This article discusses anti-patterns when setting up Objectives and Key Results. It examines common mistakes and also suggests best practices for avoiding these mistakes.
Part 2 - How to write good OKRs
Handling change work and maintenance work in the same way
Too many goals
Uninspiring goals
Objectives not connected to Key Results
Tasks written as Key Results
Vanity metrics
Not agreeing on targets for the Key Results
Part 2 - How to write good OKRs
1. Handling change work and maintenance work in the same way
OKRs are often used when creating something new or making a major improvement. Once the new improvement is finished and put into standard practice, the focus shifts from creating to maintaining. The OKR framework fits better to the creating phase and many KPIs fit better to the maintenance phase.
Progress on the OKRs is best followed up on a regular basis with discussions about learning and decisions (see Blog post on Anti-patterns in Running OKRs). Business-As-Usual performance of standard practices can be monitored automatically and actions only need to be taken when then monitoring gives us an alert.
For instance, let's say we set an OKR to reduce the administration time of recurring orders. Once the new administration time is improved, we only need to act if it turns out that we cannot maintain the new standard.
It's crucial to differentiate between OKRs and KPIs to avoid overburdening the available OKR capacity with BAU. Otherwise, we risk continuing the same practices we used to do, only with different names borrowed from the OKR framework. In doing so, we miss out on the potential benefits of improving decision-making and information flows.
2. Too many goals
OKRs seek to align efforts and bring focus to the organisation. Setting too many goals will dilute this focus and decrease the likelihood of achieving them. Research and experience have shown that having too many goals decreases their effectiveness. As a general rule, it's recommended to limit the number of Objectives and Key Results to about three each. This ensures that everyone remains focused on the most critical areas and can achieve them successfully. Read more about goal dilution
3. Uninspiring goals
Engaged and motivated teams tend to be more productive and valuable compared to demotivated teams. (Harvard Business Review - 22% up) The Objectives and Key Results should inspire the activities and tasks that need to be accomplished. Therefore, it is recommended to set OKRs that appeal to both the rational and emotional sides of the team members.
For example, a goal such as "Raising the vaccination rate of youths from 5-15%" is a straightforward and uninspiring objective. Instead, a goal like "Saving the lives of 20 children through increased immunity" is more inspiring and motivating, as it connects the team's work to a meaningful outcome.
4. Objectives not connected to Key Results
It is crucial to establish a clear connection between the Objective and the Key Result. The Key Result should be an indicator which proves that we are moving in the direction of the Objective.
Example
Say a startup company selling software has the Objective to become profitable. One Key Result can be the number of new customer sign ups.
While it may not always be easy to identify the right Key Result, it is essential that everyone involved understands the relationship between the two. If the connection is unclear, there is a risk of creating confusion rather than alignment.
5. Tasks written as Key Results
It's important to distinguish between Key Results and tasks. Key Results should be outcomes. An outcome reflects a change in the behavior of others, while tasks are actions that you have complete control over.
Example Google used the outcome number of users of the Google Chrome browser as a Key Result between 2008 and 2010. A task could be: Make the browser faster or Pay all salaries before the 25th.
Formulating Key Results as outcomes rather than tasks is better for decision making when collaborating across departments because different teams have different touchpoints and not everyone can affect all Key Results equally. It's also important to note that OKRs should not incorporate everything we do, as there is often a significant amount of Business-As-Usual (BAU) work that needs to be done. BAU tasks should not be incorporated into Key Results, as the focus should be on joint outcomes rather than keeping people busy.
6. Vanity metrics
"Vanity metrics" refer to using metrics that make you look good without providing any real insights into your performance or helping you make informed decisions. Using such metrics may create a false sense of achievement, while neglecting underlying problems and challenges that need to be addressed. This approach can hinder your ability to improve and grow as an organisation. Instead, it is important to focus on metrics that are relevant and provide valuable insights into your performance and progress towards your goals. These metrics should help you make informed decisions and take actions that drive real improvements.
Example
Your goal is to expand your business and attract more customers via use of LinkedIn.
To measure the amount of likes on your posts would be considered a vanity metric. The amount of likes is easy to calculate but likes don’t necessarily mean more business.
It is better to focus on the quality of the new relationships you create and the conversations you have. It is not as straightforward to measure quality of relationships, but when this is done well it will create more valuable insight.
7. Not agreeing on targets for the Key Results
Agreeing on the dimension to use for your Key Result is just the first step. It is important to set a specific, measurable, achievable, relevant, and time-bound (SMART) number for the Key Result to track progress, achieve results, and learn from experiences throughout the OKR cycle. Without a SMART goal, it will be difficult to evaluate success and adjust the strategy accordingly.
Good Example:
Increase sales revenue by 10% before Q3 by targeting our top 20% customers.
Bad Example:
Improve customer satisfaction by providing better customer service.
The bad example is less clear since it is:
not time bound
not specific
not measurable
too broad to be achievable
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Hope this article was valuable for you and it sparked relevant questions. For more insights, make sure to tune into our upcoming webinar:
Gustav Nygren
