Implementing OKRs in Large Companies: The 6 Conditions for Success

While the effectiveness of the OKR (Objectives & Key Results) method as an accelerator for the development of startups and scale-ups is well-established, fewer are aware of how well it also adapts to large companies to facilitate the transition from strategic vision to successful execution.

The OKR method, which originated at Intel in the 1970s, was adopted by Google and later popularized by the renowned book "Measure What Matters" by John Doerr, has seen a significant resurgence of interest in recent years. This surge is quite logical considering the current context, which makes the implementation of strategic plans increasingly complex.

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A context requiring strategic realignment

Lockdowns, supply shortages, inflation, reduced consumption, geopolitical tensions, cybercrime, the return of antagonistic blocs... the list of threats looming over businesses has arguably never been longer. This era of multiple crises unfortunately seems here to stay. In such a context, it becomes exceedingly challenging for executives, managers, and employees to maintain strategic direction while investing considerable time and energy into crisis management.

Furthermore, organizational structures within large corporations have often been finely tuned, leaving little room for handling unforeseen circumstances without sacrificing time from innovation or transformation projects. Managers themselves are often bogged down by operational tasks and, in many cases, struggle to free up the necessary time to gain perspective and develop their strategic vision.

Lastly, the accelerating evolution of customer expectations, which demand seamless omnichannel experiences and environmentally conscious alternatives in response to the climate emergency, compel most companies to reinvent themselves... fast!

Multiple crises, lack of time for reflection, and complex transformations are the three ingredients guiding executives to clearly define a direction and develop a strategy to achieve it. However, it is rarely the strategic vision itself that is lacking in large companies. Nonetheless, is it consistently ingrained in the minds of all top managers? Clearly not! Is it always effectively communicated and contextualized at the operational level? Even less so! Thus, middle managers and frontline employees have never been more in search of strategic vision or at least clear directions. It's about understanding where we need to go, why we need to go there, and feeling empowered about how we collectively contribute as a team and individually to the company's project.

It is this alignment, this congruence between strategic vision and individual contribution that is so difficult to achieve in the current context, yet so necessary, as every loss of energy proves particularly harmful to both the company and its employees.

Precisely, OKRs bring this alignment and congruence - among other superpowers – and that’s why the method has never been as relevant as it is now, regardless of the size of the company or its industry.

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OKRs: The method with 5 superpowers

Choosing to implement a new strategic management method in a large company cannot be done without clearly identifying the expected benefits. These benefits must be quickly and massively observable, as the effort to change habits throughout a large organization can be tedious. In the initial phase, it is the leaders' willingness to implement OKRs that will make all the difference.

So, why OKRs? It is quite common to associate superpowers with this method. At TalenCo, we identify five of them:

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1/ Aligning & refocusing teams on the right action priorities

Through their structure, Objectives (ideally a maximum of 3) and Key Results (again, a maximum of 3 per objective) require choices to be made regarding strategic priorities. They encourage leaders to accept the idea that it is not possible to pursue everything simultaneously. OKRs make this prioritization visible and clear for everyone. It is often noticed, when OKRs are presented to a group for the first time, that questions arise such as: "Why aren't you addressing such and such topic in the OKRs?" This enables leaders and managers to make choices and explain them. It is precisely this that creates alignment and enables a common vision to be shared.

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2/ Involving the entire hierarchical chain

With OKRs, each department and then each team will be able to reinterpret the objectives and key results from the higher level to make them tangible in relation to its own missions and operational achievements. It is precisely this reinterpretation - rather than mechanical cascading - that enables each employee to understand how their daily tasks and the projects they work on contribute to the success of their team and how they impact in turn to the company's global roadmap. In other words, everyone can understand what piece of the puzzle they bring to the implementation of the overall strategy. Whether this piece is large or small, they will be better able to understand their contribution and identify the interdependencies that lead to success.

Ultimately, every employee should feel free and confident to question their manager about the relevance of their actions if they feel they are working on a task or project that they cannot link to a Key Result (of their team, their department, or another department). This will help avoid any waste of time and energy on deemed non-priority subjects and strengthen the coherence of activities throughout the company.

