Leading brands across the world, including Adobe, Amazon, Facebook, Google, and many others empower and align the work their teams do, with the proven goal-setting methodology of Objectives & Key Results (OKRs).
By the end of this article, we hope you’ll understand how OKRs provide businesses and their leadership teams the data and the insights they need to address rapidly changing business environments that most of us are facing today.
Major challenges faced by businesses with respect to employee performance are:
- Alignment: It is difficult to align all employees to the top priorities of the business or the department, and to bring about this laser-like focus on what really matters. This is especially important when people are working from multiple locations or remotely, and it’s particularly hard these days because the priority of the businesses are evolving. It is super important to make sure that everyone is aligned and as the organizations’ priorities shift, employees should know what is really important for them to contribute to.
- Engagement: How do you really keep your team members engaged? How do you help them understand the impact they are making every day? How do we make them feel connected to the overall mission of the company and what everyone else is doing? How to make them realize that they’re making a difference every day even though they’re working separately.
- Visibility: The third challenge is to keep leaders and managers in the loop? How do you have visibility at all levels in your organization, so you can react and understand what’s going on and, hopefully, you can act to it before it’s too late? Again, in this highly fluid and volatile world we live in, the ability to have real-time visibility, and the ability to react to it quickly becomes a must-have.
We, and many of our clients have been using the OKR methodology to solve these problems and what we would like to share our experience of what we have learned in working with multiple organizations that use OKRs.
We will focus on:
- A quick overview of OKRs
- How OKRs help?
- Common pitfalls organizations run into while following this methodology
- How to get started
A quick Overview of OKRs. What are OKRs?
Objectives and Key Results, more commonly called by the acronym OKRs, is a methodology for setting outcome-based goals that align the work every team and individual is doing, at every level of the organization.
It is a popular goal-setting framework that essentially uses a matrix to drive clarity around two important questions for business. The first one is where do I want to go? and the second one is how do I know that I got there? These questions are defined in a measurable way so that at the end of the OKR period, it’s very clear if the company, team, or individual has achieved these goals. When we think about the makeup of the OKR program, we should think about it in two parts: first as a methodology for setting measurable outcome-based goals that align the work every team and person is doing; and second, as a framework or a series of best practices or rules that aid companies in successfully managing those goals within the daily, weekly, and monthly, rhythm of business.
When we develop OKRs, we do it in a hierarchy using a mix of both top-down and bottom-up planning to ensure that every goal is properly aligned both vertically and horizontally across the organization. This means we first start by establishing company-level OKRs. Those are then aligned to team-level OKRs and then those are further aligned to individual OKRs. This simple methodology of cascading goals ensures that every team and individual in the company is working together to achieve the strategic priorities of the business.
Companies like Google, Adobe, Slack, LinkedIn, Microsoft, Twitter, LG, and many other big names use this methodology. OKRs have helped them achieve their crazy mission of organizing the world’s information and it helps keep their teams on track.
We believe this is a really powerful statement when we think about how Google started using OKRs back in 1999, long before they became the big giant company that we know today. So it really speaks volumes to you about the power of OKRs.
How OKRs help?
There are numerous benefits of using this methodology, but the primary ones can be broken down into 3 broad areas:
- Transparency: OKRs actually enable the organization to gain visibility at every level of business. It enables organizations to react very quickly and manage the risks proactively. OKRs are connected, they are not standalone things you write and forget but they’re connected to the work your team is doing on an ongoing basis. You get real-time visibility into what’s going on, so you are no longer flying blind and you can be very proactive and can make course corrections before it’s too late. That is one of the biggest benefits: having the visibility for leading the organization the right way in a time like this.
- Big Picture: How do you help your employees and your team members in understanding the big picture? I’ve read this story somewhere, it is a story about three workers who are laying bricks. A tourist walks up to them and asks, “What are you guys doing?” and the first person replies, “Hey! Can you not see? I’m laying bricks” and the second person replies, “I am building a wall” and the third person replies, “I am building a monument.” You want your team members to always know that they are building the monument and they know they’re having an impact every day. This big picture view helps people to understand and brings purpose to their work. It lets them know that they don’t just work on tasks and projects, but there is a real purpose to work and they’re helping to achieve really amazing things. This makes a very big difference, particularly when they are sitting at home and working alone.
- Focus: OKRs drive impeccable focus on the task at hand. They enable you to be a lot more productive, so you always know what you need to be working on. You always know where to focus your time. Being remote and not having to work within the confines of a nine-to-five job, you can work around your schedule but at the same time, you still achieve everything that you need to. So actually it lends itself to a really nice work-life balance and allows you to juggle this craziness that we are all dealing with.
