OKRs - the good, the bad and the ugly

A quote from a recent client: “We don’t do the important stuff…because we won’t do anything that is NOT our OKRs”. Also: “OKRs give me performance anxiety :-(”

Mercurial Phoenix, product consultant

OKR = Object and Key Results

very much a buzzword

before they were called goals or MBO (management by objective)

Hype, hype, hype

Google, Netflix, Deliveroo use OKRs

they are so great at creating alignment amongst teams and focus

and yet this is what we hear

  • we do not do the important stuff … because we won’t do anything that is NOT our OKR
  • we never achieve our OKRs … they are too ambitious -> performance anxiety, bonus pay
  • can’t figure out the right metrics … and then how to even measure these, example customer satisfaction

Good OKRs emerge when the company culture is already focused on

  • radical focus: only doing one thing at the org level
  • team alignment
  • impact
  • have transparency (who receives a bonus and who not, what payrate)
  • have engagement

you already need all of these before adopting OKRs

Good #OKRs emerge when the company #culture is already focussed on radical focus, alignment, impact, transparency. Great talk by Neha Datt. #AOTB2022 #Agile

Good OKRs emerge when company culture is focussed

– Vimla Appadoo - on mat leave (@ThatGirlVim), Jul 7, 2022

We can be successful if …

  • we focus on shaping a culture of (the above)
  • we have a common understanding of what “good” OKRs mean

Create a common understanding

OKRs are a goal-setting experimentation methodology … and NOT a work or performance management methodology!!!

decouple performance management from OKRs then you can actually experiment with it

OKRs ask 3 questions

  • where do I want to go? Objectives
  • how do I know I’m getting there? Key Results
  • what do I think are the next steps? Experiments -> very much incremental

less than 10% of experiments succeed! -> it’s important to define experiments well

Really enjoying this talk by @oliphantism - seeing #OKRs as experiments rather than performance management.

– Vimla Appadoo - on mat leave (@ThatGirlVim), Jul 7, 2022

How we set OKRs?

  • Figure out your OKRs capacity -> because OKRs don’t capture all work
  • Set your company OKR -> so the most important strategic outcome is clear
  • Set your team OKR -> so all teams know what impact they’ll have on the strategic outcome
  • Experiment, learn, adapt

OKRs capacity

considerations to take:

  • how much debt?
  • how reactive?
  • how to innovate?

how much time is spent on:

  • Maintenance: 40%? (BAU, technical debt, monitoring, support, …)
  • Optimisation: 30%? (monitor and optimise existing propositions and journeys)
  • OKRs: 30%? (discover, test and deliver new propositions and fundamental journey changes)

not all OKRs will necessarily come from your company OKR some OKRs will come from the team itself

Company OKR

a good practice to use both company OKRs and team OKRs

ideally one or two company objectives, typically for 6 months to max 1 year -> a couple of OKRs

the teams that impact the company objective derive their OKR from the company objective

the other teams define their own OKRs

company OKR will either focus on:

  • something valuable for the customer
  • company revenue: that is more problematic for teams to know how to have an impact, they usually do not have access to that information
  • internally focussed: ex. during Covid one company OKR was keep their ship afloat
  • something valuable for the investors: plan an IPO

Team OKR

How can you influence the Company OKR?

First, focus on the customer and the teams closest to the customer

  • Customer Services
  • User Researches
  • Sales
  • Marketing
  • -> the teams providing services to the customer

these are the first teams to set up their Team OKRs, because they impact the Company OKRs directly

Next, the teams that support those teams

  • Security
  • Ops
  • IT
  • other teams …
  • -> they support the teams that support the customer

How can the supporting teams support the customer facing teams in achieving their OKRs

=> Shared OKRs

The next level of teams:

  • Business Services teams: not focussed on the customer, but focussed on running the business
    • Finance
    • Legal
    • HR

Those teams typically don’t impact customer oriented OKRs.

More capacity to define their own OKRs.

Lastly, the governance layer

  • Portfolio
  • the Board

generally, no OKRs set at that level

If we focus on the customer and the teams closes to them, then we iteratively further work out.

Every team has their OKR capacity, and then we start to reduce, reduce and reduce and whatever is left is what is used to set their own OKRs.

=> reduces confusion, because it prevents teams to set OKRs in all directions

=> have as many teams as possible focussed at achieving that single Company OKR

Shared OKRs create greater alignment, impact and focus …

… which is hte purpose of OKRs

When introducing different OKRs for different teams smells like work management, can we track what the different teams are doing.

Experiment, learn, adapt

3 buckets of work

  • BAU
  • Maintenance
  • OKR

you need to understand the cadence of all 3 buckets of work

on daily, weekly, monthly and yearly reviews we need to celebrate all 3 types of work

often orgs forget to celebrate BAU and Maintenance and only speak about OKR

Take away

  • do we have a common/consistent definition of OKR?

    -> can we set good OKRs

  • are we measuring our current capacity?
  • can we do all of our work, do we have permission to also work on something else than OKRs, can we keep leadership away from teams because we trust teams
  • can we experiment well
  • do we get rewarded if we do the right thing, or are we punished if we did the wrong bad

    -> the response of leadership teams towards failure is really important for the successful adoption of OKR