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Introducing OKRs in Traditional Companies: A Conversation with Nicholas Stanforth

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Nicholas Stanforth is a management consultant and business coach with a focus on agile leadership and OKRs. He supports established organizations all over Europe and guides them through digital transformation projects and the implementation of new, agile processes.

For how long have you been active as an OKR coach and what kind of organizations are you working with?

I first found out about OKR at the end of 2013 and it resonated with me straight away. So I did some research and soon got started. I ran a company for eight years and my background is in automotive engineering. What first attracted me to OKR was the way it combines the lean and agile approaches whilst getting everyone involved in creating strategic progress.

It’s hard to put my customers in a box I’m afraid because they are so diverse. From biomedicine over FMCG to traditional German manufacturing, I work all over Europe with customers typically ranging from about 500 to 50 000 employees.

The first step has to be management buy-in. OKR sounds so simple at the start, but it initiates a cultural change. - Nicholas Stanforth

From your perspective, what are the most important steps for implementing OKRs in a traditional company of the German “Mittelstand”.

The first step has to be management buy-in. OKR sounds so simple at the start, but it initiates a cultural change. Some managers don’t see the true benefits straight away, but they should at least agree to 100% support a pilot project.

The next big enabler is to be strict on criticism. It’s hard for managers coming out of a traditional environment to distinguish between personal performance and what the OKR has achieved. People often get it when I tell them the scary goals are not the problem. It’s the scary managers who can hold OKR programmes back.

Once you have these two conditions, it’s all about good old patience and understanding. OKR does not work if you see it as a small add-on to your business. I don’t believe in quick presentations and letting people get on with it. Everyone has their own personal challenge with OKR, so managers need to invest time in their teams to help them support that change.

What are the typical challenges organizations have to overcome in order to implement OKRs successfully?

Obviously every company is different. So in addition to my last answer, you might meet a new customer with no real strategy needing grassroots support on one day and then visit a different customer the next day with a very detailed strategy, who are finding it hard to detach and focus on the few important things.

What always helps is if you manage the interaction with interface departments and stakeholders. Letting other managers know that achieving 40-70% is ok for OKR and why can save a lot of unnecessary tension.

What kind of tools do you recommend teams in order to define effective goals? How do you feel about stretch goals?

When you set an Objective, you just need to ask yourself what condition you would dream of achieving and why. Valuable Objectives are almost always not measurable, but they can be felt in your stomach. I recommend building Objectives with half a sentence about the specific topic and the other half explaining the benefit we want to achieve.

Key Results on the other hand need to be very specific and measurable because they enable the dream. So whilst most parents share the same Objective of having “great” kids, their Key Results could differ wildly between getting good grades at school to doing well in sport or even marrying into a happy relationship with kids of their own.

How do you feel about the connection of goal achievement and financial incentives?

I am a big fan of paying bonuses and sharing successes, but these should be related to the overall departmental or even company success.

OKR on the other hand is often about getting people to think about how to break the mould and test innovative approaches. You need detailed KPIs to run a business, but they will be worthless if not honest. If you directly connect innovation to a personal bonus, you will neither set nor harvest valuable OKRs.

OKRs increase transparency and let employees know what their colleagues are working on. How do you convince stakeholders to set ambitious goals without fearing public failure?

Celebrate the successes. Treat people like people, not robots and keep the scary bosses chained up. As soon as people feel the benefits, the resistance will fade away.

In the first cycle, it’s all about getting people on board. In the second it’s about truly understanding both the theory and the process. In the third it’s about accelerating and making amazing change. - Nicholas Stanforth

How would you define and measure the success of OKRs (particularly during the implementation)?

In the first cycle, it’s all about getting people on board. In the second it’s about truly understanding both the theory and the process. In the third it’s about accelerating and making amazing change. However, if you don’t see some hidden potentials delivering unexpected benefits in those first two quarters, then you should probably rethink how you define your Objectives.

What is the most important piece of advice you would share with organizations introducing OKRs?

OKR is relevant to every kind of organisation. It is a framework to enhance your performance, which you fill with whatever content is important for you. If you want to get 10% better, work 10% harder. If you want to achieve a step-change, take a look at OKR. Perhaps most importantly of all, with the right attitude, it is a lot of fun and helps people to love their job.

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