OKRs have become one of the most popular goal-setting frameworks recently, especially in the tech industry. Companies from LinkedIn and Airbnb to Spotify and Booking are inspired by Google's example and adopt OKRs insider their teams. However, a lot of companies fail to implement OKR methodology from the first attempt and need several approaches and iterations to make them work. In this article, we'll explore the most common reasons why companies fail and what you should do differently to increase the chances of successful goal setting with OKRs by your team.
Google has a culture of psychological safety, where team members feel safe to take risks and be vulnerable in front of each other. It's the foundation of the fail-friendly environment, and also the most important factor of a successful company.
In order to successfully set goals with OKRs, your team needs to have an environment of psychological safety as well. Team members would set ambitious Objectives and thus often fail them. With such an approach, unless team members are feeling safe, they wouldn't set ambitious enough Objectives.
Most companies don't have an environment of trust and psychological safety which is needed to effectively run OKRs. So work with your team first on how to create more trust and safety inside your organization, which will be a strong foundation for the future success of your team!
Another important precondition for successful OKR adoption is the culture of feedback. OKRs are public, most of them are set by team members themselves. It requires smooth communication and synchronization between departments/employees. And team members should be willing to give constructive feedback each-other so that together they come up with better OKRs. They need to challenge directly, and care personally at the same time! And your colleagues need to know how to give and accept criticism. A good book on this topic is "Radical Candor" by Kim Scott.
Teams that don't have the top-management (Board Members and all C-level) buy-in don't stay with OKRs for a long time. I once witnessed a meeting during which the Head of Sales was going to present her OKR results, but the CEO interrupted her saying "It's not important, let's move on". She was highly demotivated since it was her most important task for that quarter. Of course, the team dropped the OKR approach after some time, since no one was paying attention to them. The strategic OKRs and overall company direction are set by the top management. And if they don't give it enough focus and priority, the Objectives would be forgotten soon. Top management should lead with an example by setting and achieving OKRs and treating them seriously.
Google OKRs are moonshots — ambitious goals that the team doesn't yet know how to achieve. So that they stretch employees to think creatively and go further than they expected. So the usual recommendation is that the average OKR completion score is 60-70%.
This works for mature teams, like Google.
For teams that only start with OKR approach, it will be most likely demotivating to miss all of their goals, every single time. That's why it is recommended to start with rooftop goals — the goals that the team achieve 85-100%. And once the team gets familiar with such goal setting approach, in half a year or a year, challenge the team to adopt moonshot goals! This transition period would increase the successful adoption of OKRs.
Google uses quarterly OKR planning cycles. However, if you're just starting goal-setting with OKRs, you'll most likely set not good enough Objective, select the wrong metric for the Key Result, or not synchronize with other team members in advance. You'd need time to make mistakes and adapt. And a whole quarter is a too long period for learning. That's why we'd recommend starting with a shorter OKR cycle — 6 or 8 weeks. So that you'll have enough time to get things done and also not too long to conduct a retrospective, learn and improve your OKR process.
OKR is a useful and powerful framework. However, you need to understand the context of the companies that practice them. Google is a big and mature company. When you start with OKRs, make some changes as described above to adopt OKRs successfully and enjoy the benefits of OKR inside your team.
Check out a free OKR tool Plai that will help you manage OKRs in your team.
In this guide, you will find:
- OKR principles
- Formulas & scores
- OKR methodology
- Step-by-step guide
- Free OKR templates
- Common mistakes
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