In our quest to help teams manage their OKRs better, we interviewed a lot of organisations who rolled them out, had failed to, or had tried and made many mistakes – with the hope we could learn about those struggles, and address that pain as best we could in OHNO.
I found a couple of really interesting observations, which I thought i’d share. When it comes to OKRs failing, 3 reasons come up the most.
The priorities aren’t clear
Hands down the biggest reason I see an OKR implementation fail, has nothing to do with OKRs. It comes down to the fact that general business priorities are simply not clear, and here, the CEO has simply let the team down.
The way this disaster starts is as follows. Some leadership role will want to roll out OKR’s and the broader leadership team, including the CEO think it’s a good idea. But then the CEO simply can’t articulate the main priority of the organisation for the next quarter, or the next year. Or perhaps, they can but only for a very specific, tactical target.
In some cases, the CEO, especially of public companies with a narrow focus, will really want to achieve a sales growth target, so their view of the world is very revenue driven, instead of purpose driven. When your focus is one dimensional like this, anyone who is not in the focus area, feels ignored.
If you were to set an objective for Acme Corp as ‘Make 20% revenue increase this quarter’, this is incredibly clear for the sales and marketing team, but what about technical support? What about the Product teams? It’s not to say those teams couldn’t come up with supporting objectives, but the company objectives really need to be about the company moving forward, not just the sales team.
To rectify this, it’s important that the top level priorities include areas of responsibility that move the entire organisation. So you might have 2 or 3 objectives.
- 20% revenue increase this quarter (For sales, and investors)
- Ship features that increase our NPS scores by 10 % (which covers the thing that you sell)
- Retain 85% of our current customers.
Where some CEO’s struggle is getting to objectives 2 and 3. If the organisation can’t agree on what those top line priorities should be – rolling out OKR’s is the least of your problems.
How to fix it?
The best way to ensure priorities are clear is to ask yourself, if you’re the CEO, of all the departments or areas we have, what kind of place do we want to be in, in 3 months time. Sit with your executive team and other leadership roles, and just have a real honest conversation about it. You don’t have to have the answers, but you do need to clarify what that priority needs to be from the conversation.
If revenue really is the only thing on your mind – that’s fine. But ask the head of engineering, the head of marketing, the head of anything – what they think the objectives should be, and ensure you can live with it. The objective should be in service to your customers, and get you closer to your mission.
CEO – “Listen, all I can focus on is revenue right now. Given that, in 3 months time, what kind of outcomes do you think are possible from the engineering team that get us closer to our mission?”
Where this gets unproductive is when teams simply have their own agendas. Their own version of the company in their heads that they wish to see come to light. If this is the case, it might be time to address the leadership problems, instead of your OKR problems.
People don’t buy into the commitment
The second reason OKR rollouts fail relates to commitment. As we talked about in the 5 Dysfunctions of a team, when a team demonstrates a lack of commitment, it’s usually because they felt they weren’t consulted on the objectives – and the ones handed down are terrible.
Let’s say you tell me that we have to get ‘20 new customers to upgrade to our premium plan, within 30 days’. If I’m afraid to have an honest conversation about that (Dysfunction #2 – A fear of conflict), then when you set that objective, I’m going to stay silent.
But deep down, I know that’s impossible to reach, but I just stay quiet about it all the same. So I never really commit to the task at hand (Dysfunction #2 – a lack of commitment).
So the OKR process rolls out, and sure enough, the results are really poor. And when we get to the end and review the scores, we discover that most teams never believed in the results to begin with. Morale drops, everyone thinks OKRs are just another way to strip away their autonomy, and everyone starts to become disgruntled – very, very quietly.
How to fix it
Understand the 5 dysfunctions of a team, and work on it. Building up the emotional intelligence of a team is one of the best ways to increase performance.
Complication destroys cadence
The first time you set OKRs will be a bit weird, a bit broken, and a bit confusing. It will take a good amount of time to just explain how they work, and some people simply won’t get it. I have had these conversations, and at times, they are exhausting.
I’ve seen this a lot from leaders who come from older, corporate environments. They have been using KPI’s for a very long time, and changing the language will have them scratching their heads. They will also become fixated on how OKRs relate to performance, and things like bonuses.
One message to drive home is OKR’s are a simpler way of communicating what to focus on, and what to not focus on.
If you have a situation like this, when it comes to setting the priorities things can get really complicated. Teams might want weeks to decide, some people might want to evaluate different tools to track it, and the question everyone talks about forever is, if OKRs aren’t linked to performance, how do we track performance and give bonuses to the superstars?
These are all great questions, but really need to be covered off well before you try rolling OKRs out. You need buy in from everyone on the framework, and the setting of objectives needs to be swift. You don’t want to be dealing with these questions as your setting objectives.
In my experience, if a team takes longer than a week to set objectives, they’re overcomplicating it.
What happens then is your cadence of setting, doing, and reviewing OKRs is all over the map. Then teams get out of sync, and the process becomes a total mess. The teams that fall behind the most, will start to lobby for removing OKRs all together, then that becomes the war you fight.
How to fix it
The simplest way to reduce complication is when you start, pick 1 objective, and 3 key results only. Make it more of a fun experiment, and don’t put too much focus on being 100% right. You’ll find by setting the OKRs in a really simple, uncomplicated setting will mean it’s a fun experience, instead of a taxing one.
You can even create an OKR day. It’s where you set aside a full day to review the objectives, and set new ones. If you can get into a good rhythm, the process of adoption will be much easier.
At OHNO we’re really passionate about helping your team meet their goals, so we’ve designed OHNO to help get your team focused on their goals, and make objective reporting really simple. Try it out yourself. It’s even free for small teams.