Change Strategy Ute Preisitz Veronika Meszarits

The five most common misunderstandings about OKR

Objectives and Key Results (OKRs) is an agile management system for goal-oriented and modern employee management. The benefits are focus and transparency in strategy implementation and leveraging the creative power of teams, that continually bring your organization closer to its vision. However, there are some misunderstandings surrounding OKR. In this insight, we present the five most common misunderstandings and the most important success factors.

Anyone who neglects day-to-day business dies today,

Anyone who neglects strategy work will die tomorrow.

Myth #1: OKR is good for managing day-to-day business

Firstly, the main benefit of OKR lies in managing strategy implementation (“Strategizing” and “Strategy Execution”). However, to have time and resources to work on the strategy, the respective people have to free themselves from day-to-day business and build a safe space for themselves. Of course, this creates time and resource conflicts, but it is precisely this area of ​​tension that needs to be made explicit with OKR and resolved sustainably.

At the beginning of an OKR implementation, the key question for managers should be: What do I do in day-to-day business that follows the strategy? What can I delegate or even leave out to free up time to work on OKR?

In this respect, day-to-day business and OKR have a close connection. Goals from the OKR can subsequently become day-to-day business and/or OKR changes day-to-day business through the goals. Nevertheless, it is critical for success to draw a sharp dividing line and create exactly this protective space for work on OKR

This is because the logic of day-to-day business (Run the Business) and that of strategy work (Change the Business) are different! In day-to-day business it is fundamentally clear what needs to be done. Connections between cause and effect are known and there are established routines that need to be worked through (implementer mode).

The OKR operating system, on the other hand, is geared towards complex strategic challenges, where connections between cause and effect are not clear and therefore, a switch from implementer to discoverer must be made. However, if you put all or too many activities into the OKR, the focus is lost and the OKR operating system loses its effectiveness.

Myth #2: Real goals only have a goal achievement of 60 to 70 percent

This rather confusing statement originally comes from a Google video, which aims to convey the Google approach of “goal stretching”. This is based on the hypothesis of “extending” goals so much and making them unattainable (so-called “moonshots”) that employees think outside the usual framework of ideas and look for solutions.

This is possible in theory, but it is illusory to believe that employees can simply switch to this mode.

This requires an established learning culture (instead of the error culture that often prevails), innovative strength and management skills, as well as sufficient free resources in the company. At least three aspects that, from our consulting experience, can rarely be addressed immediately in organizations.

Depending on the average age of the team and the maturity of the company, it is not advisable to work with barely achievable goals in the initial phase of OKR. This means that goals can be 100 percent achievable if this is agreed with the team.

On the other hand, it must also be made clear that in strategic areas, goal achievement below 100 percent does not necessarily mean that you have failed. The most important question, in addition to goal achievement, is always the key learnings of the last three months and the agreement on what to continue in the next cycle, what to stop and what to do differently.

Myth #3: OKRs need to start at the individual level, or at least be able to be broken down to that level

This myth is often perpetuated by OKR software providers. The extent to which business interests are related to the sale of licenses is uncertain. Of course, there can be OKRs at the individual level, but in this case, they are mostly used for the self-organization of a single person. This can be beneficial – however, the contribution to the added value of the entire organization is limited.

OKR lives from team spirit, from the energy of doing things together and the goals achieved. The smallest critical unit in strategy implementation in the OKR operating system is always a team.

As mentioned at the beginning, OKR is the operating system for discoverer mode and not for implementer mode. We cannot escape the latter, the daily company routines (“the urgent things”) do not give employees much leeway. The discovery mode (“the important thing”), on the other hand, is more strenuous, is all too easily pushed aside by day-to-day business and requires even more incentive, motivation and, finally, the group’s creative potential.

Myth #4: Objectives come from higher up and the employees need to find the key results

It would be practical to stay in hierarchical thinking, develop the objectives in the management circle and then expect the teams to find the respective key results. However, this does not work from a content/technical perspective and inevitably leads to demotivation and lower performance among employees.

Objectives and Key Results belong together as a set. One cannot exist without the other. Therefore, an OKR set can only be developed, edited and subsequently evaluated by a self-responsible team. However, this does not imply a lack of transparency at all hierarchical levels or that alignment shouldn’t occur before the cycle begins after OKR planning in the teams.

However, the principle of “loosely coupled” instead of “strict cascading” always applies.

Objectives and Key Results belong together as a set. One cannot exist without the other. Therefore, an OKR set can only be developed, edited and subsequently evaluated by a self-responsible team. However, this does not imply a lack of transparency at all hierarchical levels or that alignment shouldn’t occur before the cycle begins after OKR planning in the teams.

However, the principle of “loosely coupled” instead of “strict cascading” always applies.

Myth #5: OKR pays off after the first cycle

“OKR is just a method that you just have to “teach” to our employees… read a few books and then it will work!”

The truth is, that OKR represents an opportunity to formulate the right goals in addition to the art of leadership, which also requires focus, consistency in implementation and a corresponding mindset in the organization. So, it’s not primarily about knowledge, but about ability – and ability doesn’t necessarily arise from knowledge.

Skill is only acquired through trying, repeating, making mistakes and a continuous improvement process – ideally with an OKR master or a consultant.

From our point of view, even with good support, it usually takes three to four cycles until companies are ready to really benefit from OKR. However, if the introduction of OKR is thorough and systematic, the organization will develop enormous energy for change within a very short period of time.

Berater/in

Ute Preisitz

Managing Partner

Veronika Meszarits

Managing Partner