Top 5 Hurdles in Your OKR Implementation & How to Tackle them

OKRs (Objectives & Key Results) are the most effective way to align everyone to the organization’s goal, because:

> They’re transparent to everyone

> They’re forward looking SMART goals

> They’re collaborative

In his book- Measure what Matters, John Doerr, the godfather of OKRS, explains the benefits of using OKRs with an acronym: The F.A.C.T.S. OKRs empower organizations to Focus, Align, Commit, Track, and Stretch. 

Doing it right does feel like having a superpower, yet many organizations falter and many give up too. Here are the 5 top hiccups that chase organizations away from fully implementing OKRs. 

1. Defining OKRs:        

Defining OKRs is confusing, we agree. Objective and Key Results- both are essentially goals, both can be measurable, prompting the question: What sets them apart? Moreover, the stakes are high, as a poorly defined OKR can yield unfavorable outcomes. Writing a right OKR is the biggest step and sadly the first one, often seen as the gateway to success, which discourages many to even start.

Here’s a tip:

Objective answers ‘What are the most important things to achieve in the next 90 days?’ Keep them inspirational.

E.g. Hit revenue of xyz this quarter.

Key results answer ‘How will we achieve these things and How will we know when we get there?’ Hence it’s very important that KRs are measurable & time bound.

E.g.  A. Onboard at least 5 new clients this quarter.

B. Improve sql to closure ratio to 10%.  

C. Get 20% of revenue from upsell/cross sell to existing clients.

D. Retain 100% of clients

Each of the key results is measurable and you know it’s done when it’s done. There’s no fuzziness here. Limit key results to 3-5 for each objective.

2. Getting a Buy in:        

Rolling out something across an organization is no small feat. The existing status quo poses a considerable hurdle. Given the substantial thought required for establishing OKRs, it's inevitable to encounter resistance. There would always be easier alternatives suggested to go down this path. How can you ensure that your organization is adequately prepared for this transition?

Here’s a tip:

Commitment from leadership is a core element of successful OKR implementation. Leaders need to openly commit to their Objectives and remain unwavering in their commitment. Having high-level OKRs within the leadership team enables the organization's decision-makers to establish a solid understanding of OKRs before encouraging other teams to embark on the goal-setting journey.

Next, appoint an OKR Champion. Given the common skepticism and reluctance toward organizational change, piloting serves as an effective method to cultivate advocates and champions for the implementation of OKRs within your organization.

3. Time management:        

OKRs take time to set across the organization since everyone needs to align their goals with the company's objectives. Because it's a decentralized system, where each person defines their own OKR, procrastination tends to kick in. Defining OKRs isn't a walk in the park either. According to John Doerr's book 'Measure What Matters,' expect to fumble in the first 3-4 quarters.

In today's fast-paced business world, spending months to set specific goals might make them outdated by the time you achieve them. Employees might lose interest if things aren't clicking after a couple of quarters.

The fix? Go for a structured rollout. Start with one team testing out OKRs before going all-in. Keep it simple by sticking to 2-3 objectives and 3-5 key results each. And remember, 'Business as Usual' doesn't jive with OKRs.

4. Connecting OKR to compensation        

OKRs are goals and a bit detailed (read complex) at that. As everyone dedicates time and effort to define, track, and measure these goals, the inclination to use them for performance evaluations might seem natural. However, the answer is a firm NO. Even the father of OKR, John Doerr advises against linking performance bonuses to OKRs. Wondering why?

OKRs are intended to be inspiring, challenging, and self-authored. When you attach a monetary value to it, individuals tend to craft goals that primarily benefit them. This can put someone setting ambitious personal goals at a disadvantage compared to someone who thoughtfully sets more manageable objectives during performance evaluations.

Moreover, OKRs are more of priorities that you want to achieve/change. It doesn’t include business as usual (BAU). Performance evaluation needs to have business as usual. 

Here’s a tip:

Establish a streamlined OKR system for goal alignment and a separate appraisal process for evaluating employee performance, which goes beyond the scope of OKRs. It's essential to recognize that KPIs measure ongoing performance, while OKRs are forward-looking goals. Although you can align KPIs with OKRs by using them to define key results, but not all KPIs can serve as key results.

5. Resource Intensive        

OKRs are a great way to bridge the gap between strategy & execution. Leaders have the strongest grasp on strategy, but do not follow all the finer details of the day-to-day execution. Hence they empower teams to take OKR ownership by facilitating 2-way communication. Unlinke KPIs, OKRs are collaborative and two-way goals.

All these good things about OKR also means that implementation is also complex. If you decide to have OKRs at different levels such as Org level, department level and employee level, it becomes a complex set of results to track. For a very small team or as an experiment, you can track OKRs with the help of Google sheets or Excel, but if you want to seriously track results, it's advised that you invest in a good OKR software as per your need. All these things add up to the cost of OKR.

Our tip:

Weigh in your pros and cons. Are you ready to adapt OKR in your work setting? What are you trying to achieve with OKR implementation? Are you ready to set aside resources in terms of software cost, OKR champion and training cost & most importantly time to define, review and track OKRs? If yes, start with a small team and gradually roll out.

If you have your answers, get in touch with us and we will help you get started on your OKR journey.

This newsletter first appeared on our website under Insights.