Effective OKRs — getting them right the first time around.
Objectives and Key Results (OKR) is a popular management strategy for goal setting within organizations. The purpose of OKRs is to connect company, team, and personal goals to measurable results while having all team members and leaders work together in one, unified direction.
This post will cover how effective and detrimental OKR implementations look like, how to draft good ones and what should one keep in mind after they have been implemented. Implementing OKRs is a process that takes usually three to four quarters as everyone starts to structure their work around them, this post gives pointers designed to get there faster.
Summary of OKRs
OKR (Objectives and Key Results) is a goal-setting framework that helps companies focus, communicate and align their work. OKRs consist of objectives — clearly defined goals and key results — specific measures used to track the achievement of that goal. OKRs are usually set quarterly, starting with company-level OKRs which every team will align themselves to.
Well implemented OKR system will result in:
- Alignment between teams and within a team
- Better cooperation between teams due to shared vocabulary
- Better communication due to a format understandable to everyone in the company
- Getting more things done because of focus
- Getting the right things done because of planning
- Optimizing for what’s best for the company, instead of individual team/person
Badly implemented OKRs might result in:
- Multiple weeks per quarter of management overhead
- Getting the wrong things done
- Unempowering people
- Bad inter-team cooperation because team individual targets need to be met
In order to reap the benefits of OKRs and be in the “well implemented” camp, you need to keep in mind a couple of things:
1. Don’t measure performance with OKRs
People are often afraid to take OKRs into use because of fear of being graded on how they do on their targets. Go out of your way to stand against it. OKRs are a tool to reach for ambitious targets and achieve them, using them as a measurement of performance will demotivate and cause low-shot performance. After all, setting lower goals is a way to always achieve 100% of your goals.
2. Include people executing into the drafting process
OKRs have a strong potential to become the internal motivation for a team. One of the best ways to achieve this is to have all the relevant people discuss and propose changes to the initial drafts of OKRs. This will pay back down the line with motivated executors and courage to speak up when OKRs become invalid.
3. Put time and effort into drafting OKRs
OKRs will define what you will be doing for the next 3 months. They are a multiplier for speed and a direction where you want to go. If the direction is incorrect you will not be achieving the right things. When OKRs are badly phrased you will lose in productivity. We will cover how to get more speed out of OKRs later on, direction needs to come from you.
4. Deprecate or rephrase OKRs when they lose relevance
Even if OKRs are not used for measuring performance, people feel that they need to deliver on things they have agreed on — writing goals down has a strong effect. When the goal itself becomes invalid but the expectation is still there, there is a disconnect with reality which causes wasted work and demotivation. More on how to deprecate and rephrase effectively later on.
Drafting OKRs — self-tests for maximum speed.
In order to get as much bang for your buck, you can use these self-tests for setting OKRs.
1. Is more than 80% of teams work covered in OKRs?
One of the keywords of OKRs is focus. What does your team need to achieve? If you dropped everything that isn’t alignable with OKRs what will you not cover? Asking these questions in the drafting process will allow you to say “no” down the line when a whirlwind of request comes in for urgent and unimportant stuff. If something important is not covered, add it to your OKRs.
2. Are my OKRs continuously measurable?
Best OKRs are highly measurable on multiple timescales. Can an individual measure their own work output with the same metric? How much time does it take to get a reliable estimate? If the output is measurable within 10 minutes of making the change, this is a huge improvement to productivity and motivation. Often times it seems that some OKR cannot be phrased in a continuous manner so it is phrased as a binary answer. Fight against yes and no phrasings and spend a little bit more time before deciding to stick to them. From binary to continuously measurable there is a gradient. Try to nudge your OKRs towards measurability.
3. Are my OKRs ambitious and reachable enough?
70% of an OKR should be reachable. 100% is ambitious. When you estimate where you can get optimistically, set that on 70% on the achievement scale.
4. Are they aligned with other teams and top-level OKRs?
Are you solving problems no-one cares about or are you actually helping the company? It might be that some OKRs aren’t useful this quarter, but when will they be? Are you sure you should be working on something that will not be useful within 3 months? Asking these questions will make sure you are working in the right direction.
5. Are they output driven and promote agency?
Most of my attempts to write input into the OKRs have caused them to get deprecated because a better alternative existed. Instead, write down why do you want to do that work. E.g. “Write 3 blog posts” can be phrased as “Increase reach to 10000 people”. This allows for creativity and more efficient work. Writing down key initiatives is still a good idea, just don’t forget to say they are optional as opposed to OKRs.
6. Assign a singular owner to each OKR
This simply means a person for each line in the OKRs table, who is responsible to get it done.
During the quarter.
1. Push back on urgent and not important
Whenever something comes up that doesn’t align with your OKRs ask yourself if you can work on something from your OKRs instead. Keep in mind that only 20% of your time budget will be spent on things other than your OKRs and this includes the unforeseen emergencies like all your servers catching fire because of a denial of service attack.
2. Deprecate and remake OKRs explicitly
When it becomes apparent that an OKR didn’t age well, then it is important to explicitly fail, deprecate or remake it. When there’s ambiguity in what needs to get done, it creates confusion about priorities and jeopardizes the credibility of other OKRs. This most recognizably creates inefficiency when work is being done on the goal no longer relevant. Make sure the decision is definitive and every stakeholder is on board. Unless explicitly communicated, it is not OK to make 0% progress on an OKR.
3. Talk about OKRs in a weekly and monthly cadence
Have the OKRs visible as much as possible, talk about blockers weekly, fill in the OKR progress sheet monthly. In a world full of noise it is important to repeat the direction to move towards. Managers often feel like broken records repeating the same things over and over again, but research has shown (reference missing), that moving from unknowledgeable to action takes 7 to 15 repetitions of what needs to be done. Staying honest to yourself is hard and embedding it into your cadence will help you and your team do that.
Notes:
[1] Thanks to Taivo Pungas, and Triin Uustalu for reviewing this blog post.
