OKRs
7
min read
OKR or Objectives and Key Results is an effective goal setting framework for organizations to achieve their business aspirations. The major merit to OKRs comes from their ability to help team members achieve shared goals in a time bound and measurable manner. It enables organizations to align business objectives with operational tasks and ensure that the top priorities don’t drift to the back seat as business as usual takes over.
However, setting OKRs comes with its own set of challenges and OKR mistakes that organizations must avoid.
In this blog, we will discuss —
- Steps to OKR goal setting which are likely to yield maximum impact, and
- 15 common OKR mistakes with practices to avoid them.
OKR Goal Setting: Structure of OKRs
OKRs consist of two components, Objectives and key results. Objectives are what the organization seeks to achieve, as a top priority, the overarching vision. While key results focus on how the intended outcome will look like.
Setting OKRs effectively involves creating an objective which is ambitious as well as qualitative in nature. Starting with quarterly objectives can be effective. It will allow organizations time to see subtle signs of progress, but at the same time, flexibility to realign in case of a disconnect.
Key results, on the other hand, must be measurable and quantitative. Without a data point attached to the key results, it is extremely difficult to gauge whether or not the objective has been met.
Working with the right structure can help avoid OKR mistakes. Here is a quick example of the structure for OKR goal setting along with the key considerations to keep in mind:
Objective: Improve employee engagement (ambitious)
Key Result 1: Increase employee satisfaction to 80% (measurable and quantitative)
Key Result 2: Increase employee participation by 50% (measurable and quantitative)
Key Result 3: Decrease voluntary turnover by 50% (measurable and quantitative)
To learn how to set the right OKRs, read this step-by-step guide.
Common OKR Mistakes to Avoid
With an understanding of the benefits of objectives and key results and the structure for effective OKR goal setting, let’s turn to the 15 common OKR mistakes that organizations make and how to fix them based on industry research and best practices:
1. Disproportionate numbers of OKRs
Many organizations fall prey to the common OKR mistake of setting a disproportionate number of OKRs. There are several facets to this. First, there might be too many objectives that the key priorities get lost. Second, organizations tend to link only one key result to each objective, which may not be sufficient to achieve the objectives.
How to fix this: Focus on setting no more than 3-5 objectives per department or team per quarter. Similarly, having 2-4 key results for each objective is a good starting point. This will not overwhelm team members about the amount of work to be done as well as ensure that organizational priorities are sacrosanct.
2. Creating too high or too low objectives
While it is important to have objectives that are ambitious, having unrealistic ones that cannot be achieved is one of the most common OKR mistakes. Unachievable objectives demotivate employees instead of challenging them. On the flip side, having very low hanging fruits as objectives lead to a situation where they are not challenging or stimulating enough to encourage employees to push their boundaries. Either way, the OKRs lose significance and fail to create impact. This also leads to sandbagging and underutilization of available resources.
How to fix this: Adopt an incremental approach. Start with audacious but realistic goals. Check your team’s performance and adjust accordingly.
3. Not assigning accountability
Lack of accountability is one of the major reasons why some OKRs fail. In the absence of direct accountability, there is an environment of finger pointing and shifting the blame, without any adequate results on the table.
How to fix this: Have a point person who will be directly responsible for measuring and sharing the efficacy and the effectiveness of the OKRs and share whether or not the team is on track with what was envisioned. When setting OKRs, always designate who will be accountable and responsible to track the same.
4. Low value objectives
OKRs must contribute directly to the business growth and strategy. Good OKRs directly impact the bottom line — end-user experience and profitability. Low-value OKRs, even when fully achieved, fail to make any substantial difference, leading to wastage of valuable resources.
How to fix this: Set OKRs thoughtfully. Rephrase OKRs to focus on the tangible benefit to create a sense of urgency. De-prioritize goals that do not contribute to the primary objective of the company.
5. Setting vague and open ended OKRs
Having OKRs which are vague and not aligned to any specific measurable outcomes tend to be ineffective. This is especially true for the key results. One of the most common OKR mistakes is not having a measurable figure attached to the key results to gauge whether or not the objective has been achieved.
How to fix this: Adopting the SMART goals framework can go a long way to ensuring that the OKRs are very specific and can be measured in a time bound manner.
For instance, instead of simply saying increase customer NPS, make it specific as increase customer NPS to 9 in 5 months.
6. Focusing on a top-down approach
It is true that most OKRs will come from the senior leadership following a top-down approach to be implemented by others in the team. However, making this an exclusive approach is a big mistake. Top-down OKRs often limit creativity and autonomy leading to decreased motivation and negatively impact the performance overall. It is a common OKR mistake to have brainstorming in silos.
