Five threats that can ruin the effectiveness of OKRs
Objective and Key Results (OKRs) is a widely used action-oriented and concrete goal-setting process for organizations/teams ranging from small to large scale of business. One of the value propositions in deriving OKRs is that it’s not completely top-down and has the potential to keep everyone in the nest aligned. The secret sauce to gain maximum benefits from OKRs is to not alter the core principles of the goal-setting process though variations in adoption are still acceptable.
Glance through the article to know five major threats that can ruin the effectiveness of OKRs in an organization/team
#Threat 1 Having one single Objective with Key Results throughout an organization/team or across timelines
One single Objective with Key Results derived is an imposter to the entire idea of OKRs. OKRs need to be distilled through the different teams or levels of an organization. The objective needs to cascade down across different levels with the output reaped from the bottom to the top.
Example- A Company setting OKRs for the next Quarter
Objective: Increase revenue for the company X
KR1: Increase the Sales conversion by 20%
KR2: Increase the Order conversation ratio placed by 15%
KR3: Reduce the marketing costs incurred by 3%
In the above example, the OKR mentioned needs to be cascaded where the Key Results KR1, KR2, and KR3 will be Objectives for the Sales Team, Product, Customer Support and Marketing teams respectively. Individual teams then need to come up with Key Results for their corresponding objectives.
Ideally, OKRs cycle can be quarterly and should not stretch across a wide range of duration.
#Threat 2 Key results oriented towards the quality of measure
Key Results derived for an objective need to be qualitative and not quantitative. Ambitious OKRs with qualitative Key Results yield maximum results.
Example- A team in a company setting OKRs for the next Quarter
Objective: Increase the user experience of the product
KR1: Three new features to be introduced
KR2: Reduce the number of clicks to two for payment completion
In the above example, both the Key Results mentioned above are measurable. But KR1 is quantity based which does not ladder up to any value addition whereas KR2 is qualitative and significant.
#Threat 3 Having a huge count of Objectives planned for a time frame
“Less is more”
Basic OKR hygiene is to have three to five OKRs per cycle for a definite entity. Too many objectives for a stipulated time frame will hinder focus and pave the way to choose out of many, not fulfilling the need of the hour.
#Threat 4 OKRs derived and dictated by a single entity
OKRs are never to be dictated. Individual teams in an organization need to come up with their OKRs and should be transparent across the organization. Aggressive OKRs lead to fruitful results only if not dictated.
#Threat 5 Skipping the reflections to be done after the closure of the OKR Cycle
Retrospection becomes the key to reflecting on whether objectives have been accomplished and if not then OKRs can be carried forward to the next cycle if still valid then. Retrospectives are a step to think about what were the obstacles blocking in achieving the objectives. Trading off OKR Retrospectives/Wrap-ups can lead the organization/team into a vicious cycle.
“If the ladder is not leaning against the right wall, every step we take just gets us to the wrong place faster.”
― Stephen R. Covey
To Conclude
Goals are the frontline for any organization. Execution to achieve the goals becomes key to the success of any product/organization. OKRs pave the way to prioritize and execute the right things the right way when done right.
Reference- Measure What Matters by John Doerr
Happy reading! Cheers!