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3/ Generating collective commitment

When well-formulated, OKRs have the ability to give a little extra purpose to a company or team's mission. They should inspire a greater sense of determination, urging individuals to push beyond their limits to make a significant impact.

If there's a moment to set aside humility and embrace ambition, it's when crafting OKRs, particularly objectives, with one's team.

For example, when Google created Gmail in 2004 - and when this new service had no active users yet - the teams set themselves an objective, which we would describe as ambitious and slightly uncomfortable: "To be the most used email service in the world."

You can also experiment with formulating objectives to create an impact or grab the teams' attention. For instance, a BtoC service provider in the mobility industry opted for an objective titled "We killed the game ? instead of a conventional and cautious formulation like "Our market share shields us from competitors." This was coupled with a second objective, ”All customers love us”, instead of a more academic "We foster customer preference."

In another context, it is possible to talk about profit and profitability in objectives without demotivating teams. However, it will be preferable, for example, to choose "We radically increase our profitability to finance our transformation towards a more sustainable model," which will engage teams more than "We double our EBITDA."

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4/ Empowering every employee

When well-written, Key Results describe the outcomes we wish to observe and answer two questions:

• What will indicate progress towards the objectives?
• On what topics do we want to focus the teams' attention?

These Key Results are measurable outcomes, not tasks. Thus, leaders and managers emphasize the 'why' (the result to be achieved) by empowering teams on the 'how': the action plan. For example, a Marketing department could set a Key Result like "Identify 5000 commercial leads per month" rather than "Redesign our website." The former being a true measurable outcome, the latter describing a project aiming to achieve this Key Result.

Highlighting Key Results while enabling teams to suggest action plans ensures alignment between the leadership's vision and the strategies suggested by the teams.

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5/ Developing a results-oriented company culture vs. a means-oriented Culture

By establishing Key Results as genuinely measurable outcomes and fostering team buy-in, the method reinforces a culture focused on results. Employees no longer just carry out tasks they have been assigned, but they suggest action plans that they can adjust until the result is achieved. Interdepartmental collaboration is also often enhanced along the way.

To harness all these superpowers and to ensure that OKRs bring their full potential in large corporations, it is necessary to meet the following 6 conditions:

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1/ Adapt the timing of OKRs

While startups or scale-ups typically set objectives with a maximum time frame of 1 year and aim to achieve Key Results within 3 months, I advise large companies to extend the time horizon when defining strategic OKRs. Setting objectives that describe what the company should be at the end of a 3 or 4-year strategic plan is a valuable practice that encourages everyone in the organization to take a step back and consider a longer-term perspective than just the month or quarter-end figures. Key Results, on the other hand, should not have a deadline exceeding 12 months. This lifespan can even be tightened to a semester or a quarter as long as it remains possible to maintain a measurable result and not shift to project milestones.

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2/ Do not cascade OKRs too quickly

"Measure What Matters" by John Doerr and many other publications on OKRs suggest that the best practice is to cascade OKRs throughout the organization down to the individual level. This implies that every employee, at every hierarchical level, commits to their own OKRs. While this might work at Google, I strongly advise against trying to replicate this model in a large company.

A good practice is to start with company-level OKRs, collaboratively defined by the entire Executive Committee, and then ask each member to cascade the OKRs for their own sphere of responsibility. After this first step, each department can already ensure alignment between its Key Results and the main activities and project roadmaps.

At this point, it is important to evaluate the extent to which it is appropriate to implement OKRs throughout the organization and the ideal pace for adopting the methodology. Allowing a minimum of 6 months of OKR practice at a given hierarchical level before cascading to the next level seems very reasonable. In any case, I do not believe it is useful to reach an individual level. OKRs should remain team commitments for which each employee can be invited to formalize their contribution in the form of action plans and priorities.

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3/ Check that everyone understands the alignment between key results and daily actions

How many companies have we seen where daily tasks and projects seem completely disconnected from the strategic priorities highlighted by the executives? While in a SME this gap may be less pronounced because misalignment would become apparent more quickly, in large corporations it is common to have employees working very hard on tasks and actions that may seem logical within a given scope but do not contribute at all to strategic priorities.

