Why OKRs aren’t for everyone

Common challenges and mistakes organizations make with OKRs.

 

The OKR goal management framework can be a powerful system that helps organizations implement strategy and drive teams forward. OKRs typically consist of 3 to 5 objectives (defining an ambitious, inspirational goal), up to 5 key results per objective (specific, aggressive and time bound outcomes) to measure progress, and often a set of initiatives required to drive progress against the key results.

Derived from Peter Drucker’s Management by Objectives philosophy, OKRs were created by Andy Grove at Intel and further taught to John Doerr. Since then, many companies have adopted them, including Amazon, Adobe, Facebook, Spotify, and the early adopter, Google.

While they can certainly be instrumental in helping organizations grow, OKRs aren’t necessarily a right fit for every team or organization. In this post we’ll share what we’ve observed to be some common practical challenges with OKR implementation, from our experience in working with different businesses – as well as our own teams.

1. Significant investment of administrative time and effort at first

Helping team leaders fully understand the methodology and set appropriate key results with just the right amount of stretch takes organizations anywhere between 1 to 2 years to get right. Organizations needing an OKR coach at all times, ill-equipped managers defining KRs as outputs not outcomes, managers spoon-feeding tasks to be done as the ‘how’ against objectives without driving ownership of key results, leadership requiring a planning and review buffer between every OKR cycle, HR requiring an additional dedicated tool to track OKRs – the list goes on and on.

Successfully deploying the OKR framework requires the willingness to invest a certain degree of administrative effort by people managers and HR alike – something many fast-growing companies just don’t have the time for.

2. Unsuitable cadence for some contexts

Google and many others suggest that teams should plan their OKRs for a quarter at a time. That may work brilliantly for Google, but it may not be right for many others. Small startups typically move very fast, so holding on for 3 months can seem like an eternity. Similarly in larger organizations, some projects require many months if not years to be dedicated to the same objective. The basic rule here is: the faster the change, shorter the planning cadence. When limited by the wrong cadence, teams lose interest very quickly and stop updating their OKRs. Often, teams will report that their OKRs are obsolete or irrelevant by the time the quarter is over. Once the team stops paying close attention to their OKRs, the process is just a matter of going through the motions without any real gains.

3. Difficulty in isolating key results for cross-functional teams

In many organizations, you’ll often find multiple pieces of a large puzzle impacting similar results. It is even more relevant for cross-functional teams bringing together differently skilled individuals for a common project or goal. For example, consider ‘increasing conversions by 10%’ for a particular product – it’s impacted both by how well marketing targets the right kind of traffic and how well the product team is able to improve product quality. If marketing perfects lead acquisition they could bring about 10% increase in conversions without any product improvement. Similarly, the product folks could come up with great enhancements which go unnoticed if marketing ends up buying the wrong kind of leads.

Some try to combat this by giving all contributing team members the same objectives. When this is done, the objectives end up becoming too broad based and lose their direct relevance to many individual contributors. Coupled with a lack of coaching from project leaders on the contributing tasks to be carried out by each team member, it often leads to employees struggling with what to prioritise first and results in them feeling more detached and disengaged with time.

4. Viewing human effort in only black and white

OKRs by themselves can be very limiting when it comes appreciating human effort and behavior displayed, as they fail to go beyond the binary question – “was the key result for this objective achieved or not?”

To genuinely improve performance and develop people, organizations need to go beyond tracking progress against goals and focus on continuous communication for feedback and recognition. Meaningful conversations around actions taken and behavior displayed need to take place in 1:1s, team check-ins, and even through continuous performance management tools
if available. They should show appreciation when something is done well, and show employees how their display of a company value or a particular skill has contributed
to the team’s success. They should also give team members an opportunity to communicate with their supervisors about what they need to do to be successful and the support they need to get there. Unfortunately, most organizations that try to implement OKRs forget about the importance of driving continuous communication in tandem.

5. Inability to account for process adherence or improvement

OKRs are usually focused on business outcomes, and the overall philosophy behind OKRs makes it harder to set objectives around processes. Process improvement (like improving innovation) is considered more ‘fuzzy’ compared to ‘sharp’ business outcomes (like improving lead conversions), and when teams are presented with both, it becomes hard to prioritize between the two as they are designed on totally different levels.

And in some cases, it is important to monitor day to day process adherence (like ticket closure TAT in customer service teams) and forcefully adding stretch goals ends up doing more harm than good. Teams are then required to add another layer of goal management, which snowballs into administrative hell when performance reviews come around.

Because of the sheer popularity of OKRs (and advent of OKR implementation tools), there are a lot of rules and ‘best practices’ around the right way to implement OKRs. However one has to remember OKRs are only a tool, a means to help organizations achieve business outcomes. Trying to follow methodologies blindly when they don’t make sense, is a quick road to bureaucracy and before you know it your new age continuous performance management system would have become your biggest bottleneck in achieving what it was meant to do – help you manage performance continuously.

Mesh, a continuous performance management tool designed for today’s workforce, helps you break away from the chains and ‘rules’ of specific methodologies like KPIs and OKRs by bringing in a degree of flexibility around how goal setting and progress tracking depending on your unique context and maturity of people processes. Furthermore, it helps you enable continuous feedback and social recognition around both – effort and outcomes. By doing this it helps you do away with the need for 4-5 management tools and time consuming processes around performance management and people development. People managers find it easy to allocate goals and track progress, employees find it easy to get relevant feedback and appreciation, and HR finds it easy to gather useful insights for talent related decisions – it’s a win-win-win.

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