This post shares ideas that shed light on key missteps that could occur during the implementation of Objective and Key Results (OKRs) within an organization. It looks at the indispensable role of effective OKR execution and change management strategies in propelling organizational alignment and performance. Are you navigating the OKR terrain cautiously to avoid common pitfalls?
Objective and Key Results (OKRs) is a framework for defining and tracking objectives alongside their outcomes.
It consists of an Objective, a qualitative and inspiring description of what is to be achieved, which is complemented by Key Results that represent quantifiable outcomes used to measure the progress towards the objective itself.
OKRs are very different from standard goal-setting management practices because they are thought for engaging the whole organization by setting and aligning vertically (both top-down and bottom-up) and horizontally, then communicating, and regularly monitoring and updating when necessary (Check-ins).
Through that powerful framework, organizations can foster focus, alignment, and engagement across various levels, driving performance and facilitating strategic execution: teams align their efforts towards common goals, making organizational objectives transparent and measurable.
We already touched upon this topic in this blog because we consider that practice indispensable for any company that wants to continually engage and adapt to the market.
The blog post “Adaptive Strategy: combining OKRs with Lean Portfolio Management” emphasizes the synergy between Objective and Key Results (OKRs) and Lean Portfolio Management (LPM) in navigating business uncertainties.
While in “Driving Corporate Sustainability through OKRs” we wrote how these two techniques can be a game changer in driving corporate sustainability for companies who want to transition towards a Circular Economy model, which is seen as a solution to natural resource depletion and climate change,
We know, however, that despite the efforts and best intentions in implementing such a framework in companies, there are some risks that need to be identified and closely monitored to avoid pitfalls that can sabotage success.
1. Not Securing Leadership Buy-In
Without executives and managers fully understanding the OKR practice and committed to adopting OKRs as one of the most important managing practice, any rollout is doomed from the start.
Leaders must model the OKR discipline to let it spread through the organization.
Take time to work with them, get their input on the program, demonstrate how it will benefit them before moving forward.
2. Developing OKRs in Silos
When implementing OKR within the whole organization, you should start from the top level (corporate OKRs) and then engage the rest other organization’s areas to have them creating their own.
It happens sometimes that business units independently set their OKRs without involving other areas for finding any synergies or not sharing them transparently across the organization.
This leads to misalignment and competing priorities.
3. Setting Too Many OKRs
In the context we are living, that is continuously changing and fluid, companies cannot resist the urge to capture every objective with OKRs. This has the dangerous drawback to dilute company’s energy in too many trickles, losing focus and the right pragmatism.
Limit teams and individuals to 3-5 OKRs each to maintain focus on the most important goals. Too many OKRs become just a checklist that bury priorities.
4. Failing to Coach on OKRs
Understanding and adopting OKRs requires a big mindset shift for all the people impacted. Introducing them requires training, several workshops and, once introduced, they cannot be “left alone”.
Managers must regularly coach their teams on developing ambitious and meaningful OKRs tied to the company’s objectives. Without perseverance and consistent guidance, overall implementation quality suffers and, in worst cases, they can be abandoned.
5. Infrequent Check-ins
Check-ins are events where each team meet and retrospect on how OKRs are progressing; during these moments they can decide to modify or even abandon some Key Results in favor of others, due to any market changes, company’s changing priorities.
OKRs are meant to be dynamic, not set and forget for a year. They need to evolve as priorities and conditions change. OKRs have to be reviewed monthly or at least quarterly and adjust them as needed to keep people energized and focused.
6. Using OKRs as Rigid Planning
The framework was born as a stimuli for companies to be innovative and bold in looking for new opportunities. This means that organizations need to be open to failure as possibilities to learn and, thus, adapt quickly.
OKRs are not meant to be rigid planning system. Leave room for creativity and use OKRs to align efforts, not dictate every detail.
7. Losing Momentum
As any (positive) change introduced in organizations, the excitement is very high at the initial stages but risks to eventually fades if not managed accordingly.
Plan ahead to sustain OKR momentum by communicating and updating them regularly, making them public, and showcasing them. Share success stories, refresh training, and celebrate wins to continually reengage everyone.
8. Linking OKRs to Incentives
What happens when your boss asks you to ideate innovative solutions and then directly connect your bonus to them? Well, it’s quite probable that, to secure that money, you will be not that innovative. Being creative involves accepting uncertainties and risks, being open to failures.
While one could think that incentives can help drive OKR focus, tying them too directly to compensation undermines the intention of ambitious goal-setting. Keep incentives aligned but not wholly dependent on OKR achievement.
Implementing OKRs organizationally-wide requires a huge effort accompanied by specific change management initiatives (e.g., training, coaching, communication, stakeholder management, etc.). Reflecting on the aforementioned common OKR mistakes, we can prevent ourselves from stumbling and reduce the full value of this powerful framework.
With foresight and introspection, we can avoid pitfalls on the path to successful, mindful OKR execution.
