Are You Creating OKRs, or Just Restating Your Mission?
One of the biggest benefits of the OKRs framework is simplicity. Just four words: Objectives and Key Results, that represent two basic concepts: What do you want to do, and how you’ll know you’ve achieved it. This simple taxonomy is a great help when introducing the model to newcomers. However, creating effective OKRs is certainly not a simplistic process, as the remainder of this post will address.
OKRs are at their most effective when they translate strategy into what is most important for teams and individuals to focus on in the next 90 days in order to drive execution. Therefore, they must reflect specific and discrete actions, not repetitions of the strategy, vision, or mission. However, for those new to the model there is a tendency when creating their initial OKRs to simply describe their purpose. A couple of examples will illustrate my point. I recently worked with the HR function of a large global enterprise. The first objective they proposed was “Enable and support the company’s strategy through effective people operations.” The chief problem with this objective is that it’s more akin to a mission, than an objective. Enabling and supporting the company’s strategy through people operations is something this group will always need to do. It’s an enduring goal that describes their raison d’etre and should never change. Therefore, it’s not an effective objective. At another client, an online marketplace, the Communications team came up with this objective: “Increase sellers success through communication.” Once again, this is something they should be focused on over the long term, and represents more of a mission statement than an objective.
I believe defaulting to a statement that more closely resembles a mission than an objective is a natural response when we encounter OKRs for the first time. If you’ve never used the system (or any other goal setting mechanism) it’s difficult to discern the most important thing you need to do in the next quarter. When faced with a universe of possible objectives, the default reaction is to first describe what you do.
So how do we overcome this challenge? In my work with clients I now emphasize that OKRs can’t be created in a vacuum, but require context in order to prove beneficial and drive the outcomes companies expect when investing in the system. Refer to the pyramid below as I describe this required context.
Every organization, and every team within it, should have a Mission Statement. One sentence describing its core purpose; why it exists. Next comes Vision: A concrete picture of what the organization intends to become maybe 5, 10, or 15 years in the future. Whereas the Mission is qualitative, the Vision should be concrete and must contain a numeric target towards which the company (or team) is aimed. Organizations work towards their Vision by creating a specific strategy – choices they’ll make and priorities they’ll adopt to differentiate themselves from their competition. Now it’s time for OKRs. They become the mechanism through which strategy execution is measured and monitored.
If your team or organization is new to OKRs, take the time to create the context I describe above before attempting to develop objectives and key results. There are several benefits to this approach. First, and most obviously, creating this context will lead to better OKRs, as people are able to translate the mission, vision, and strategy into action. Additionally, engaging in the exercise promotes alignment as your teams work together to create a shared view of what future success specifically looks like. Finally, and also very important, this is an opportunity to rise above the routine cacophony of issues, fire fighting, and problems we all face in our day-to-day work, and take a longer and broader view of where you’re headed. That perspective is both refreshing and enlightening.
Recently I worked with a young company (but you don’t have to be a startup for this to apply) to help them work through these steps. At the end of the sessions the passion was palpable and the sense of alignment around their shared view of the future was truly inspiring. For the first time they had a collective sense of the strategy and how they individually contributed to its successful execution. And most important for our discussion here, the OKRs they created reflected this context and will serve as effective guides on their road to strategy execution.