Managing Effectively With OKRs

A five-part series: 1. Introducing OKRs, 2. Preparing for the OKR Journey, 3. Crafting Great OKRs, 4. Driving OKR Alignment, and 5. Managing Effectively with OKRs

Summarized by Bill Gelbaugh from: Objectives and Key Results by Paul R. Niven and Ben Lamorte, with additional material from Measure What Matters, Lattice OKR 101 and Perdoo.

Creating OKRs and not rapidly sharing and reviewing results is akin to hoping to win the lottery without going to the trouble of buying a ticket. You can’t “set and forget” goals and hope to achieve any of the OKR benefits we’ve been chronicling. The modern business offers countless distractions to divert your attention from what matters most—a hundred fires you can fight every day—but to execute successfully and take your performance to the next level, regular and disciplined reviews of OKR results must become part of your operating rhythm and cadence of your corporate culture.

WEEKLY MEETINGS

Our point of departure is Weekly Meetings. The purpose of the Weekly sessions is threefold: Assessing progress, identifying any potential issues before they blossom into significant problems, and, especially as you begin using OKRs, to ensure your team stays focused on what matters. Here are some topics you may wish to include:

Logistics: Start by simply determining who will be included in the meeting, what time will work best for everyone’s schedule, and where the meeting will be held.

Priorities: What are the key priorities, the things that must get done this week to inch closer to achieving your OKRs? As we alluded to above, it’s easy to get trapped in the whirlwind of pressing and urgent issues swirling about in any business, so ensure the priorities discussed are in fact leading to the achievement of your OKRs.

Status: During the Weekly Meeting, you can gauge the team’s current level of confidence. Has it ratcheted up? Gone down? Either way, the most important question is why. If you’re progressing as planned, you’ll want to put mechanisms in to stay there, but if the team feels momentum is sagging, perhaps it’s time to discuss how you can strategically shift resources to put things back on track.

Engagement: As we’ve noted several times, OKRs should challenge and stimulate people to engage in the breakthrough thinking necessary to reach unprecedented heights. Use the weekly session to gauge the team’s mood. Are they still actively engaged in the pursuit of objectives, or are they merely paying lip service with no real intention to invest the discretionary effort to target demands?

The Big Picture: Earlier we defined a health metric as something the company will frequently monitor because it is representative of successful execution of their strategy. Things should be getting better overall, well-designed OKRs should ultimately propel the success of your overall health metrics.

UPPER RIGHT | Each quarter set a bold, qualitative Objective and three quantitative Results.

The Objective is the inspiration for the quarter, and the Results are what happens if we do the right things. Weekly we look at them, and we ask, are we closer or farther from making these Results? We will start the quarter with each Key Result at fifty percent confidence, a 50/50 (0.5) shot at making it. So, each week, we have a conversation, and say, have we gone up or down? If we are dropping to 20% (0.2) from 80% (0.8), we want to know why. What changed? How are we going to address and improve this KR?

LOWER RIGHT | This is our “health metrics,” we can’t just stop paying attention to everything!

Here, in the lower right, we put “health metrics.” These are things we want to protect while we shoot for the moon up in the upper right. Let’s say we pick an Objective that’s about radical revenue growth. We’re trying to get as many new clients partnering with us as we can, right? Well, we don’t want to forget our current clients in the rush to get new ones. Rate current Customer Satisfaction: green, yellow or red.

UPPER LEFT | Here we write the initiatives we will do this week to advance the OKRs.

Here in the upper left, we write the three to five big initiatives we will do this week to affect the OKRs. We share them, so we can question if we are spending time on the things that will get us our Results. We don’t list everything we’re going do. We list the things that must happen, or we’re not going to make our Objectives. Life always gives you plenty to do. The secret is focusing on the things that matter!

LOWER LEFT | This is the “heads up” quadrant of important things for the next month.

Here in the lower left, is our “heads up.” It’s the pipeline of important things we expect to happen in the next month. That way Marketing, Sales, Operations, Admin don’t get caught flat-footed when something must be supported.

QUARTERLY REVIEWS

The time for sticking a finger in the wind or relying on subjective confidence levels to assess where you are has come to an end, and the moment has arrived to actually grade your performance at the end of the quarter. The two primary components of the review meeting are “what and how.”

