Objectives and Key Results aka OKRs are a hugely popular way of setting goals. But like any framework and tool, when used badly it can cause issues, yet when used well, can build happy, high performing companies and teams. In this post I want to explore some of the pros and cons of OKRs, and how you might approach betting all of the upside and none of the downside.
The first thing to realise is that a company, team or individual without goals runs the risk of working on irrelevant activities. The research backs this up, but goes further and points out that unless goals are hard your levels of focus are reduced, you apply effort for less time – when a prolonged time is usually more optimal, and the added difficulty pushes us to innovate, learn new skills and collaborate more effectively.
If you take a step back and consider what ‘great’ goal setting looks like, you’d list characteristics like its ability to: measure what matters most, align the company and teams, encourage ambition, support autonomy and transparency, keep teams focused and agile, provide clarity on what goals matters most and direct attention there, allow for both ownership and collaboration, provide early warning signs of issues and highlight progress and areas to praise.
Top-Down & Bottom-up Goal Setting
For those of you new to Objectives and Key Results or OKRs, here’s an OKR guide. Essentially OKRs are a goal setting framework that supports and encourages those goal setting best practices. OKRs place prioritization, alignment, transparency, stretch and measurement at its heart. In fact, achieving 100% is not the goal as strange as that sounds. What is strange at first is that 100% can be worrying and a sign that goals were not hard enough. The sweet-spot is to achieve 70% – 80% of a genuinely hard to achieve goal. With this in mind there are a few areas to explore that are important to get right if you’re going to use OKRs.
Perhaps the biggest, and one of the biggest challenges employees have with OKR is that hard targets have the potential to be stressful. But the level of stress will very much depend on the consequences of failure. Companies that prize the ambition that OKRs encourage also tend to prize Psychological Safety. Failure is not feared in a company like this. Instead, it’s seen as a learning experience amongst other things. The issues come when you set hard goals and you have a culture of fear, not safety.
Pros & Cons To The OKR Framework
To be completely transparent about the pros and cons of OKRs, I’d also highlight another potential issue with OKR implementations. It’s unfortunately common for employees to have their contribution to the company closely linked to OKRs and their achievement. There are a number of issues with this. Over indexing on OKR achievement can:
- Drive individuals to create OKRs for everything they are doing, not just for the most important goals.
- Stop the drive for team goal achievement, and make goals less collaborative and more of a solo achievement.
- Reduce ambition and encourage more achievable targets to be set.
Another issue is that OKRs are naturally a great fit for some departments, teams and roles, less so for others. If your role is to follow a business-as-usual (BAU) process like Payroll, and you’re doing this well, you may not want or need an OKR, but your efforts should still be recognised. Teams like Marketing and Product benefit from OKRs and the agility they encourage. They have less BAU and more OKR orientated work to do. The answer lies in everyone having a blend of ways to monitor performance with OKRs being part of any employee’s work contribution story – sometimes big and sometimes small.
So I propose that OKRs are the best of the goal-setting frameworks out there as they are what ‘great’ goal setting looks like when implemented well. But they need to be implemented in the right cultures and teams, in the right way. This means that there can be a learning and transformational overhead. It’s not usually a big overhead, but change has effort involved that needs to be prioritised and committed to.
You Need The Right Company Culture
To use OKR you will need a culture where it’s safe to be ambitious, work autonomously, speak up, share your ideas, try hard and sometimes fail, and have your work recognised based on your role, not just OKRs. OKRs are just part of the Performance Management story, they are not the full story.
So if the norm in your company is employees are:
- Not able to participate in goal setting
- Scared of the consequences of missed goals
- Goal avoidant or low-balling
- Sitting quietly and refusing to speak up
- Not having their unique talents used and contributions recognised
- Not able to connect their work to what the team and company needs to achieve
- Waiting to be told what to do – because being autonomous is frowned upon
Then OKRs are not for you. Avoid them at all costs as you will just see the darkness and dysfunctions of your culture.
If you have the right culture – or you can easily evolve, then OKRs will work well for you. You’ll find an increased clarity, shared purpose, collective achievement and learning to gain. You choose.
Matt Roberts is an OKR advocate and founder of ZOKRI – OKR and Performance Management software. He’s on a mission to share the benefits of OKRs and to stop their misuse or inappropriate use.
The post How To Properly Set Achievable and Meaningful Goals appeared first on SmartHustle.com.
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