At OKR League, we did some scouting around for information on why people hesitate to do OKRs or think OKRs may not work for them. The misunderstandings about the OKR model are astounding and these very confusions are why OKRs won’t work. It is like a self-fulfilling prophecy. Let’s fix a deeper understanding of OKRs with the following insights. The inaccurate knowledge of OKRs that are reflected in the ‘misunderstanding’ statements below is happening in reality and needs to be rectified:
FIRST MISUNDERSTANDING: “You should expect to get it wrong the first 3-4 quarters.”
Wrong? 3-4 quarters? Where did you learn about OKRs? Please do not blame it on “Measure what Matters.” John Doerr/Andy Grove talked about certain principles that were applicable during the 1980s and progressing into the 1990s. If you do not improvise on them to fit a digital era with VUCA embedded into it, then yes, you will keep getting OKRs wrong.
What should you do: Get your OKR Framework architected by an expert and the entire team trained in the principles of OKR. Once you understand them, you don’t have to get them wrong for several quarters. You may do course corrections, but you will have complete control over your OKRs and better business visibility as well.
SECOND MISUNDERSTANDING: “Our teams don’t understand what’s the difference between an Objective and a Key Result?”
Guess what – that is exactly the reason your OKR initiation should be done well. The syntax of OKR is very clear, and distinct. There is a marked differentiation between several terminologies that are, unfortunately, used interchangeably. This creates a lot of confusion and unnecessary loss of faith in a lovely model.
What should you do: If after doing OKRs for several quarters, your teams still don’t get the differences between
· Objectives
· Key results
· Initiatives
· Activities
· Tasks
· Subtasks
· KPIs
· KRAs
· Business as Usuals
get yourself another coach. And, get your OKRs together. It is a journey, yes, but you don’t have to go through the winding road forever.
THIRD MISUNDERSTANDING: “The need to set ‘unachievable’ goals”.
The OKR framework talks about ambitious goals – not unachievable goals. Unfortunately, there are organizations that use OKRs as an ‘arm-twisting’ tool against employees. That is a misuse of the model and ridden with bad intentions.
What should you do: Differentiate between ambitious goals and essential goals. The syntax for such goals also differs significantly as well as the weightage and measurement criteria. Demarcate the performance conversations around these two types of goals.
FOURTH MISUNDERSTANDING “The problem of setting goals in a cascading fashion”
Cascade happens only from the CEO level. Every other level can almost simultaneously set up its goals as you move from one quarter to another. It is only SPECIFIC FUNCTIONS/DEPARTMENTS that may need the cascade guidance.
As a leader, when you initiate a transformational exercise like OKRs in your company, you must give time to your employees to sync up with your strategic planning and expectations.
What should you do: Once your employees are comfortable, allow for a bottoms-up goal-setting process, in specific functions of your organization, which empower your innovation and growth aspirations. Do not let loose the horses too quickly. This is not just true for OKRs but for any change management in the organization. Also, some functions may need a top-down approach.
Work with an OKR SME to get this process right. It is definitely not a time-consuming process if you know how to do it right from the word “GO!”
FIFTH MISUNDERSTANDING “We do not like the progress scale of 0-1”
Why do you need to use only a 0-1 scale? The problem is that many people cut-paste the OKR approach from the internet and/or use the Google approach to OKRs. Any management model is just that – a model. A skeletal framework. It needs to mature and mellow based on time, place, and circumstances.
What should you do: Identify your business pain points (can be done with the help of an assessment by a good coach) and situationally apply the OKR framework. There are many ways to grade an OKR – the 0-1 method is just one. You can use the percentile method and map it with the standard statuses or you can also use the weighted average method by giving the right
· Weightage
· Confidence Levels
· Completion Criteria
to all your KRs and Initiatives
SIXTH MISUNDERSTANDING “Fitting workstream in 3 months blocks is a big challenge”.
This is one of the main reasons OKRs fail – because you have not understood the dynamics of how to work with OKRs, the flow, and how to conclude a cycle. OKR, in its standard format, is a quarterly goal management system. But how can every goal be fit into a quarter? That is a very rudimentary understanding and application of OKRs.
What should you do: Even though OKR is meant to be a quarterly system, that is not meant to restrict you from defining dynamic, multi-quarter goals while retrospecting on them every quarter. Else, how will an organization course-correct? If you use OKRs only for goal-setting and do not use the strategic power embedded in this framework, it will become a very constricting exercise and you may end up with a snowball of incomplete OKRs. Build an OKR-based MIS to switch seamlessly between quarters to get things done.
LAST BUT NOT THE LEAST:
SEVENTH MISUNDERSTANDING: “OKRs should not be connected to compensation”.
By all means, keep it outside of your basic compensation structure. But to completely keep OKRs away from any kind of a financial reward or recognition program is absolutely impractical and unacceptable as well. Gone are the 80s and 90s when this MAY I have worked (though I do not know how and find it exploitative). The digitized workplace and the new-gen workforces have/will not accept this. Even if they do, you cannot sustain it.
What should you do: Incentivize OKR achievements, on both the organization and team levels. Encourage people to work in teams and network better. The cultural aspect of the OKR program is sorely neglected and this makes it either a self-centered or a demotivating exercise. Design a reward and recognition program in alignment with your OKR architecture. It cannot be a one-size-fits-all approach.
In my next write-up, I will share more insights on how not to fall into the trap of switching between models just because you did not implement one of them well.