At the core of every standup meeting, every micromanaging leader, every project management system, is the simple question: Are my people working on the right things?
Individual contributors also wonder if they’re working on the right things. Will leaders’ goals change? Are managers assigning the most impactful work? Am I just doing busy work?
In an effort to bridge the gap between an organization’s goals and what people do on a day-to-day basis, many leaders turn to OKRs (Objectives and Key Results), a framework for setting and measuring goals. Unfortunately, OKRs don’t work in every situation, and may even leave teams more frustrated (and overworked) than before. The good news? There’s an alternative—and it may not be what you suspect.
Why Leaders Consider OKRs
Leaders turn to OKRs for a variety of reasons:
- The wrong work is being prioritized
- Teams are misaligned and duplicating work—or even creating competing results
- It’s unclear (unintentionally or otherwise) what people are working on
- They’re not sure if teams are making progress
- Leaders and teams aren’t accountable for what they say they’ll do
- People aren’t motivated, and want more say in their work
OKRs promise a seemingly simple, elegant framework to all of these challenges: I will (objective) as measured by (key result). Not only is this solution straightforward, OKRs are an industry standard; Google co-founder Larry Page noted that “OKRs have helped lead us to 10x growth, many times over.” But, as you may have already guessed, they’re not the silver bullet leaders hope for.
How OKRs Are Supposed to Work (And Why They Don’t)
In an ideal world, OKRs follow a basic process:
- The CEO sets three to four objectives for the organization, which are cascaded down through the organization
- Direct reports then develop their own OKRs that support those objectives
- Direct reports and managers meet to review and approve OKRs
- Managers check in every quarter to ensure progress is being made
Here in the real world, this “simple” process often run into snags:
Executives can’t or won’t share (all) the objectives. The organization’s objectives must come from the top—but sometimes, they’re too sensitive (a big layoff, a major acquisition) to share broadly. Objectives are then either delayed, slowing down the entire process, or withheld, resulting in teams working on projects that won’t matter.
Not all objectives apply equally. Not all divisions should contribute to each of the objectives to the same degree, but this framework limits flexibility. Not only that, cascading objectives reinforces division boundaries within the organization, even when the goal of OKRs is to get teams working together.
Teams and individuals set the wrong objectives. Identifying the “right” objectives is more challenging than anticipated. Teams may try to “retrofit” existing projects into OKRs, or select objectives that don’t connect to the organization’s objectives. Managers must then “fix” the objectives, which defeats the purpose of having teams and individuals create their own.
Risk limits ambition. Despite recommendations that compensation not be tied to OKRs, many organizations still do it (because, let’s be honest, aren’t you paying people to achieve outcomes?) But this means that people will only set goals that they know they can reach or measure—even if they suspect another activity will deliver better results.
Measures are hard to identify. Teams don’t establish baselines, or they track progress or output (e.g., number of emails sent) as opposed to outcomes achieved (sales closed) because, quite frankly, it’s easier. In complex markets, it’s not always clear what metrics are the most appropriate measures of success.
Timelines are artificial. Teams set too large or unrealistic of a goal for one quarter—and that’s assuming they can accurately assess how much time anything will take. Or, they focus too much on the quarter and lose sight of the bigger picture.
And all of this takes time that organizations don’t have. It takes time to cascade goals up and down the organization. On top of that, teams spend time setting up and managing their OKRs (which often requires its own platform, an additional expense), and it may take several quarters to learn how to do OKRs correctly. As a result, professionals recommend rolling OKRs out slowly across the organization. But organizations don’t have years to set goals—they need to start seeing results as soon as possible.
In other words, a lot can and does go wrong because OKRs aren’t just a framework—they’re an entire system. Success requires not just the ability to set appropriate OKRs, but also a platform for managing and tracking OKRs across the organization, and a regular, repeatable organization-wide process for coordinating those OKRs. Rolling out this system is a massive imposition on teams that are already overworked, and when implementation inevitably falters, people become frustrated and abandon the effort. In our experience, OKRS are second only to Agile for companies struggling to achieve the “best” framework and feel like they’re failing.
Are OKRs Solving the Right Problem?
Despite all these drawbacks, companies persevere in attempting to implement OKRs because, well, what’s the alternative? You need some method to figure out what everyone is doing. But before you adopt OKRs, consider: Do you need a complete overhaul? How much time and effort is your organization truly willing to invest in a new system? And, would the organization be better served by confronting one specific problem to start?
Let’s get back to why leaders consider OKRs in the first place:
- The wrong work is being prioritized
- Teams are misaligned and duplicating work—or even creating competing results
- It’s unclear (unintentionally or otherwise) what people are working on
- They’re not sure if teams are making progress
- Leaders and teams aren’t accountable for what they say they’ll do
- People aren’t motivated, and want more say in their work
A closer look at these issues reveals different problems (and solutions):
If the wrong work is being prioritized…
- Maybe leaders need to do a better job of articulating the big picture and the tradeoffs they’re willing to make to achieve it
- Maybe leaders keep intervening with pet projects or directives—in which case, leaders need greater discipline, or teams need more power to push back
If teams are misaligned, or it’s unclear what people are working on…
- Maybe you need to increase transparency with a project management system
- Maybe you need to set up a regular schedule of teams sharing what they’re working on—even a regular end-of-week highlights email may be a good start
If it’s not clear if teams are making progress…
- Maybe you need to reassess metrics to determine if teams are measuring the right things
- Maybe you need to break big outcomes down into smaller, discrete goals that can be tracked on a regular basis
If leaders and teams aren’t accountable…
- Maybe executives need to serve as role models, and have conversations with leaders who are not delivering what they promise
- Maybe you need to re-evaluate your incentive structure so that people are rewarded for desired behaviors
If people aren’t feeling motivated:
- Maybe you need to create more psychological safety for people to more actively contribute
- Maybe they need greater autonomy or to reset expectations
In other words—OKRs aren’t required to solve these problems. If your organization is struggling with any of the above, it’s well worth trying smaller interventions to see if they improve outcomes.
Progress, Not Perfection
We’re not saying organizations should never adopt OKRs, or that they’re not the right answer for some organizational experiments. But they also shouldn’t be the default. Starting with targeted improvements and limited rollouts means you’ll get immediate feedback on what’s working (or not) and immediately relieve some of the organization’s pain points. In fact, after a few interventions, many organizations discover they don’t need OKRs after all. Contact us to learn more about the right solution for your organization.
