#5 - Do you speak OKR?

OKR is a management framework designed in the 70’s by Intel and made popular by Google in the 90’s. Many tech companies are using it (actually, most startups do). Yet, fewer traditional organizations have crossed the line.

There are proponents (I definitely am) and more skeptical opinions about OKR. “It works for tech, but not for a traditional organization”, “It doesn’t scale for large companies” is what I often hear.

I have used OKR at , championed OKR at , and sponsored OKR at . These are my learnings. But before this, I’ll explain what OKR is about.

OKR in a nutshell

O stands for Objective, KR for Key Result

• OKR is about defining a limited set of Objectives which materialize WHAT the organization aims at achieving: the strategic issues it has to solve, its ambitions.
• For each Objective, a few Key Results are defined: these are metrics which reflect HOW we get to the objectives, time-assigned variables to be put under control to reach the objectives.

Ultimately, an organization comes up with, say, three Objectives and two or three KRs for each, to synthesize its path to success.

For those who want to go into details, there are lots of resources on the internet about OKR: among them, here is an article from Bain, or a summary of the OKR bible.

“Then, that’s just another name for Management By Objectives? ” Actually, it comes from there but this is much more than this.

What makes OKR specific?

Outcome driven. OKR doesn’t consist of a list of actions to be completed, but outcomes to be achieved. Based on this, teams take actions and check upon their impact. Shouldn’t the actions impact the KR, then teams revise their plan. It means that KR monitoring drives an iterative process. This is not just about ticking a to-do-list.

Push for amazing. SMART objectives are meant to be “Achievable”, OKR not necessarily. I like the expression about OKR being uncomfortably exciting, that is achievable provided one thinks outside of the box. Reaching 100% of the KR would thus reflect a poor KR setting! This is beyond stretching outcome, this is about finding alternative paths for enhanced outcome.

Radical focus. A standard human brain cannot cope with 10 simultaneous objectives. Same goes with OKR. Teams should address genuine priorities, explicitly discarding other topics. This also means that teams should align their agenda to the assigned priorities. Focused energy is the name of the game.

Short cycles. OKR are defined for a short time horizon, e.g. every quarter. At the end of a given period, teams reflect on achievements and decide upon the next cycle: should we continue on the same objectives, stretching / changing KRs? Should we amend Objectives to address the next ambition or refine the current one? One-year budget is too long a period not to challenge the trajectory in between; then, the point is to adjust in a structured manner.

The OKR paradigm

OKR is a framework, OKR is a process. It sets a dynamic for team work, thus favors certain behavior throughout the organization. It has a clear echo with corporate culture. This is where planet should be aligned to get the most of OKRs.

Collective commitment

OKR is super powerful in sharing the vision to all team members, since it translates objectives in a concise and measurable way.

• This is about transparency, being open to admit what works and what doesn’t in the OKR journey.
• This addresses the role of managers: where MBO is a top-down driven process, OKR relies on teams to find the right solutions against defined OKRs. Thus, managers should first let teams go; second, they should promote transversality which may not be spontaneous in vertically organized companies.

Autonomy, accountability, alignment

On an individual level, we have these three patterns I already mentioned. My views on order of complexity goes like this:

• Autonomy may be easier to prompt in tech / product / agile teams, familiar working on a “project” mode.
• Accountability is not given for granted in every organization. It deals with the way responsibility is truly distributed at the lowest level of the organization, how initiative is encouraged, how failure and risk are managed.
• Alignment stands at the crossroads of the definition of OKRs (rather driven by the management) and the fieldwork driving to the fulfillment of OKRs. The OKR framework prevents teams to pursue diverging initiatives, managers are also key in adjusting when necessary.

Iteration and continuous improvement

OKRs are set for short term cycles. Within a given cycle, teams iterate on the best way to hit the target KR. Teams involved organize rituals to reflect on KR achievements and also on how they operate as a group of people. The impact of using OKRs goes beyond their operational outcome.

• Teams become more agile, considering “pivot” as part of the game; teams are comfortable progressing on an incremental mode. In a nutshell, OKR is a natural complement (or first step) to agile methodologies.
• The community involved in OKRs turns into a learning organization: they become familiar with identifying the link between action and impact on a KR, leveraging learnings from failures. It all makes a stronger organization to face any adverse situation.

What’s in it for me?

What I call the “OKR paradigm” is very nice to describe, but it can be taken as a constraint: ”my teams don’t behave like this, and they won’t”. Even in that case, OKRs could be used as an opportunity to ignite change!

You could also object that OKRs are made for tech companies or startups. It is true to say that when a company starts from scratch, it is 100% dedicated to building its product, therefore this framework is a natural fit. From another perspective, any mature organization, be it an insurance player, has a product to build, a market reach to enhance. Therefore OKRs can be a great fit as well.

The beauty of the framework lies in its plasticity. The point is first to determine the purpose of using OKRs. Adopting OKRs for the sake of looking like a startup is a wrong choice. From what I mentioned before, there are severals levers that can benefit from the framework in any mature organization:

• a very ambitious strategic plan which require a focus of all-hands resources
• an uncertain / ambiguous environment which obliges to swiftly adapt the trajectory to a fast changing environment
• enhance distributed ownership / transversality across teams
• better align teams involved with agile methodologies
• etc.

Having said that, I agree, implementing OKR is challenging. A great learning experience though!

Interested ? I propose two options:

• let’s discuss this right away ??
• read my next post about how to respond to the challenges involved in implementing OKRs