Should everyone be using OKRs? — Issue #11

In the world of product development, OKRs have almost become the norm as an established approach for product organisations, but are they for everyone?

I personally am a big fan of OKRs, but in recent months and using the How Might We method of looking at the same question from different angles, the question came up whether OKRs are always valuable.

But before we get into answering that question, let’s look at OKRs, because the principles and concepts often get very muddied.

OKRs are easy right?

I’ll admit that at first glance Objectives and Key Results (OKRs) seem really straightforward and direct.

At the top level level we have the Objectives, which focus on outcomes we want to achieve.

And then, at the second level we have the Key Results, which are measurable results we will try to achieve to take us closer to our objective.

The third level is about the initiatives or pieces of work we will work on to try and achieve those results.

But then the following “challenges” arise:

1. “I won’t be working on anything with a customer value this quarter because we’re building it.”
2. The difficulty of understanding the difference between an objective and a key result;
3. Not making the KR measurable;
4. The misunderstanding that OKRs are a commitment to deliver a result or deliverable;
5. Defining OKRs that seem achievable, rather than shooting for a little bit higher to incentivise us to strive for more than just enough;
6. Objectives that are so broad that they don’t provide a focus;
7. Too many OKRs…

I could keep going on, but these are the main ones I’ve seen.

How can I get OKRs right?

There is a lot of literature online about how to do OKRs right, as well as suggestions on what is the wrong way to do it.

I’ve found that the best approach is reading all that literature and learning by trial and error.

If it helps, here are some of the baseline principles I use:

#1 — Objectives should inspire us

If an objective doesn’t inspire me, then I’m pretty sure I’m not going to be motivated to do anything incredible.

Instead of: “ Improve customer acquisition. “

Something like: “ Improve the onboarding experience to retain more valued customers. “

#2 — Objectives should be focused on a problem

If you look at the two example in #1, you will see that the second example is focusing on the problem of both on-boarding and reducing churn of customers who will bring value.

#3 — Key Results (KRs) MUST be measurable

If you’re still building something and it won’t have direct customer contact until further down, thus not having measurable value then you have two potential options:

1. Either you will be improving efficiency, speed, quality etc. and those should be your interim metrics.
2. If however, you can’t find a way of measuring it at this time… it’s just doesn’t make sense being a KR. So don’t try and justify adding it.

If an OKR is based on what is achievable considering existing constraints, then you just aren’t being ambitious enough.

What is achievable? Now take that number and ad an extra 20% on top. Now you have an ambitious OKR.

If at the end of the quarter you were able to achieve 100% of the OKR, then you need to be even more ambitious next time.

Achieving 70%-80% is considered a win. Anything above is going beyond expectations. That’s how OKRs work.

#5 — Quantity does not equal quality

More OKRs, KRs or Initiatives do not translate into more value.

Having too many objectives is unrealistic and will affect morale and create a feeling of never being able to accomplish anything. Both teams and customers need to feel incremental accomplishments.

We want to build solutions that will scale and stand the test of time. That will provide the best experience for our customers (B2C and C2C).

Be ambitious, but not completely unrealistic.

#6 — OKRs are not stagnant

Discovery through research or learning through experimentation will improve our understanding of a need or problem. OKRs should be updated when appropriate.

We shouldn’t change OKRs because we’re scared, but rather change them when the scope has changed or something has been deprecated.

Even unaccomplished OKRS provide us with learning for future reference.

#7 — OKRs are NOT a commitment

Despite the feeling that we’re committing to a deliverable or achieving a result, that is not what OKRs are.

They do not substitute a roadmap of what you will be delivering or building.

They will help you maintain focus on what makes sense to build to try and achieve those outcomes, but the actual initiatives are anther piece of work.

The results are based on what you assume you are able to achieve and a little more ambition on top. It’s at best a calculated guess based on assumptions and historical knowledge.

With experience you become better at making those guesses, but at any time, you could be surprised negatively or positively.

If you’re never surprised or always hit the nail on the head, I would suggest asking your self if you’re adhering to principle #4?

Back to the main topic: Should everyone be using OKRs?

The reason I needed to go into some detail before addressing this question, is to be easily explain that OKRs aren’t right for every organisation or context.

Sometimes, the timing isn’t right and adding OKRs will only add to the confusion or mess. If for example you have various frameworks implemented like KPIs, Norths Stars, Planning etc.

Pausing the use of OKRs for a quarter or two while going through a big change or rocky period is ok.

Using a different framework is also permitted, just as much as matching OKRs with existing frameworks.

In conclusion

At the end of the day, OKRs may not be the best approach for you or your organisation and you shouldn’t feel obligated to use them, just because all other product organisations seem to be using them.

In majority of the cases I’ve seen, they are being used incorrectly and so their perceived effectiveness is due to something else completely, so don’t believe all the hype.

Don’t be afraid to experiment. I’ve seen great results in both top-down and bottom-up OKR definition. I’ve also seen the opposite.

Always keep the principles and objective of OKRs in mind when testing out and admit if you’ve gone off track, or you’ll do a disservice to the process.

• Are you using OKRs?
• Do you believe in using OKRs?
• How are OKRs working in your organisation?
• Have you worked in organisations that don’t use OKRs successfully?

Please, do share your questions and stories.

Originally published at https://www.getrevue.co on March 30, 2022.