Why do I need OKRs?
OKRs (Objectives and Key Results) are a welcome alternative to traditional tools such as leadership and performance management tools because they are better suited to mastering complex, novel tasks.
OKRs enable managers and staff to find innovative solutions together and to pursue them consistently, even if they are navigating through new, uncharted waters.
Objectives & Key Results – from personal experience to organisation
To illustrate how it works, our expert Michael Kubiena likes to describe in his workshops how the OKR method was able to help overcome a very personal challenge and then translate this experience into the context of an organization.
“Having moved to Istanbul 2 years earlier and having just turned 40, I decided to mark the occasion with a personal endeavour: to swim across the Bosphorus, the Istanbul waterway between Europe and Asia, in the annual competition. Something I obviously had never done before, nothing even remotely comparable. While I am a decent swimmer, I dislike competitions, big events and large crowds. Furthermore, swimming 7 kilometers in 2 hours, albeit with the Bosphorus’ current, is no easy feat, even for swimmers much better trained than I was.
As the project started feeling rather overwhelming and overly ambitious, I tried to break it down into workable physical, logistical and mental challenges. The physical preparation took practice and determination. Progress could even be quantified and measured (distances covered in a given time, endurance, speed…). The logistics was about completing a range of individual tasks: finding a practice pool, making time, registering for the event and the test-rehearsal swim, finding practice partners and other participants, getting a health check-up… The mental challenge was the toughest nut. Neither is crossing the Bosphorus for practice purposes an option, nor is open-water swimming in & around Istanbul easily done.
What could be done though is to learn mental exercises so as not to panic in stressful or scary circumstances.
In essence, I had found myself a highly ambitious objective, in an entirely novel territory for me, a proper personal moonshot. In order to render it obtainable I divided it into tangible chunks, mid-range milestones and key results. Did I do it in the end? Did I swim across the Bosphorus with hundreds of other competitors? No, I did not. I did not even make it to the starting line. But I was well-prepared, ready and in great shape at the right time. In the end, life intervened with totally different plans and even more memorable developments which I would have never experienced were it not for that seemingly untenable objective I had set my sights on and the respective key results leading towards it.”
Why OKRs help you with complex challenges
What can OKRs contribute if your company is moving in an ambitious direction and on unfamiliar terrain?
When it comes to innovation and new business models (as in the case of many startups) or when a company moves in an environment characterized by constant change, old, rigid planning, goal-setting and evaluation methods are of little help and often even a hindrance.
Comparative values from the past (KPIs, benchmarks) make little sense if the main focus is on innovation or the development of new business areas and markets. In this case, the direction of travel is clear, but specific, especially purely quantitative goals are not; thus key results, in the sense of milestones, are better suited to assessing progress and further development.
Shared responsibility (‘ownership’) via OKRs
OKRs are also particularly helpful in aligning priorities at the corporate level with those of teams and individuals. Vertically (i.e. along hierarchies) this was already possible with traditional approaches. However, horizontal synchronization (i.e. between functions or functional teams) is much easier and better with OKRs. Joint and shared responsibility and common ‘ownership’ are prerequisites for being able to cope with complex challenges (e.g. growth, innovation, sustainability) at all. Individualism and silo thinking are thus counteracted or stopped.
OKRs and leadership
OKRs are a powerful participatory leadership instrument since priorities are not simply and rigidly cascaded top-down but identified, agreed upon and addressed in a dialogical fashion. Guidance and feedback on progress and performance are still the responsibility of the manager, but they are not dished out only once per year (in performance meetings dreaded by everyone involved); they rather become an integral element of work and collaboration.
Ultimately, employees and teams take charge of their own contribution and performance (Key Results) while managers guide (towards Objectives or in strategic directions), facilitate and provide feedback in a less formalized but still structured and transparent process.
OKRs and strategy implementation & communication
OKRs, when done right and really well, help to bring strategy into the organization. Even if it is neither explicit nor formalized, OKRs enable the translation of broad priorities into concrete action. Doing it right does not have to mean developing complicated tools (there are many off-the-shelf OKR tools) or processes. Rather, it is important to get started with simple but decisive steps and to learn by doing.
OKRs are neither a completely new nor a completely different way of working or planning and evaluating performance. What OKRs do, however, is to rethink more traditional performance management approaches and target systems, making them applicable to current management and organizational challenges.
The decisive contribution of OKRs is the broader scope of action: away from the strict focus on setting quantitative targets and their already only apparent objectivity, towards strategy communication and implementation.
Both as an instrument of participative leadership and as a structured approach to establishing clarity, transparency and ownership in the organisation, OKRs are particularly suitable for those companies that want to master significant growth, change or transformation.