7 reasons why OKRs won't last

Objectives and Key Results (OKRs) has gained momentum as a goal-setting framework.?

They represented progress over KPIs. And we needed to do better than KPIs.

They were sold as the key to organisational alignment and focus - a guaranteed way to out-manoeuvre competitors and beat the world.

OKRs started with Google - and Google has been very successful - and so one of Google's early investors wrote a book?about OKRs to cash in. Who doesn't want to be as successful as Google?

But OKRs are riddled with design flaws. Most people find them confusing. Most companies take 1 year to do a half-decent job of it.?

Surely that’s not the best we can do?

No, it's not the best. There is a far simpler and more scalable solution, which we'll get to.

But first...

Why OKRs don't work

Here are the 3 problems that OKRs are meant to solve in theory:

1. Employees not having the right priorities (lack of direction)
2. Managers/ team leads not knowing what employees are working on and what their progress is (lack of insight)
3. Teams not knowing what other teams are working on (lack of transparency)

And here are the 7 reasons why OKRs fail in practice.

1. “You should expect to get it wrong the first 3-4 quarters.”

This is straight from the rule book,?Measure What Matters?by John?Doerr.

The reader/ CEO is cautioned that this is the cost of getting goals right across the organisation.

Huh??

Which companies and employees have the time or patience for something that takes a year to get right?

If you're a tech company with 2 years' cash runway - how can you afford to screw around with goal setting for half that time?

Can't we make goal management work from day 1, without adding any training or any additional internal meetings? Yes, we can.

2. "What's the difference between an Objective and a Key Result?"

I can't tell you how many times I got this question when running OKR?implementation workshops. And I completely sympathised with the employee asking the question.

Because this is the most succinct and robust answer:

• An Objective is a goal.
• A Key Result is also a goal.
• The Key Result must be able to be measured by a number.
• The?Objective can also often measured by a number.
• The Key Results helps you achieve the Objective.
• Often, the company's Key?Results become the Objectives for some teams.

Let’s just talk in terms of?Priorities, everyone gets that.

Below are just some of the many vague graphics designed by 'OKR Champions' that are meant to simplify and clarify this for the average employee.

They are nothing more than 45 minutes of wasted PowerPoint time.

3. The need to set 'unachievable goals’

While great in theory, this makes people uncomfortable in practice.

It creates anxiety and confusion, which causes people to disengage from the process.

It's also misaligned to the way most employees are given work from their manager.

"I need you to work on these 3-5 things this quarter. You shouldn't finish them. You should get about 70-80% of the way there."

"Um, OK, so I'll finish them next quarter?"

"No, next quarter we will have new stuff to work on."

"Right."

Sure, the?company?should have a big, ambitious mission. But telling your people that every quarter they need to set a goal that makes them fail is a strange pill to swallow. Especially if their manager and team do not operate that way.

It's one thing to start tracking all the workstreams that are taking place. It's a whole other thing to try change the way your staff measure their own value to the business.

4. Requiring goals to be set in a cascading fashion

OKRs require that the CEO first sets the company OKRs. Once they are set, these form the basis for the team leads to set their team/ department OKRs. Then, team leads work with managers and employees to set each employees personal OKRs.

It's exhausting just typing out that process. And it's frustrating when the first match fails to light.

Howamigoing used to offer OKRs as a feature. We subsequently dropped it from our platform as our customers were dropping it from their performance management process.

Below was the OKR implementation timeline for a 35 person tech company we worked with. They were incredibly excited about putting in place their new goal management framework - with the CEO being part of a kick-off workshop.

Yes, it actually took that long for a small, agile company to set their goals. And not just in their first quarter, but the first 3 quarters.

And here was the timeline for a 180 person company that used 9 month OKRs.

Here's the thing: your people are already working on things that are connected to the company's mission.

Sure, some priorities could probably be sharpened, but should you really have to wait months to sharpen and post online what they're working on?

5. Recording your progress on a scale of 0-1.

This is stupidly arbitrary and just adds to the already high levels of confusion and frustration for employees. A great example of not simply copying everything that Google does.

There is no bigger waste of mental energy than debating whether your workstream progress is at 0.5 or 0.6, or 0.7 or 0.8, or 0.2 or 0.3.

Why not save everyone the mental anguish and use a scale that aligns with how we communicate to team members? E.g.

Not started - Part-way - Half-way - Almost there - Done!

If you're working on a particle accelerator, yes, please measure your progress in decimal points.

If you're not working on ground-breaking physics experiments, it's OK to take a more human approach to your status updates.

6. Trying to fit workstreams into 3 month chunks

As children we quickly learn that trying to fit a square peg into a round hole is futile.

As adults we seem to have forgotten that. And so, much time and energy is wasted trying to stack and slice workstreams such that 3-5 things can be neatly folded into a quarter.

This isn't so bad for some teams where the workstreams are small and align to financial quarters (e.g. Sales), but it can be incredibly frustrating for non-linear project work that is difficult to estimate more than 1 week into the future (e.g. software?development).

7. OKRs connected to compensation

Even the father of OKRs, John Doerr, advises against this in his book and interviews.

Yet many disciples choose not to follow the Gospel according to John.

By tying pay rises and bonuses to the achievement of goals, people naturally reduce the difficulty of their goals. This completely defeats the purpose of setting stretch goals.

"Hey honey, how was your performance review?"

"Great!?My manager said I was far more productive than anyone else in the team!"

"Great! Good bonus then?"

"No bonus sadly. I set my OKRs to be far harder than anyone else in the team."

If you're having trouble deciding how to fairly allocate pay rises and bonuses, read?this article.

Simplifying goals with Bottom-up Priorities (BUPs)

As mentioned before, OKRs do represent progress over KPIs.

• It's important for a company to have a strategic direction
• It's important for managers to be aware of this direction and prioritise work accordingly
• It's important for everyone to know if they're on track

But there's no need to construct new councils, dams and levies when fortifying and illuminating river banks will help water get downstream quicker.

Our proposed solution at Howamigoing is called?Bottom-up Priorities, or?BUPs?for short. It can't be a goal-management process without a 3 letter acronym right?!

BUPs take the good elements from OKRs and leave out all the unnecessary meetings, planning and politics.

Here's how BUPs work

Rather than get carried away with an arbitrary number of Objectives and Key Results for the company and its departments, teams and individuals every 3/6/12 months, the process works like this:

1. Every employee posts their next 3 deliverables online, stating the output and due date
2. They update the status of each deliverable as progress is made (Not started/ Part way/ Half way/ Almost there/ Done!)
3. When a deliverable is done, the employee adds a new one, to top it back up to 3
4. Everyone can see each other’s deliverables, subject to confidentiality of projects

This way, we start by getting all current work onto a shared platform, rather than re-engineering the way people work.

This way, it will be revealed soon enough if there's a leak in the bucket from company priorities to individual priorities, rather than assuming a leak exists.

This way, it's easier to adjust course if such a leak exists, as everyone is already in the habit of stating and updating their deliverables.

3 reasons why BUPs are better than OKRs

1. Far simpler, because there's no new terminology to introduce and no training required
2. Far quicker, because it takes days rather than months without cascading from CEO to intern
3. Far stickier, because individuals have more ownership of the process and are therefore more bought-in

Howamigoing is working on a Beta for BUPs. To get early access for free, send an email to [email protected].