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OKRs: Objectives and Key Results III
First revision: Oct.8, 2024
Last change: Jan.27, 2025
Searched, Gathered, Rearranged, Translated, and Compiled by Apirak Kanchanakongkha.
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WHERE TO DEVELOP OUR OKRs
At first glance, OKRs appear to be very simple: Determine what you want to do, and how you'll know when you've achieved your goal. However, the actual creation and overall implementation of OKRs will require serious delierations on a number of topics. We described one earlier in the chapter when we examined your rationale for using the framework. In this section we'll look at another early implementation question: where you'll create OKRs. This section outlines the primary choices awaiting you.
Company-Level Only
For many organizations, this will be the most logical choice. Starting at the top has a number of inherent benefits: It clearly communicates what the organization is most focused on, demonstrates commitment and accountability on behalf of the executive team, and provides the means for later development of OKRs at lower levels of the firm. This approach "eases" the company into OKRs, giving all employees the time to digest the idea and witness how it can help transform results. There is actually a scientific basis for the notion of easing in, which is called future lock-in. Behavioral scientists Todd Rogers and Max Bazerman coined the term to describe the proclivity of people to be more amenable to a change (assuming it aligns with their values) if it will be implemented at somepoint in the future. Especially if you've had difficulty launching charge efforts in the past, this alternative has merit because it will be less threatening to employees. You're only rolling out at the corporate level initially and employees will have time to adjust to the idea as you show early benefits.
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The critical enabler of success should you choose this option is executive sponsorship. A lackluster rollout, followed by anemic interest on the part of executives, will doom OKRs from the outset. You'll require an enthusiatic champion (or champions) to create the initial momentum for the program and prove to the entire team that it is not just another "flavor of the month," destined to soon disappear.
Company and Business Unit or Team
A more ambitious approach is to launch OKRs at both the company and business unit or team levels. By business unit or team, we refer to any group that reports to a senior executive; your terminology may differ. The implementation would not be simultaneous. Rather, we would expect overall company-level OKRs to be created, and once they have been widely communicated, business units or teams will create their own OKRs that demonstrate their alignment with overall goals.
Most important with this method is ensuring that the company-level objectives have been carefully selected and are well understood, since they will provide the critical input for business unit or team OKRs. And once again, from the broken-record department, sponsorship at the executive level is vital. additionally, this choice entails some significant prework in the form of deployment parameters. Before you allow units or teams to create OKRs, you'll want to ensure that you have outlined key principles such as any maximum number of objectives or key results, agreement on terminology, scoring, and so on. We will be covering those topics in Chapter 3.
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Entire Organization
Ultimately, this is where you want to go, having OKRs at the company, business unit, and individual levels to ensure alignment from top to bottom; it’s just a matter of how long it takes to get there. The risks enumerated in the previous paragraphs apply here but are amplified since you’re attempting to go even lower in the organization. Unless you have a tiny organization, we would not recommend this as your first choice when you begin your OKRs effort. It should not take you years to reach this point. Once you have proven the concept at one level, go deeper, and they have become part of your culture. Only you can determine the right rhythm for your implementation.
Pilot at a Business Unit or Team
To limit downside risk, some organizations will choose to begin their OKRs program at the business unit or department level. They utilize a pilot approach to demonstrate proof of the concept, show quick wins, and generate enthusiasm for a broader rollout. The unit or team you choose will require a leader who deeply understands the inner workings of OKRs and believes in the framework's ability to generate actual business results (yet another way of saying sponsorship, but at a lower level). We have seen this approach pay dividends when the pilot group does indeed generate quick wins, capturing the attention of other groups eager to mimic their success. The danger in this choice is ensuring the pilot team selects OKRs that are achievable. Should they establish unreachable goals and fail miserably on their OKRs, this will undoubtedly scare off others who fear the program will spotlight their deficiencies.
