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
- have transparency (who receives a bonus and who not, what payrate)
- have engagement
you already need all of these before adopting OKRs
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
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
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
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
How can you influence the Company OKR?
First, focus on the customer and the teams closest to the customer
- Customer Services
- User Researches
- -> 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
- 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
Those teams typically don’t impact customer oriented OKRs.
More capacity to define their own OKRs.
Lastly, the governance layer
- 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
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
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