In “Measure What Matters”, John Doerr introduces the concept of the OKR. The OKR is basically a quarterly planning technique created at Intel (by Andy Grove) and further refined at Google.
Setting Objectives
OKR stands for Objectives (WHAT you want to achieve – a stretch goal in many cases) and Key Results (HOW you will achieve and track progress against the main goal).
In this method leaders work with their leadership team to identify a handful of key objectives to focus on for the period (one quarter or one year). Then the leadership team works out what 3-5 Key Results need to be achieved in order to fulfill each Objective.
The company’s OKRs are then published and tracked for completion. All departments and individuals are also asked to create and share their own OKRs in alignment with the leadership OKRs. So in this sense, planning is not entirely top-down and the feeling of ownership and empowerment helps to contribute to accountability. People are further encouraged by seeing the leadership making progress against their own OKRs also.
Measuring Matters
What and how you measure sends a strong signal to your company. Famously, Wells Fargo decided to focus on sales targets as their Key Results, which led to branch managers feeling pressured to open millions of fraudulent accounts. One of our clients used the quantity of sales meeting reports per week as a measure of penetration into client organizations, but their sales managers spent less time talking to customers and more time writing reports as a result. So be prepared to change the measurement as soon as you realize it is producing undesirable behavior.
How you measure is equally important: Measures can be absolute, or on a scale. For example, you can measure success as: Y / N, Red / Yellow / Green, or on a scale from 1-10. Each method will produce different behaviors and different ways of reporting. If the KR is complex and the way forward is uncertain, then a measurement that allows for some trial and error and learning as one gradually progresses to the goal would be best, rather than a pass or fail score.
Coaching for Results
OKRs by themselves do not guarantee results more than any other planning technique does. According to Doerr, managers must have continuous coaching conversations on the OKRs set by staff in order to get results.
He calls these CFRs – Conversations, Feedback and Recognition. The function of these CFRs is to check progress, provide support and recognize successes.
Essentially these conversations follow the classical pattern of a coaching conversation. In other words, a one to one discussion between manager and direct report in a private location, taking a non-judgmental approach. And as with all plans we make in our VUCA business environment, both the manager and the staff need to be prepared to change the plan as lessons are learned.
The GROW model is be a very useful formula for conducting a CFR discussion:
- Goal – What were you hoping to achieve?
- Reality – What did you try and what actually happened? What can we learn from that?
- Options – How can you move forward? What support do you need from me?
- Way Forward – What will you do next
Without regular coaching conversations, it is too easy for OKRs to get de-prioritized by other, more urgent matters.
Culture Counts
The OKR method will only work in a company with the right kind of culture – if there is no trust, openness, willingness to take risks, ability to collaborate: no psychological safety, then not much will come of it.
But on the other hand, if you would like to create and reinforce a culture of increased openness, responsibility, recognition, collaboration, trust, risk-taking and innovation, then applying these methods rigorously and continuously over time will move you in the right direction. It may take time and sustained effort, but it will gradually produce change.
Combined with other culture-building techniques the OKR method can encourage learning, frank discussions and autonomy with accountability: the key ingredients of a powerful, modern corporate culture.