The first component, the “what,” comprises the grades (scores) you assign for each of your key results. Based on performance during the quarter, each team (or individual should you connect that far into the organization) will determine their final score, and provide the rationale for that determination to their peers, colleagues, and superiors. This wide sharing of results is yet another benefit of OKRs, as it provides all teams the chance to learn more about their colleagues’ objectives, key results, triumphs, and challenges, what works, and what is ultimately possible when the entire organization is working in alignment. Assuming you’ve been rigorous in holding Weekly Meetings and also conducted a mid-quarter check-in, providing a final grade to OKRs should be a relatively simple, straightforward, process.

While the grades you assign are obviously important, what really stokes the flames of learning are the conversations spawned from a deep investigation of what occurred during the quarter.

The second component of the quarterly review meeting, the “how,” is what will ultimately drive the success of your OKRs program, and your organization’s ability to execute. While the grades you assign are obviously important, what really stokes the flames of learning are the conversations spawned from a deep investigation of what occurred during the quarter. The scores should serve as a launching point for intense discussions that challenge conventional views, unearth assumptions, and test a working hypothesis. In our experience, many organizations struggle with these meetings where candor and honesty should be the order of the day. Although some companies are able to engage in passionate discussions, leaving nothing on the table, the well-worn rules of civility hamper others from reaching a level where actual revelations are found.

Recent research into effective teams backs up this assertion by noting that the psychological safety of participants is a vital enabler of group success. What we are saying is that in order to make the best use of you OKR data (scores), you need to carefully think about how you’ll structure your meeting to ensure learning is maximized as your goal.

Updating OKRs at the End of a Quarter

The actual mechanics of OKRs creation are quite straightforward. At the beginning of each year, the company creates its highest-level set of OKRs. The exercise may include both strategic annual OKRs and more tactical quarterly OKRs. These high-level “corporate” OKRs provide the context for the connecting process we discussed in detail earlier, in which business unites, teams, and perhaps even individuals create their own OKRs which demonstrate their contribution to the overall strategy execution.

At the end of each quarter, OKRs are graded, and new OKRs are then developed throughout the organization. Some OKRs may remain the same for several quarters, especially those identified as particularly critical in light of current strategic or operational challenges. You may also carry forward any OKRs that you did not successfully achieve during the previous quarter, those whose success is of ongoing strategic importance. Any OKRs you did achieve will most likely be eliminated, updated with a new crop that once again stretches the team to deliver its very best.

SCORING THE RESULTS

1.0 Score is achieved!

An extremely ambitious outcome that may appear nearly impossible to achieve. This is where you begin; all key results should be written with a 1.0 goal in mind to foster breakthrough thinking. It may appear to be a shot for the moon if the company has never come close to attaining that level of performance in the past. As this is a stretch goal, if you achieve a 1.0 you may want to consider setting a higher bar next time.

0.6 – 0.7 Score is a success

This level represents progress that is difficult, but ultimately attainable, and what we hope at a minimum to achieve. It’s a lofty number well on the way to our stretch, but achievable based on past results.

0.3 Score is mediocre

We can phrase this the “business as usual” target level. It represents performance we can achieve with standard effort and little or no assistance from other teams. This is considered mediocre, what OKRs are designed to eliminate. If at the end of a quarter a team is only able to reach a 0.3 on a key result you will certainly want to ascertain why!

In our experience, those new to OKRs will tend to encounter one of two outcomes in their initial foray with the framework; either they will in fact have all ones, or at the opposite end of the spectrum, they’re left scratching their heads because, despite their Herculean efforts, their reports are littered with zeros. Eventually, after a few quarters (more or less; every organization is different) your key result grades should begin averaging close to 0.6 to 0.7. Anything higher perhaps your targets are not aggressive enough, meaning you’re unable to take full advantage of the talent and potential your teams have to offer.

In Conclusion

With this discussion on managing effectively with OKRs, our five-part series on Objectives and Key Results comes to a conclusion. Watch your email for the upcoming release of the entire series in a White Paper format. For any questions you may have, contact Bill Gelbaugh at bill.gelbaugh@outhouse.net.