DISCLAIMER: This article turned out to be lengthier than I had thought it would be. For those who are genuinely interested in OKRs, please keep scrolling. For those who dread long articles, feel free to apply the Law of Two Feet here.
Over the past week, I have had the opportunity to complete "Measure What Matters" by John Doerr, who is a very strong advocate for a goal setting and alignment framework called OKRs (Objectives & Key Results), designed by Andy Grove at Intel. With this article, I aim to explain a little more about OKRs, so that it can help people who:
- Have heard about OKRs, but do not know what they are, and do not know how can OKRs help their organizations, teams, and individuals.
- Do not understand how OKRs are different with MBOs (Management by Objectives).
- Are curious to learn more about OKRs because Google and Intel are practicing them.
- Do not have the time to read the book, and are looking for a TLDR version of the book (that has 215 pages).
- Want to expand their knowledge in goal setting and alignment tools, on top of traditional MBOs.
How are OKRs Different from What You Are Doing Currently?Before I dive deeper into this, I'd love to reiterate that OKRs were designed as a tool to align goals within an organization, to increase operational efficiency. OKRs were meant to help people stay focused on the most important goals, and help them avoid being distracted by urgent but less important goals. For those who are familiar with and/or practising MBOs in your organization, the two largest differences between both tools are the following:
- OKRs are not tied to compensations, whereas MBOs are used to determine compensations i.e. salary, bonus, and increment.
- OKRs are shared publicly to everyone within the organization, whereas MBOs are shared only between manager and employee.
The Four Superpowers YOU Need to Know about OKRsIn the previous article I wrote, I explained about tips on setting objectives and key results. It doesn't end there, as the book also talks about four superpowers of OKRs. I will be listing down four key aspects per superpower, that are important if you want to make the best out of OKRs.
Superpower #1: Focus and Commit to Priorities
- When choosing OKRs, shortlist the objectives that has the most leverage for outstanding (not mediocre) performance. If you have objectives that are just meeting average expectations, think again and harder.
- Commit to three to five objectives—what you need to achieve—per cycle. Too many OKRs will dilute and scatter people’s efforts. Expand your effective capacity by deciding what not to do, discard, defer, or deprioritize accordingly.
- For each objective, settle for no more than five measurable, unambiguous, time-bound key results—what you need to get done to achieve the objective. By definition, completion of all key results equates to the attainment of the objective.
- Enlist your organizational OKRs with upper management before rolling out to teams and individual level. Why? This is because you first want to get buy-in and support from upper management before communicating the OKRs to your teams. If the upper management is not supportive, you run into risks of efforts being questioned and challenged by upper management, which is very likely because your organizational OKRs do not contribute to the company OKRs.
Superpower #2: Align and Connect for Teamwork
- Engage teams and individuals by showing how their objectives relate to the leader’s vision and the company’s top priorities. The fastest route to operational excellence is lined up with transparent, public goals, all the way up to the CEO.
- Communicate, communicate, communicate. Reiterate your OKRs to teams and individual until you are tired of hearing them yourselves. OKRs are like a mantra, if you do not chant it enough, most likely you are not going to remember them.
- Encourage a healthy ratio of bottom-up OKRs, approximately 50%.
- Make all lateral, cross-functional dependencies explicit.
Superpower #3: Track for Accountability
- To build a culture of accountability, install continuous reassessment and honest and objective grading—and start at the top. When you have leaders openly admit their missteps, contributors will have more courage to take healthy risks.
- To keep OKRs timely and relevant, have the designated shepherd ride herd over regular check-ins and progress updates. Frequent check-ins enable teams and individuals to correct their course with agility, or to fail fast.
- To sustain high performance, encourage weekly one-on-one OKR meetings between contributors and managers, plus monthly departmental meetings.
- To keep OKRs up-to-date and on point, invest in a dedicated, automated, cloud-based platform. Public, collaborative, real-time goal-setting systems work best.
