adapt their objectives and key results.
Too many objectives
Focus is difficult and hard. But, for a given product or strategy at any given moment there should be at most between 1 and 5 key goals. Not more. Aim for 1-3 if possible.
More than that is a sign that you don’t know what you want and, further work is needed in order to bring clarity upon your current condition and defining your next target condition.
Lost in details
Winston Churchill used to say “Perfection is the enemy of progress”. And, it applies perfectly in this case. Specially at the beginning people get lost in the details and try to make it perfect. Is this a goal or a KR? How should we evaluate the progress? How often should we review progress? How do I measure this qualitative goal? Etc, etc, etc.
Our experience with this is that “the movement is demonstrated walking” and that even the minimum viable OKRs are going to be better than anything they had previously. So, encourage people to move ahead and review it frequently. Apply PDCA to the OKR process.
Define KRs as features, projects or tasks
Key Results are not features, projects or tasks to be done. They are expected measurable business results. Here we are talking about things that can be measured that will tell us the objective was achieved.
Now, you know the common failures in adopting OKRs. If you want to succeed with OKRs take a look at the next post how to get started with OKRs so that you don’t die trying.