How to fix this: Adopt a balanced approach of top-down and bottom-up when it comes to setting OKRs. Employees need to be seen as organizational assets who have a fair understanding of business needs and priorities. Therefore, giving them a voice in the process of OKR goal setting can go a long way into augmenting engagement and making it a collaborative process. This also aligns business strategy with tactics and day-to-day operations.
7. Inability to track progress
Don’t set OKRs and forget. Without tracking progress, undertaking corrective action and realigning priorities becomes difficult. This leads to negligible impact to the overall business.
How to fix this: Have a weekly tracker to gauge the progress made on each OKR. Have regular conversations on the results achieved. It is a good idea to break the ultimate results into smaller percent size portions which can be aimed to be achieved and tracked on a regular basis.
8. Confusing OKRs with daily tasks
OKRs are not to-do lists. It is important to understand that daily tasks can be many and are generally a way to achieve the objectives and key results. Treating OKRs as a task checklist for everything that needs to be done is one of the most common OKR mistakes.
How to fix this: It is important to differentiate between the top objectives from the tasks and smaller milestones that come along the way of achieving the objective. Listing down initiatives to be taken for each key result can eliminate the confusion.
9. Using OKR for performance evaluation
Many managers commit the mistake of using OKRs as a performance evaluation tool to gauge how well their team members have been able to achieve what is expected out of them. Since performance evaluation is often linked to compensation and benefits, employees will push conversations towards setting lower objectives, which defeats the purpose. As OKRs are by nature ambitious, having a 70-80% achievement ratio of objectives is a good sign of progress. If OKRs are 100% achieved, objectives may not be ambitious enough to capitalize on the team members’ strengths.
How to fix this: Use the OKR framework as a management tool to encourage employees to push their boundaries. OKRs need to be aspirational for employees to put their thinking hats on and innovate, rather than a goal to achieve to reach the next promotion level.
10. Replicating industry practices blindly
Taking inspiration from industry practices is a good idea. However, replicating them without any contextual understanding is self-defeating. As the whole OKR framework gained momentum with Google’s success and explosive growth, organizations tend to replicate the Google way without any customization. Naturally, the results are often skewed.
How to fix this: Learn from the best practices of others and then customize them to fit your organization’s context. Instead of implementing blindly, it is important to understand the rationale for each activity and then align those with specific business priorities. To avoid this OKR mistake, organizations must understand the guiding principles behind successful OKRs, have clear business goals, and then implement OKRs according to their unique needs.
11. Having unrealistic expectations
Many organizations expect to see results within weeks of setting their objectives. They seek instant results without giving the team members the room to work on them and achieve the desired outcomes. This need for instant gratification leads to frustration and pushes leaders to give up too quickly and is a very common OKR mistake.
How to fix this: Be patient and give the OKRs time to show their impact. As with any new process, the team will take some time to implement OKRs, and get used to them. The results will likely be visible from the third or the fourth cycle. Do not quit and dismiss OKRs too early. Engage with OKR experts to understand their gestation period and refine the process along the way.
12. Focusing on short term goals
OKRs need to be forward looking and ambitious. Focusing on very short term goals as objectives will compromise their impact and importance. OKRs are generally long term and are achieved over time.
How to fix this: Segregate your OKRs into three categories to have the perfect balance between strategy and execution.
- Strategic OKRs — long-term, usually annual, business OKRs
- Tactical OKRs — mid-term, usually quarterly, team OKRs
- Operational OKRs — near term, usually weekly, team & individual OKRs
13. Lack of communication about OKRs
Many organizations master the art of setting OKRs in the best and most effective manner, yet in the absence of clear effective communication are unable to achieve the expected results. Unless everyone is on the same page when it comes to the objectives and expected key results, it is very difficult to move the needle in the right direction consistently.
How to fix this: Once the OKRs are set, communicate them clearly to everyone in the team and specify the role of each and everyone involved. Creating OKRs in silos and expecting everyone to perform their roles doesn’t make sense. Setting OKRs must be a collaborative and communicative process.
14. Inability to offer adequate resources
Achieving any objective that has the potential to create business value requires adequate resources. However, often organizations fail to provide their teams with the right resources. This leads to an inability to meet the expectations, causing frustration and demotivation.
How to fix this: Before implementing any OKR, take an honest inventory of the resources — internal and external — that will be required to achieve them. Check whether or not the same can be provided to the employees. If not, it might be a good idea to relook at the OKRs and redefine them in case of a disconnect.
15. Missing the opportunity to reinvent
It is common for organizations to blindly go after the objectives set months ago despite changing business requirements. Failing to reinvent as and when needed can lead to potential loss of revenue and market share.
How to fix this: Organizations must be agile in setting OKRs and be ready to reinvent them as circumstances change. At the same time, when an objective has been achieved, it needs to be replaced with a new one to avoid wastage of resources.
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