Superpower #4: Stretch for Amazing (Psst, this is my favourite!)
- First things first, establish an environment where individuals are free to fail without judgment. If your organization has a culture where failures are frowned upon, used against during performance appraisals, alas I am sorry to say that this superpower cannot be attained.
- To stimulate problem solving and alleviate teams to greater achievement, set ambitious goals— even if it means some key results will be missed. But don’t set the bar so high that an OKR is obviously unrealistic. Morale suffers when people know they cannot succeed. It is important to set smaller OKRs that enable people to visualize the end goal.
- At the beginning of each cycle, differentiate between aspirational versus committed OKRs. You can find tips to differentiate both of them when you scroll later.
- Design your stretch OKRs to fit the organization’s culture. Organizations change and evolve over time, so it is also important to continuously review and adapt OKRs that are aligned with current organizational climate and culture. I mentioned about this in my article here, about three criterias that make agile (and also general) transformations successful.
How to Get Started with OKRs?Now, this section contains best practices if you would like to experiment and get started with OKRs in your organization or teams or both. Note that OKRs can also be applied to your own personal live outside of work, because we too, have our own personal goals to achieve!
Writing Effective OKRs!Poorly-written/managed OKRs are nothing but a waste of time, an empty management gesture, something that your local management does because upper management had sent them an official email, asking for OKRs to be sent to them by dd/mm/yyyy. Well-done OKRs are a motivational tool that helps make it clear to teams what is important, what to optimize, what to focus, and what trade-offs to make during their day-to-day work.
In OKRs, there are two categories i.e. committed and aspirational OKRs. It is for important for you to be able to differentiate between both. For example, committed OKRs are something that you and your teams need to achieve at nothing less than 100%, whereas aspirational OKRs are something that has an average success rate of 70%.
Committed OKRs are what we agree will be achieved, and we will be willing to adjust schedules and resources to ensure that they are delivered. Aspirational OKRs are what we’d like the world to look from an ideal perspective, even though we have no clear idea how to get there and/or the resources necessary to deliver the OKR. Here are my top three classic OKR writing mistakes to avoid during your next OKRs setting with your teams:
- When your OKRs have words like "Maintain...", "Keep doing what we are doing...", "Continue...", you are not doing it right. How can your teams push for amazing when your OKRs are about maintaining status quo?
- Teams who can meet all of their OKRs without needing all of their team’s resources are assumed to either be hoarding resources or not pushing their teams, or both. This is a cue for senior management to reassign resources to teams who will make more effective use of them. Do also consider letting people who constantly sandbag, go.
Low Value Objectives (aka the “Who cares?” OKR)
- OKRs must promise clear business value, else there really is no reason to allocate resources doing them. Low value objectives are OKRs where even when teams score 1.0 for them, no one even notices or even cares, for the lack of a better word. You want to have your teams assigned to the the most valuable OKRs in the organization.
- If you wrote them down in five minutes, most probably they are not good enough. Think again and harder.
- If your objective doesn’t fit on one line, it probably isn’t crisp enough. Keep things succinct. Think again and harder.
- Make sure the metrics are unambiguous. If you say “1 million users,” is that all-time users or seven-day actives? Which is it? Think again and harder.
Tracking The ProgressOKRs are typically a quarterly cycle, where teams gather to review their key results with respect to the objectives set. Grade your OKRs with a color scale to measure how well you did.
- 0.0–0.3 is red
- 0.4–0.6 is yellow
- 0.7–1.0 is green
- How are your OKRs coming along?
- What critical capabilities do you need to be successful?
- Is there anything stopping you from achieving your objectives?
- What OKRs need to be adjusted—or added, or eliminated—with respect to shifting priorities within the organization?
What do YOU think about OKRs? Do you think they can be helpful for you and your teams? If yes, how? Else, what is missing? Feel free to reach out to me on LinkedIn to get to know more, or drop a comment in the section below!