The proper synchronization between Key Results, project roadmaps, and each individual's contribution is therefore the key element to enable the transition from strategic vision to execution. Yet, this step is often skipped by managers. They often think that simply presenting the OKRs will automatically prompt teams to adjust their action plans. In practice, only teams that commit to holding authentic synchronization meetings between projects and Key Results can fully leverage the benefits of OKRs. This involves aligning collective roadmaps at the team level, as well as the individual contributions of each employee.

To achieve this, it is advisable to adapt individual performance management processes accordingly. Moving from an annual performance review to quarterly discussions is an effective strategy to ensure every employee clearly understands their contribution to the projects associated with the Key Results. In essence, allowing them to perfectly comprehend the meaning of what they are doing while ensuring that there will be no loss of energy or demotivation on projects that are not aligned with the company's strategy.

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4/ Adapt the leadership culture

If the OKR method is so powerful, it's because it has a direct impact on leadership culture.

Defining OKRs and reinforcing them regularly helps middle managers and employees to frequently look beyond daily tasks and operational implementation towards the strategic horizon: "where do we collectively want to go?". For managers, OKRs help focus more on the 'why' rather than exclusively on the operational implementation of the 'how', 'who', 'when', and 'how much'.

When used correctly, OKRs allow for regular, healthy, structured, and illustrated discussions to ensure that everything is progressing well and at the right pace. If managers adopt the right attitude, they can help teams look forward rather than waste time and energy justifying why projects haven't progressed fast enough so far.

Moreover, the synchronization (mentioned earlier) that regularly occurs between projects and Key Results greatly increases teams’ autonomy. This frees up time for managers to adopt a servant leadership approach by providing solutions or supporting different teams facing obstacles along the way.

Embarking on an OKR journey in large companies also requires linking it with the development and training paths of managers to ensure that they adopt the right behavior.

OKRs serves their posture to better provide strategic vision, refocus on the right priorities, and empower teams in the execution of action plans. They will also adjust the frequency of individual interviews and alignment discussions with each employee.

Implementing these practices not only fosters valuable moments of communication but also guarantees a comprehensive grasp of the objectives and vision, enhancing trust between managers and their teams.

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5/ Lead by example

To successfully deploy the method, as mentioned earlier, it is preferable to start with company-level OKRs defined by the Executive Committee. Each C-suite member can then reinterpret them for their area of responsibility. The way senior management incorporates OKRs into collective rituals to impart purpose and consistently track the progress of the strategic plan will be imitated by lower management levels. Therefore, it is necessary for executives to lead by example when using OKRs.

This involves respecting the fundamentals: sticking to a maximum of 3 or 4 objectives, resisting the temptation to use project milestones instead of Key Results, conducting regular OKR review meetings, adopting the right leadership posture, etc. This exemplary behavior is absolutely crucial for the method to properly permeate the entire organization.

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6/ Centralized governance and organizational liaisons

At first glance, the OKR method is easily understandable and seems simple, but it remains demanding in its implementation. Its deployment requires appointing a project team composed of managers close to the executive team.

Often stemming from HR, this lean team that drives the deployment can also be hierarchically attached to the Transformation or Performance departments. Their mission is to assist executives in adapting the method to the company's culture without distorting it, determining the pace and methodology of deployment, activating the communication plan, and recruiting liaisons or OKR Champions in each department to facilitate deployment. These Champions, are essential to ensure overall coherence while being able to take into account the specificities of their respective department.

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Steering with OKRs in a large company clearly multiplies the chances of effectively deploying its strategy. Alignment, empowerment, and refocusing energies on what really matters, among other superpowers, have already convinced many large companies in the service, media, automotive, banking, industry, beauty, and retail sectors to adopt OKRs. If you are intrigued by the method at first glance, don't hesitate to seek advice on adapting it to your context. However, never forget that it is not the organization that must adapt to the method but rather the method that must integrate your organization.