Five Common Struggles While Adopting OKRs
OKR is a very simple framework. A lot of organizations adopt this framework because of this magic of its simplicity. But there are few common pitfalls that most organizations run into, irrespective of where they are in the OKR maturity spectrum:
- Writing OKRs: The first one starts with actually the first stage: writing good OKRs. This problem is seen on two ends of the spectrum. On one side, teams don’t take enough time to think about the OKRs. They essentially take what they were doing before. For example, they were working on 20 things last quarter and they write them the same way they wrote it the last time. One should really take out the time to understand the OKR framework and use that to focus and bring clarity on the four to seven things that really matter and write those crisply. It takes a little effort, but it’s not rocket science. Organizations often try to rush through the process and that is the antithesis of what should be done. On the other end of the spectrum, organizations take way too much time. This usually happens for organizations that are adopting OKRs for the first time and they’re trying to perfect these at the very first go. It may take them weeks to actually finish writing them, reviewing them, and then publishing them. One needs to follow a balanced approach. Being thoughtful about it but still finishing the process in less than a week or two. If it is your first time doing OKRs, then it’s okay to get going and get to even 75-80% accuracy in writing your OKRs and as time goes by, the team will become more and more proficient.
- Making OKRs an integral part of work-life: Once writing OKRs is done, organizations struggle with the second problem, which is how to make this part of your regular work-life. What sometimes happens is that teams and individuals put in the effort to craft great OKRs but then, they set them aside and revert to how they were doing things. OKR has to be at the right and center of what your team does every hour, every day, every week. Your team should be using this regularly to see where things stand and what needs to change. The OKR framework should be the guiding principle of how to review and prioritize ongoing work. Not making this integral, even if you write beautiful OKRs, seems to often come in the way of organizations adopting it very well.
- Doing OKRs only at the top: The downside of doing OKRs at a company level is that the people who are further down in the organization hierarchy are the ones who don’t understand why they are doing what they are doing. Only the people at the top usually understand the strategy and how it’s connected to execution. The bigger benefit of OKR is to people further down and this benefit is not realized by limiting the usage of OKRs only to the company or department level. The value multiplies the further you take it down in the organization. It has to be done carefully, not all in one shot. In a phased manner it should be taken further down, all the way to each individual in the organization.
- Connecting OKRs & individual performance: The fourth problem is connecting OKRs, sometimes too close to individual performance management. Some of the principles of OKRs are selling stretch goals to improve business performance. You set a stretch goal and it actually pushes teams and individuals to perform better. You need to think carefully about how a stretch goal aligns with the performance management process. If the OKR scores are directly used as individuals’ performance scores, then people will likely stop taking stretch goals and will stop taking risks, which will eventually hurt the business. Keeping these two separate allows the organization to use OKRs very well for the business performance, but still use it effectively in the context of individual performance feedback.
- Lack of proper change management: OKR is a very simple concept but it is still a change for the organization. Your organization has been working in a certain way for months or years and change is not very easy. This change may take some persistence to get right. The organization and the teams may see immediate benefits in terms of transparency, focus, and alignment. But to build muscle to learn how to write better OKRs, how to follow the cadence, how to do proper OKR reviews, will take effort and time. It usually takes a couple of cycles of doing OKRs to get it right. Teams that are patient and persistent, and teams that try this for at least two cycles often are able to master it and become really successful.
Tips To Get Started
- Take a phased approach: Start from the top by writing 3-5 company-level objectives and then take a phased approach. The top three levels of management, and the first three levels of the department — have them define their OKRs and have everyone else in the organization observe it for transparency but also for learning. They understand how the leaders are doing OKRs and in the next cycle or the next phase, take the OKRs from department level down to the team level. Have team level objectives but not yet individual objectives and in the next phase, take it down to the individuals. In every phase, what happens is, everyone else is still observing what the team is doing. They’re benefiting from the transparency and are learning how to do OKRs, ensuring immediate benefits. This approach also enables people to understand the methodology and adopt it more effectively and quickly.
- Bring OKRs into the daily workflow: We wrote about one of the pitfalls wherein people write OKRs and forget about it. You have to reduce the friction of your team in adopting OKRs. Asking people to do double data entry creates friction, so OKRs should be tracked and brought into the tools where they are doing their work every day. You can check out Qandle’s OKR module for this.
- Assign a champion & define a process for check-ins and reviews: You can assign champions within each team or department to make sure others are following the process. They are the ones who educate the team and provide help, define the system, and get the meetings scheduled. Initially, this kind of effort is needed to get the process going and after some time, it becomes similar to muscle memory. You don’t have to do it but having champions dedicated to making this process work seems to go a very long way in getting started.
- Reflect and grade progress at the end of your cycle: At the end of the quarter or whichever cycle you’re working in, make sure you take out the time to reflect and measure progress. Reflect on how your team is using the process, what is working for them, and what’s not working and improve the process as every cycle comes to an end.
Written by Pavleen Singh