What's the deal with OKRs?

We’re seeing five problems with OKR-setting.

1. Makes management feel like a “maker” task. As a result, it takes days or weeks to polish the OKRs as part of a larger planning process or submission. This is especially true for a comprehensive, organization-wide OKR approach where rigid cascades are required from the top, down. OKR-setting is a juicy, semantic task that feels strategic and exciting, so it can distract from the important activation work.
2. Matrix organizations tend to focus on the individual, matrixed employee, rather than on the capability or team. "We’re not assessing how well marketing performed, we’re assessing how well Steve performed as a member of the LOB team." This can be a driver of individual growth, but often will come at the expense of boldness, psychological safety, and permanent capability development.
3. Typical in larger organizations: OKRs are not often written with an integrated or team-based approach, and reinforce a focus on the individual department or division leader vs. the company as a whole. With little to no skin in the game from other teams, it is easy to see how OKRs measure and reward the individual over the team.
4. If your company doesn’t have a shared vision and mission, OKRs will quickly show you how disconnected your teams are. OKRs were designed to be built from a clear mission and value statement well understood by all associates.
5. OKRs can be used as a proxy for performance assessments, which was not the original intent. Mixing OKRs and compensation invites the arrival of Goodhart’s Law.

What to do about it?

• Use a simpler system. Post-its on a wall in the HQ. A Miro board that everyone can access, but only a few people can edit. Something visual. Complex, highly integrated tools invite complexity in goalsetting.
• Use sensemaking tools to build collective wisdom as a leadership team, rather than asking each individual leader to sort out their own goals before getting feedback as a group. We’ve got agendas for these kinds of sessions – ask if you want to get into it further!
• OKRs are not a substitute for good strategy. Ensure teams know the business strategies and can identify how their work helps get the collective organization there. Hold a town hall meeting, make a short video or share the strategy in a brief email.
• Have teams make OKRs, not individuals. Remember – the original idea behind the “O” was to answer the question, “Where do I want to go?” The answer probably isn’t “150 different places, depending on who you ask.”