Use OKRs for Projects
This is another “ease your way into OKRs” approach. Rather than developing corporate-level create OKRs is not merely an exercise of re-creating your organization chart. Let’s look at two common cases, based on OKR implementations, which will help you get started defining your OKRs teams.
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Two Teams Using a Single Set of OKRs
We often see a single set of OKRs work for two teams when they are aligned as business partners. For example, IT may be set up by vertical: IT for sales operations, IT for finance, IT for marketing, IT for product, and so on. In these cases, rather than each IT team setting up its own OKRs, or for each business team to set up OKRs, the combined team “IT for sales operations” defines a single OKR set. The business team drives the creation of OKRs, but their corresponding IT team is involved with the process to ensure OKRs are feasible and well understood. This ensures alignment from the start. This pattern cam also emerges with other corporate groups such as finance.
While IT and finance teams are commonly merged with other teams for purposes of creating OKRs, there are other sets of teams that, depending on your industry and structure, may be considered “one” as well. In the software space, product and engineering teams are highly dependent on one other. While each have independent team leads and appear as separate boxes in the organizational chart, if there are major dependencies between these two teams, you might consider merging them to create a single set of OKRs.
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Many Teams for a Single Set of OKRs
Some organizations have initiatives that require extensive contributions from a number of teams. One of our mid-sized technology clients faced this situation, and did not set OKRs by team at all. Rather, they defined a “squad” devoted to each of their five key initiatives. Each squad had it own set of OKRs and included individual contributors from various teams. So, one squad might consist of four engineers, two designers, a marketing analyst, a finance manager, and a product manager.
There are probably other implementation permutations we have not document here, but what we have presented is based on actual client implementations and our research. As noted previously, we feel you should ultimately aim for using OKRs throughout your organization, but of course be patient and flexible in your timing. The most important thing, as with any endeavors in life and business, is overcoming the forces of resistance and simply getting started! A summary of options for where to deploy your OKRs is presented in Exhibit 2.1.
Exhibit 2.1Where to Deploy Your OKRs
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AN OKRs DEVELOPMENT PLAN
Do you know who “The Wizard of Westwood” is? If you guessed Harry Potter’s Next nemesis, you would be mistaken. The Wizard to whom we are referring was a mere muggle, but one possessing legendary skills as a basketball coach: John Wooden.
During his nearly three decades at the helm of the UCLA men’s basketball team, Wooden racked up an unprecedented ten national championships. He elevated basketball strategy to new heights, but beyond his acumen for the game itself lay another secret to his success: planning. He described his philosophy this way:
When I coached basketball at UCLA, I believed that if we were going to succeed, we needed to be industrious. One way I accomplished this was with proper planning. I spent two hours with my staff planning each practice. Each drill was calculated to the minute. Every aspect of the session was choregraphed, including where the practice balls should be placed. I did not want any time lost by people running over to a misplaced ball bin.
This same commitment to detail will serve you well as you begin your work with OKRs. Given the many benefits we have touted, there is often a strong temptation to jump right in with both feet, immediately drafting OKRs without considering any of the questions we have proposed (why OKRs, who will sponsor, etc.) and will share throughout the book. But there is a potential price to be paid for that speed: confusion and mounting skepticism regarding your ability to deliver on the project.
Picture this: You are excited about getting started and immediately call a meeting of your executive team and their direct reports to build the corporate-level OKRs. There are some inevitable hiccups, maybe a lack of complete consensus on what you have constructed, but at the end of the day your walls are papered with sticky notes, and you arrive at a draft set of objectives and key results. We can guarantee that just before you adjourn and utter the words: Does anyone have any questions? Hands will go up. And at least a few people will ask: “what’s next?” If you have barely thought through what was going to happen in the meeting you just had, there is no way you can competently offer up what is going to follow. That will often lead to skepticism and can quickly derail your implementation.
