Busting common myths about OKRs – part one

Wrong! OKRs are not new. Far from it. They’ve been around for almost 50 years and are actually an evolution of Peter Drucker’s MBO (management by objectives) framework. 

Intel founder Andy Grove developed OKRs in the late 1960s, so by the time John Doerr, author of goal-setting handbook Measure What Matters, started working at Intel in 1974, they were already common practice. But just because they’ve been around for a while, it doesn’t mean they’re not effective at driving alignment, innovation, performance, and growth.

Did you know?

John Doerr was so intrigued with the OKR approach, he took it with him to Google when the tech behemoth was just a year-old start-up. Google has been using them ever since.

Definitely not! But it’s easy to see why you’d think that. Google’s personalised OKRs helped them to focus on their objectives and improved collaboration. When other tech companies got wind, they soon followed suit. But while OKRs were once the preserve of giants like Intel and Microsoft, now they’re used by all types of organisations – from small start-ups and charities, like the Gates Foundation, to large enterprises, like Spotify and GoPro.

Whatever your size, OKRs can bring big benefits – even to you as an individual. People think that OKRs have been so successful for Google because it’s so big, but there were only 40 people working for the start-up when it first implemented OKRs. 

Whether there are 10, 100 or 1,000 people involved, the principles remain the same: focus on alignment, reaching high, and delivering results. And as your organisation grows, OKRs help to calibrate operations across the board and prevent operational barriers.

Errr… no. It’s not a question of one or the other. You can use both to get you where you want to be.

KPIs (key performance indicators) are a set of quantifiable measurements of the things that ‘move the needle’ and reflect a company’s success in something they do today through business analytics and reporting tools. So they indicate whether your organisation is meeting its current operational and strategic goals, but they don't measure the big, audacious goals you want to achieve in the future.

OKRs, on the other hand, are about improving and measuring for change. They’re challenging goals you want to achieve, and the measurable and verifiable ways to know if you were successful. They provide direction and context to unite your organisation around an important initiative.

If only it were that simple. Implementing OKRs is not going to be a big success overnight and requires buy-in and communication from the top. That’s why it’s essential that you clearly communicate the reasons why you’re introducing OKRs and maintain transparency throughout.

It may seem like extra work at first for your people. But setting and working towards OKRs does bring clarity and alignment, giving everyone a clear sense of purpose and helping them see where their role (and the roles of others) fits into what the business is building towards. So while they might not love OKRs right off the bat, they will probably fall for them over time!

When it comes to OKRs, don’t get carried away thinking the more you have, the more impactful this approach will be. It’s definitely a case of less is more. And by less, we mean aim for three objectives for each team (or individual), each quarter, and three to five key results per objective. 

OKRs are centred around outcomes, rather than inputs. By limiting the number of priorities, teams are forced to decide what’s most important and focus just on these things. Too many OKRs can be confusing for your employees, negatively impacting productivity and having the opposite impact to what you intended.

If you’re someone who loves lists, we’re sorry but OKRs are not tasks you check off a list. They’re desired goals defined by measurable outcomes. Being prescriptive on how to achieve them also goes against a key benefit of OKRs: the ability to be creative and innovative in your approach, and to adapt and learn to achieve your goals.

Top tip: save your love of lists for something else.

Yes, ambition is a big part of the OKR approach, but that doesn’t mean that all OKRs should be shooting for the stars. There are actually three types you can set: 

• Committed – Objectives you’re committed to achieving 100 percent. This means resources, plans, and schedules fully support completing them.
• Learning – Objectives for when you’re unsure of the outcome (i.e. what you don’t know but would like to know). You’ll ask something like ‘What are we trying to learn in the next 90 days?’ Here, learning something new is the most valuable outcome. 
• Aspirational – Stretch objectives that reflect how you want things to be in the future. For these higher-risk audacious goals, achieving 70 percent is often considered a success. These goals are still concrete and specific, but they’re more flexible and ambitious than the other two types. That means they’ll probably require a bit more experimentation to figure out how to achieve them.

Why have all three types? Well, while it’s important to be ambitious, you need to be realistic too. You want your teams to have the opportunity to innovate and stretch, but you also want them to be achieving what they’ve set out to do. If every goal is too aspirational, your teams may feel overwhelmed and unmotivated.

Don’t worry, you’re not alone. And there are lots more that might be misleading you too. Watch out for part two of this blog series where we’ll take a look at eight more OKR myths.

Done with myths and ready to embrace the reality of OKRs? We’re here to help. If you’d like support with your OKRs and your agile transformation, fill out the form below, and one of our experts will be in touch.