Are there any proven transformation strategies that help an organization to move from the annual performance and review process to a more agile system with OKRs? What advice do you have for enterprises that are worried about the extra effort and about letting go their old processes. Can the processes maybe be merged?
As with every transformation process, you have two fundamental options: *Top-down* (the whole company from the beginning) and *bottom-up* (expand from one unit). Both approaches work and have their pros and cons. If the company is afraid of letting go, the current system maybe works (in some way) for them and they should start with a subset of the company trying out OKRs. During this transition period the old process can be followed in parallel and the additional costs are relatively low. Once the company can grasp the benefits of OKRs, they propose OKRs to more teams and consider fully replacing the traditional performance review with a replacement (e.g. a variable compensation based on EBITDA).
How do I convince the most important stakeholders in our organization? How much management buy-in do we actually need for the OKR roll-out and are there maybe ways to start the process bottom-up as well?
I would say the necessary stakeholder buy-in largely depends on your company. If you are working in an organization with autonomous teams that have a large degree of freedom, the teams can decide to use OKRs in addition to the current system and spread the knowledge they have created with the rest of the company. More teams could follow their path afterwards. This can be especially true for product development teams that own their product vision. In that scenario, you probably do not need any management buy-in at all. So yes, bottom-up can work. Because you are asking this question, I assume that you are facing challenges here. Based on my experience, you can convince stakeholders best if you explain the expected outcomes and make clear that it involves only little risk. If you get the “go”, you can start with one team bottom-up.
If we want to trial OKRs and roll them out step by step, what would you recommend? Rather start top-down with the first few management levels, or take one department and roll out OKRs within their entire unit including all frontline employees? Are there any types of teams where OKR introductions work particularly well or not so well?
From my experience, I prefer the bottom-up over the top-down approach. Teams that really work well are e.g. Product Development or Business Development. These units mostly have a lot of autonomy and are used creating ambitious Objectives. Operational units like Finance, HR or Administration struggle the most but it if they manage to wrap their head around OKRs, they are the most engaged units.
What are the best first steps to evaluate if OKRs are even right for my company and if it is the right timing at the moment? How would you approach this?
Usually you have plenty of options how you can improve your business. I would try to define your core challenges and see what solutions are available to address them. I would ask myself if I have the feeling that the company or team is reluctant to define clear and ambitious Objectives or transparency and the alignment of goals within the company can be improved. Then you might consider OKRs.
How can we engage colleagues with a high ratio of daily business like in accounting or sales? We find it difficult to set goals with them while acknowledging that they are focused on their operations and do not see the value of checking in the process weekly.
Personally, I think it is important to underline the contribution of those operational teams to the company success. You can do so by simply showing them how they contribute to a specific Key Result. Sometimes this is the moment when departments come to live and take full ownership of their part in the value chain.
Could you give us an overview over the most important meetings and communication formats throughout the OKR cycle? What are the conversations we need to have, in which order, and are there best practices for the agenda of these meetings?
1) Conversation about Q1 OKRs (management and team)
2) Locking-in Q1 OKRs (management and team)
3) Weekly Confidence Level Review (team)
4) Grading Q1 OKRs (in teams, afterwards communication to management)
The only tricky meeting in my eyes is 1): You might want to have a honest talk about the Objective first to really understand the essence here and then derive key results. If you start too quickly with formulating fancy sentences, the core gets lost.
Do you link higher level Key Result (organization or department level) to more than one supporting Objective? So should usually several teams be able to work on the success of one company Key Result?
Generally speaking, a cascade should be used to have alignment within the company. Since OKRs also are about the intrinsic motivation of teams, I would rather tell the “lower-level unit” about the Key Results of the higher-level and let them come up with their own Objective to meet the higher-level Key Result. If the company e.g. wants to increase their Net Promoter Score, a lot of units will be involved, from marketing to customer service.
What is the role of OKRs in digital or agile transformations? How can OKRs be introduced in such a project?
From our point of view at Deloitte Digital, OKRs are part of the operating model that a digital transformation project wants to set up. So we typically help our clients to apply OKRs and bake them into their operating model right from the beginning.
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