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You do not need a phone-book-sized project plan delineating every conceivable step you will take over the next 18 months, just a document that outlines the big chunks of your implementation so that you can monitor your progress and ensure you are leaving no stone unturned during the process. In the two sections that follow we have outlined the key steps comprising the planning and development phases of your implementation.
Planning Phase
In this phase, you are laying the groundwork for a successful rollout. Here are the key steps to consider:
- Secure executive sponsorship for OKRs.
- Answer the question, “Why OKRs, and why now?”
- Determine where you will begin with OKRs (corporate-level only, pilot, etc.).
- Create an implementation plan (see the development phase section).
Development Phase
This plan supplies the concrete steps you will take in creating your first set of OKRs, and reviewing initial results. Your development plan will, of course, depend on where you decide to build your OKRs.
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We will assume you are going to begin with a set of OKRs at the corporate level only.
- Provide OKRs education: We have previously noted the seductive simplicity of OKRs, and that ease of understanding will often prompt organizations to skip this important step. However, consider this education with a capital E, during which you will not only provide fundamentals on the model but share why you are choosing to use OKRs now, success stories from other firms, and what people can expect during the journey.
- Develop or confirm the mission, vision, and strategy: Your OKRs should be translated from your strategy, drive the achievement of your vision, and be in alignment with your overall mission. These are key enablers of success and as such should be solidly in place before you begin.
- Create your corporate level objective(s) and key results: There are several options for this step: using a small team, gathering input from employees through surveys that will later be used in a workshop, conducting executive interviews, or simply drafting objectives during a workshop. We will explore this to topic, and the attendant choices, in Chapter 3.
- Present OKRs to the company: We suggest using multiple media here: Share electronically, post to your intranet, and most important, communicate in person (perhaps at an all-hands meeting) so that you can facilitate a dialog surrounding the OKRs you chose and why.
- Monitor OKRs: You do not “set and forget” OKRs, but must monitor them during the quarter (or whatever cadence you choose).
- Report results at the end of the quarter: Score your OKRs and communicate the results with the entire organization. As with everything discussed above, we will return to this topic with much more information later in the book.
We began this section with what we hope was inspiration provided by one of the greatest basketball coaches of all time, and will end with another “inspirational” quote, albeit one that is much more colloquial in nature. One of us had a co-worker early in our career that was obsessed with planning. The only picture adorning her office walls was a large framed print bearing the words: “Fail to plan and You Plan to Fail.” By following the steps noted in the previous sections you will be turning that on its head and planning to succeed!
KEY LESSONS FOR SUCCESSFUL TRANSFORMATION
We supplied a definition of OKRs back in Chapter 1, but beyond the taxonomy you must remember that OKRs are really a change and transformation effort. And, unfortunately, it is well documented that organizations struggle with change. In one of many studies on the topic, Michael Beer and Nitin Nohria of Harvard Business School estimate failure rates as high as 70 percent. Therefore, it is critical that you adhere to the latest findings in the field of change research in order to tip the scales in your favor. One recent survey (and study) from the global consulting firm McKinsey uncovered four key managerial actions that prove most effective in driving successful transformation initiatives. Each is briefly discussed below in the context of OKRs.
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The first is role modeling, exemplified by leaders who “walk the walk” and demonstrate desired behaviors to a staff, hungry for cues from their executives. This finding corroborates our earlier discussion of the importance of securing executive sponsorship for your OKRs engagement.
Fostering understanding and conviction is the second key action. It asserts that if employees understand the rationale for a change they are asked to make, they are more likely to act in support of the changes. This action can be fostered by creating what skills are ultimately necessary for execution. Once you assess current (and anticipated) skill strengths and gaps, you can intervene with a set of targeted development opportunities.
There is no magic formula that will guarantee either the effective design or success of a transformation initiative. However, we are confident that if you take the time and effort to rigorously apply the advice offered in this chapter you will be laying a very solid foundation for your OKR program, one that will position you well for the actual construction of objectives and key results, which we will turn on our attention to in Chapter 3.
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