Recently, we conducted an interview with the renowned author and OKR coach, Christina Wodtke. Christina is the author of “Radical Focus: Achieving Your Most Important Goals with Objectives and Key Results” and has helped many companies implement the Objectives and Key Results (OKR) goal setting methodology.
We spoke about OKRs, how to implement them with your team, and what are some common mistakes to avoid when using them.
She told us that OKRs are about creating extraordinary change and for growing your company. But while there is a lot of excitement, they are not a miracle cure that will automatically solve all your problems.
OKR: A system for goal setting.
Here is the full interview:
In your own words, what are OKRs and why should companies use them?
OKR is simply a system for goal setting. A lot of people have already heard about SMART goals or KPIs, but OKRs are a little more than that.
While SMART says that goals just need 5 general characteristics, OKRs say that the goal needs to be set every quarter, you need to check your goals every single week, and that you must make sure you are moving towards them. Beyond that OKRs need to be set as results, not tasks, and your goals need to be graded at the end of the period in order to maximize learning.
With KPIs or SMART goals it’s just about setting goals, but with the OKRs it’s about living your goals.
What are the benefits employees get out of OKRs?
If OKRs are used correctly, the big advantage is that you don’t have the infamous “priority of the week”, which drives people crazy.
In life there are always fires you need to put out. Or some cool new things that draws your attention: “OMG, Google did this” and “Amazon did that”. OKRs say that, “yes, these thing are happening but we have committed to these goals and these results. We’re going to make sure they happen”.
So, for an employee, who is bombarded by requests from marketing or sales, they have some clarity of what the company really wants to accomplish. That clarity can make all the difference.
Let’s talk about OKR implementation. After you learn about OKR, what should your first steps be when implementing the system?
I can’t even tell you how many times a company has failed and said “OKRs are bullshit!”. I even know a former Google team leader whose team did a horrible job with OKRs. And he hates the system, because it can go wrong.
When implementing OKRs, a lot of people get really excited and they want to go the whole hog. They say they’ll do it all and implement it in all teams with every individual.
If you are really committed to getting value from the methodology, the best thing you can do is to start with a pilot program. Implement it in a small team, who controls their own destiny and are mostly autonomous.
Once the pilot has succeeded of failed, you find out what problems your company may face. For instance, a lot of companies are not good at measuring results.
What are some of the things you can learn through a pilot program?
With a pilot, you’ll find that out and discover that you have to instrument a lot of stuff you haven’t measured before. You may learn that you have the wrong execution plan in your company and need to fix it. Or, you may figure out that 3 months is not the right OKR period for you and you should use OKRs in a six-month cycle.
You need to find out how are OKRs will work for your company before you try to stuff it down everyone’s throat. Once that is figured out in the pilot, you can expand the system to include more teams and eventually roll it out to the entire company.
I’d also put off individual OKRs for as long as possible because that is really hard to get right. Make sure your company is really good at OKRs before trying them.
Have you used OKRs successfully in some non-traditional ways? Such as setting a custom time period?
You need to be careful with that, as part of the reasons you use OKRs is to tackle your biggest problems, which can take some time. So, if you start setting OKRs every week, all you are doing is planning and constantly changing the focus. But, I think if you are an early stage start-up, your only OKR can be “find a product-market fit” and you can stick to this goal until you find it. Some people set OKRs for 6-month periods as they are on a really slow cycle.
The common mistakes.
What are some common mistakes people make when setting OKRs?
Sometimes, especially when a company decides to connect compensation to the OKR completion, people set OKRs they know they can easily accomplish. But, the big advantage of the OKRs is that they should always be stressful and you should not be able to know if you can fully achieve them.
You need to reward people based on accomplishments that happen as they work towards a goal, not based on the achievement of the goals themselves.
Then there is the opposite with over excited people who say, “we can do everything in three months” and they set crazy goals. I have spoken with a lot of clients who set these crazy Objectives. And I have to tell them “that sounds like an annual goal, not a 3-month OKR”.
The point is, before you start measuring what is possible, you need to have a sense of what you can do in 3 months.
Are there any other common mistakes you have seen?
On of the biggest ones is when people set their Key Result as a task. Unfortunately, you even see this in the John Doerr’s book (“Measure What Matters”). If you say your KR is to launch a new customer relationship management tool, the counter is, “so what”? What will that get you? Do you think that will make you more efficient? Do you think it will help you close more sales?” And these are the actual things that matter. So your goal should not be to launch a product but to close more sales.
A lot of the work I do with my clients is coaching them by asking this “So, what?”.
What do you think about that idea that OKRs fit with every company?
I had a meeting with this youtuber. He was able to figure out how to use OKRs to meet his work goals for video production. So I will say that if you have a goal and you want to accomplish change, you can use OKRs.
That said, there are teams, not companies, who may need to stay at a more steady pace. For example, they are doing really well now and there is no reason to create change. As OKRs are really about the extraordinary change, they may not be at a good point to implement them.
When you’re talking about incremental change or becoming a little more efficient, you don’t need OKRs. My auto-mechanic down the street has more customers than he can handle. I don’t think he needs the growth with OKRs. He is just looking for his weekend off.
Thank you for that.