So you’ve heard of OKRs (Objectives and Key Results) and you think they sound pretty good. Now what?!
In July 2017, Product Talks Sydney, hosted a panel discussion dedicated to OKRs, and these are the top five learnings from that event. We’ve also published the panellists’ recommended resources at the bottom of this blog.
The panellists were:
Ian Morgan, Director Strategic Delivery, CHOICE
Michael Le, Product Designer, Pivotal Labs
Start with why… why are you doing OKRs?
There’s no point jumping into OKRs without a clear “why”. Like any change, the people in the organisation will need a clear rationale. The reasons will also shape how OKRs are implemented.
“What’s the problem that you’re trying to fix? Why are OKRs any better than KPIs? Why do you need to do it differently? And if you can’t make that case, if your answer is, “Because everyone else is doing it.” Or because Google does it… you’ve got no chance. You need to be a bit more considered than that,” said Ian Morgan.
“The critical argument of why, for us, OKRs were better than KPIs at every level… getting people to focus on the outcome that you want people to achieve, rather than ticking KPI boxes and outputs and delivering this piece of functionality by Q2, delivering that project by the end of Q3, et cetera. When you’re planning out for a year ahead, the rest of the world’s changed. And your idea of what was relevant a year ago, is no longer relevant.” Morgan added.
A missing why can lead to OKR failure, according to Bernie Ferguson:
“We did a fair of amount of research… and we’ve spoken to some of our customers who have tried to use OKRs. And then they’re sort of going, “Oh, it didn’t work for us. It’s not for us…” And then moved on. But they didn’t… really try to think about their mindset and their approach. Like, they didn’t answer the why. Why are we doing this? And then they revised that sort of discussion, and they’ve come back and they’re trying again.”
Understand the difference between outcomes and outputs
The answer to why do OKRs is often about focusing everyone on business results (outcomes) and shifting away from a focus on outputs (tasks and deliverables).
“If you focus on the outcome that you’re trying to achieve and allow the team to build their own solutions in response to what they’re seeing in front of them in the world at ground level, then you have a much more effective approach,” said Ian Morgan.
Get exec buy-in for OKRs
Executive buy-in is an essential ingredient for OKR success. Most execs are very comfortable with KPIs and how they work. OKRs are a totally different approach, because teams take control of how outcomes are achieved.
“We say that if we don’t get buy in from senior execs, that we’re not going to run this because it’s going to fail,” said Michael Le.
“If you’re familiar with pirate metrics and things like that, we try to get executives to start thinking like that. And like, okay, maybe acquisition is one thing, daily usage and things like that. And trying to get those metrics up. And also thinking about, okay, if that’s what’s pushing my team, how could they game it? And thinking about metrics as lagging metrics as well. So having that conversation at the executive level is a real game changer in getting their mindset prepared to go down this journey of OKRs,” Le added.
Mindset is critical for OKRs
With the execs on side, it’s quickly over to the team to start implementing. Bernie Ferguson recommends teams quickly start doing (they can use the Atlassian OKR playbook as a guide). And the doing must also be complemented with a mindset change.
“I think teams just getting in, having a go, and trying to change the way that they work, and approaching it almost from a mindset approach. It is a bit of a change in mindset because there’s a lot of behaviours … Two things that I’ve said, is there’s a lot of behaviours that if you go from KPIs and you bring them to OKRs, it’s going to smell the same.” Ferguson said.
And that comes back to a shift from signing up to deliverables, completed tasks, or even outputs, to working towards an outcome or result and giving the team latitude to determine how they’re going to get there.
“Changing that mindset. I think that’s the key part here. ‘Cause organisations we work with, banking and insurance, they’re used to KPIs, used to like, you said something, you gotta deliver it. And so it’s changing that mindset and using OKRs as that conversation of okay, this is where we’re at,” said Michael Le.
It’s gonna take time… you need to be patient
A key warning is don’t expect immediate success. It will take time for everyone to adjust to the plays and the mindset. It’s worthwhile making it clear to everyone that OKRs will be a journey and people need to be ready to put the work into improving.
“We’ve had different teams try and fail… You’ll see different pockets of adoption within your teams and with your stakeholders and how you get engagement. So, yeah, I think it’s one of those things. Like if I had to ask or have a discussion with a board member, or an executive team member to say, like I want to do OKRs. I’m really passionate about it. One thing is I was ask for is a degree of patience,” said Bernie Ferguson.
“I remember like trying to write my first sort of set of Objectives and Key Results, and I come out with my task list… And then I try to speak to impact and then at the end of the quarter I go, “There’s no way of actually measuring that.” So it’s not a good key result. Like your key results should be quantifiable. You need to be able to measure it. And they’re like, “Well, that was a bad key result.” But I try to build that capability time and time again,” Ferguson added.
That was 12 to 18 months ago and in that time Bernie and his peers have made huge improvements:
“We’re a lot better. I think there’s a quantum leap that we’ve sort of gone through, but it’s been one of those things if you try and get right first off, you won’t get anywhere. You won’t start. So definitely, start is my advice.”
And if you want to learn more, here are some great resources
The panellists had some great suggestions for further reading on OKRs. Check out the following:
Book: Objectives and Key Results: Driving Focus, Alignment and Engagement with OKRs, by Paul Niven and Ben Lamorte
Video: How Google sets goals: OKRs
Book: Radical Focus, by Christina Wodtke
Website: Lean Performance
Book: Sense and Respond, by Jeff Gothelf and Josh Seiden
And you can read the transcript from the Meetup here.