OKRs (objectives and key results) took Silicon Valley by storm, and now companies are instituting them in an effort to be more agile and to keep their teams on track. As John Doerr outlines in his book Measure What Matters, OKRs can be used by companies looking for "a powerful, simple management system that provides clarity about what everyone should be working on and how their work will be measured." Since Doerr's book came out, OKRs have become a popular management framework in Silicon Valley and beyond. Companies like LinkedIn, Intel, eBay, Adobe Systems, and Intuit use them to align employees around strategy and measure success over time.
Objective-focused performance management is nothing new. Most companies already use some sort of performance-management system. However, OKRs are fundamentally different from other methods like forced rankings or balanced scorecards, because they measure tangible results instead of using vague actions or outputs.
What are OKRs? OKR stands for:
Objective: What is our company trying to accomplish?
Key Results: How will we measure success?
However, many companies struggle to implement them. Here are the most common pitfalls and how you can avoid them.
1. Setting goals is easy; achieving them is hard.
Most people think goal setting is easy, because it's a matter of picking something that seems fun or interesting, but achieving those objectives is much harder. In his book Work Rules! Laszlo Bock, former head of people operations at Google, says setting meaningful OKRs is the hardest part of the process. If you're having trouble setting great OKRs, it's a clue that your company culture needs improvement.
2. Your employees are not working toward a shared set of objectives.
If your employees' individual OKRs don't align with the company's overall OKRs, then you're just creating busywork. It's no surprise that most companies fail to keep their employees on track with quarterly OKRs when there is little alignment between the employees and company objectives. For example, if an employee's personal objective is to develop her professional skills, but your company's OKRs are all about growth, then she will have a difficult time making progress toward either goal.
3. Your objectives lack specificity, and the key results are not measurable.
All too often, companies create lists of activities for their employees with vague objectives like "improve customer satisfaction" or "increase sales through online channels." The problem with these types of goals is that it's hard to tell what success looks like. When a company creates objectives and key results that are measurable, employees can hold themselves accountable for delivering tangible results versus performing activities.
4. You placed too much weight on a single OKR.
Once a quarter, companies put too much weight on a single OKR--usually the most recent quarterly goal. This creates "goal conflict," with employees being pressured to work on activities that don't align with their overall career goals or objectives, because it's what the company currently values. Even worse, when one person is hyper-focused on a single area of the company, it stalls creativity and progress.
5. You're looking for one silver bullet.
When you're struggling to achieve your goals, it's easy to believe that if you could just find the right person, then everything would be fixed. This type of thinking is often wrong because companies need buy-in from everyone in order to get results. One person changing jobs won't fix all the issues within an OKR system.
6. Implementing objectives across the company takes too long.
When a company tries to pivot quickly without having a stable culture or framework in place, the opposite happens: chaos emerges instead of success. This is because employees need time to adapt their own work habits around a new set.
To effectively implement OKRs, take your team through these three steps:
- Develop a strategic plan for your company. Agree on a set of high-level goals, objectives and projects, which may take a year or more to implement.
- Chunk the work into priorities for the next quarter, including which projects must be done, in what order, supported by which resources.
- Have every employee develop their own OKRs, with the top three or four objectives and key results.
OKRs are a simple and immediate way to build collaboration and improve culture. If you want to boost performance and create alignment, look to utilize OKRs as a tool to get your employees on the same page.