Deciding to implement an OKR Program at an organization is a big deal.
Very few things in this world communicate that an organization really means business more so than implementing an OKR Program.
Why? Because nobody goes through all of the effort of rolling out an OKR Program just so they can say:
“We have an OKR Program. So what, it’s mediocre, but yes, we do have one…”
That’s not how the world works, and for good reasons. Everything you do, and everything your organization does is aimed at achieving something! More revenue, less cost, more free time, better health, whatever it is (The order of the list does not reflect any priority in any way).
Similarly, organizations implement OKRs because they are serious about getting the right business results.
- Not because they need another framework
- Not because they need another strategic initiative
- Not because they need another software
Instead, Organizations implement OKRs because they want to
- Improve efficiency and productivity
- Solve for misaligned execution
- Break open silos and foster collaboration
- Gain transparency into strategy initiatives
- React faster to change
- Enable cross-functional collaboration
- Support global remote teams
- and many many many more reasons.
In essence, they choose OKRs because they want their strategy to (actually) happen.
(Note: If you are using OKRs in your organization and you do NOT have a clear ‘why’, we urge you to consider getting transparency on the impact you intend to drive. One easy way is to implement “OKRs for OKRs” – meaning to create, track and execute clear and aspirational Objectives and outcome focused Key Results for your OKR program itself, so goals to track why you’re doing OKRs in the first place. The added benefit: If you’re new to OKRs, this is a great way to get practical experience quickly, as you set OKRs for your OKR program, before you launch it publicly.)
Now, after the why of doing OKRs, comes the questions of how (and how not to). So, what are the critical elements where most OKR programs fall short, and thus fail to deliver on the best possible impact they could have on the organization?
To cut right to the chase, the proven areas that unlock success for OKR programs, and thus unfortunately the areas where many organizations fall into avoidable traps and have their OKR programs fail, are:
- Gather and sustain executive buy-in and support for the OKR program
- Drive focused change with a limited number of select high-level and high-priority Objectives that the organization wants to achieve
- Go big and align vast parts of the organization quickly, without leaving transparency and alignment gaps between departments and business groups
- Use the momentum of your OKR program and focus your change management efforts on early adopters to showcase value quickly
The four steps above are distilled from the experience of our OKR coaches and managers. Yet, in the article “The impact of agility: How to shape your organization to compete”, McKinsey calls out similar steps that an organization must follow in order to implement an agile organization and calls it the ‘the four-step recipe for success’.
Now, OKRs and agile are not the same, but they’re strongly related. OKRs in essence are a goal setting framework, of course. Yet, OKRs are only truly effective if embedded in the way an organization plans, reviews, adjusts course of actions, and communicates – or in short: The rhythm through which an organization is operated. Our friends over at WorkBoard call this the Digital Operating Rhythm and together with the Outcome Mindset Method™ it builds the foundation for focused operating agility, based on transparent and aligned goals and accountability.
Now, McKinsey refers to these steps slightly differently, calling them:
- Step 1: Ensure the top team gets it
- Step 2: Be intentional and go after value
- Step 3: Go beyond agile teams and build connectivity tissue
- Step 4: Maintain a high speed and use front-runners
And according to their research, if implemented correctly, following this recipe can bring the chance of a successful implementation up to 75%. We call this OKRs at Scale, and it is the bedrock of all our work for international enterprises and startups alike.
Let’s take a deeper look into each of the areas:
Gather and sustain executive buy-in and support for the OKR program
It’s true: OKRs can work in isolation for a team. Yet, if you back up to the bit on “OKRs for OKRs”, you realize that if your “OKRs for OKRs” included topics like ‘Transparency’, ‘Alignment’, ‘Dependencies’, ‘Agility’, ‘Accountability’, then those cannot be driven in isolation. You cannot be aligned in isolation or realize gains through compartmentalized transparency. Instead, if you want to transform your organization, you need executive buy-in to drive this initiative with the governance and support it deserves, and that means continued and quite vocal executive buy-in. Often, after an initial kick-off, communication from executive leadership teams ebb down, and half a year into the program you’ll start hearing your teams asking questions like “Are we still doing OKRs?” or “Is this still a thing?”. To counter that, you need repeated org-wide communication ‘from the top’ that continuously reinforces the new ‘way of doing things’ and the new goals. Without it, it’ll be increasingly difficult to increase accountability. Because how can people follow any direction given with OKRs, if they’re not even sure the concept is still alive?
Drive focused change with a limited number of select high-level and high-priority Objectives that the organization wants to achieve
With OKRs, you’re implementing a clearly communicated and understood focus on key shifts and strategic priorities to your organization. This focus gets localized into subsequent OKRs by the teams themselves to align ownership and accountability with clear outcomes and impact. Now, for this to be successful (and effective) we want to focus on a small number of goals. Often times, we refer to “a handful of OKRs”, which would be 5. Yet, the more focused you are in your messaging, the more focused your organization will be in its achievements.
Consider the current economic landscape, your competitors, your vision, and your mission. What are the strategic shifts that are required for your organization to be successful and achieve their goals? If that questions makes you think of a meandering pathway with many turns and curves, then image how difficult it will be for your organization to follow you on that path. Can you (as the leadership team) instead agree on three objectives only? All with a select few Key Results? If so, then you’re on the right track and according to McKinsey have given yourself an extra 25% chance of success.
Go big and align vast parts of the organization quickly, without leaving transparency and alignment gaps between departments and business groups
We get it. Change is difficult and costly, and change on an organization-wide scale, especially for organizations of 500, 5000 or even 50,000 employees – is a daring task. (if you want to hear some success stories, please reach out and we’ll happily send you some case studies on our work). Facing this challenge, it is wise to take cautious first steps and gain a detailed picture of the road to OKR success. That means creating a detailed plan on the different phases of a roll-out, gaining clarity on how to localize the OKRs, the communications around it, the systems that fuel your new operating rhythm and more. While caution and detailed planning is important, so is pace and momentum. Often, we see organizations in Year 2 of an OKR pilot, with little traction in a small part of the organization, for example only the upper to mid management levels of a single department, excluding other departments, cross-functional dependencies, and the people that actually do the work, the individual contributors, the front-line executioners. While pilots are great to get quick, first experience, gather learnings and improve the process, a pilot should be followed by an executive decision to go big. Why? Because of the many benefits of OKRs, transparency and alignment are the greatest. And without cross-department implementation of OKRs, any cross-departmental transparency or alignment loses much of its effect and benefit. Similarly, the most effective OKRs are fueled by an operating rhythm that is built on transparency, reviews, agile execution, and accountability at all levels. Keeping OKRs siloed in an organization means running two operating rhythms at the same time, at different paces, at different places. Instead, rally your entire organization around OKRs to truly gain the benefits of an organization that has clarity, accountability, and pace.
Use the momentum of your OKR program and focus your change management efforts on early adopters to showcase value quickly
The way of getting to the aforementioned experiences, gather learnings and gain momentum is to focus on the change leaders and early adopters. Instead of focusing on resistors and attempting to move the entire organization along the change curve of an OKR implementation. Now, our friends over at WorkBoard have created a beautiful overview of different change personas and the best communication techniques to approach them. Here it is. There is of course nothing wrong with any of these change types. On the contrary, as an organization you benefit from a great diversity of more change promoting and change-averse characters, to avoid rushing into decision head over heels. Yet, the more reluctant to change, the less of a focus the persona should be at the beginning. Instead of spending resources working to convince the inconvincible, focus on early change adopters to create tangible value quickly and proof the effectiveness in your organization. That way, more change-averse personas can experience the positivity of OKRs as created and experience by the change leaders and early adopters – if the appropriate communications have been set to spread the word and share the success across the organization.
If you want to learn more about you can improve the effectiveness of your OKR program in your organization, please reach out!