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These are the eight most common pitfalls with Objectives and Key Results

Change ManagementNew WorkOKRs

Objectives and Key Results (OKRs) are an important component on the way to more agile network structures and a departure from the rigid Taylorist management model. However, the implementation of OKRs is a long-lasting and challenging process, that has to be designed and supported very consciously. Therefore, let’s take a look at the most common pitfalls and most important reasons for the failure of the OKR implementation. 

 

1. The target image is not clear. 

 

Many organizations underestimate the necessity of explaining to their employees the reason for which a new process should be introduced and which goal it pursues. Initially, this is associated with some effort, but it is one of the basic preconditions for a successful implementation of OKRs. A study by Gagné and colleagues shows the importance of the understanding of reasons for organizational changes. Their results revealed that the acceptance of change processes is higher if the employees know why the process is introduced and what its aim is. (Read the whole article here.) 

That is why the comprehensible explanation of the purpose of the OKR implementation is so essential. If you want to learn how to communicate the relevance of OKRs in your organization, take a look at the Workpath Masterclasses and our E-Learning course.  

 

2. Success is neither planned nor monitored.

 

This point is closely linked to the lack of a clear target image. If it remains unclear what has to be achieved with OKRs, it cannot be sufficiently proven that the new process is successful and creates value in the organization. The challenge is to make abstract terms such as agility, self-organization and focus tangible and measurable. In addition, realistic expectations must be formulated. If it has not been clearly defined from the very beginning how success is going to be measured over different time horizons, early progress quickly falls by the wayside and is not collected. In the initial phase of the OKR introduction it is completely normal and even necessary for scepticism and resistance to arise. These are often more present in comparison to the initially small successes and advances. It is therefore recommended to concentrate on measurable factors such as employee acceptance, team participation, customer benefit description in goals, cross-functional networking of teams around goals as well as weekly check-in activity and to define target values in this respect.

 

3. There is a lack of time resources and attention.

 

OKRs are not primarily an efficiency-, but rather an effectiveness tool. This means that, initially, companies do not save any resources, but have to invest effort and time upfront. The new processes have to be learned and established and OKRs demand a structured, light but high-frequency communication between all teams. This way, they help to react quickly in increasingly volatile and complex market environments. Therefore, you should expect 1-2 days per employee per cycle (usually one quarter) and 3-4 days for managers and coaches.

Once OKRs are established, many organizations start to realize that they are saving time. For example, priorities and resources are assessed more realistically, cross-functional coordination is improved and meetings can be organized more efficiently. Some organizations also recognize that they do not need certain meeting formats at all. However, the initial investment is absolutely necessary, otherwise the implementation of OKRs remains only a superficial initiative and is doomed to failure at an early stage. With regard to the first point, it is therefore important that the duration of the adaptation process is already taken into account in the target image. This ensures that no one in the organization has unrealistic expectations of the speed of the process. It is crucial to create awareness of the fact that it takes 1-2 years for OKRs to function smoothly for the organization. In addition, employees who participate in the process of implementing OKRs, e.g. as coaches, have to  be enabled and appreciated for this engagement. This is essential for process hygiene and creating sufficient discipline in the process. OKRs are therefore a very conscious investment in the sustainability, flexibility, and customer centricity of one’s own organisational operating system. 

 

4. OKRs are insufficiently integrated with existing processes and necessary overlaps and connections are not explained precisely.

 

OKRs with Workpath become a strategic control system for the organization and all teams. They represent the most important goals as well as the process of value creation for customers. Accordingly, OKRs are a core process that has to be integrated with many other central processes and systems. This results in logical questions as to how OKRs fit into the process environment so that there is added value and no unnecessary work or duplication. Within this discussion, organizations will potentially recognize that existing processes have been ineffective for some time. 

Most of them already have a system of agreed objectives with individual goals and often associated incentives. Therefore, the interaction of OKRs with personal goals is one of the most frequently discussed interfaces. OKRs are very different from individual goals as they are developed and processed collaboratively at team level and used to plan value contributions. OKRs are in no case associated with monetary incentives to avoid false rewards that reduce employee motivation and creative problem-solving skills (learn more about effective incentive and control systems here.) Most organizations therefore develop their processes in a direction where OKRs are at the center of their daily work and teamwork as a collaborative planning and communication approach, while personal goals focus more and more on role-dependent medium-term responsibilities. 

Another aspect to be clarified is the combination of strategic control with OKRs and project management. A frequent question that should be addressed early on is the linkage with agile project and task management approaches such as Scrum. Contrary to what is initially assumed by many beginners, these processes are not redundant and can be well integrated in terms of content and process. While OKRs should define the strategic direction and planning of clear, differentiated value creation across all teams (what value do we want to create, what is the right and important thing to achieve), methods such as Scrum ensure that these defined priorities are implemented efficiently and quickly. A good project and task management, no matter which method is used, should therefore be derived from the OKRs and define what should be done in detail to create the results and target states defined in the OKRs.  (Read more about OKRs and Scrum here.) 

Therefore, it is essential to have a clear target image that shows how different types of targets can play together and be harmonized step by step. For this reason, it is highly recommended to involve internal stakeholders (i.e from HR and project management), at an early stage and to develop a joint process design. 

 

5. Executives do not exemplify the process and invest too little time.

 

This is one of the most common reasons why the introduction of OKRs fails. If executives don’t define exemplary OKRs themselves, don’t talk about current goals in townhalls, events, meetings and 1-on-1s, if they don’t participate in alignment workshops, check-ins or OKR kick-offs, and don’t actively use OKRs as leadership tools, then employees won’t take the implementation seriously and the organization won’t accept the process. Furthermore, managers will not be able to develop the necessary understanding of the added value that OKRs offer them and how they can really manage their organization.

It is therefore a prerequisite that all managers agree on the introduction and implementation of OKRs, understand the objectives and the desired benefits, and are willing to invest the necessary time. An internal coaching community can then help support leaders without relieving them of their responsibilities. The coach trainings and trainer certifications developed by Workpath are specially designed to consolidate the knowledge about OKRs in the company. In addition, it can be beneficial to use leadership models and leadership principles as a basis to illustrate how work, planning, and reporting with OKRs can meet these principles in detail and help to operationalize them. In this way, the expectations of managers and their role are clearly communicated.

 

6. Employees are not sufficiently empowered through training and internal contacts.

 

An agile management system with more self-organization, focusing on customers and value creation as well as controllable key figures, which are defined by the teams themselves, demands new skills from employees and teams. In many companies, these skills were not previously required and were therefore not consciously developed. Successful implementations of Workpath show that about 8-12% of the employees involved should be trained as internal coaches. Here you can learn more about Workpath certifications, coach trainings and E-learning offers

Internal coaches should have a clear role profile and unambiguous responsibilities. This includes supporting the teams in the process, introducing discipline, ensuring process hygiene, being contact persons and conducting coaching sessions. Often, the need for further coaching or training becomes even more visible during the process. Therefore, the empowerment of employees in the transformation process should rather be regarded as a continuous organisational and employee development process and supported in the long term with offers such as interactive training, information sessions, webinars, Q&A sessions, etc.

 

7. OKRs are too rigidly aligned with existing organisational structures and management lines.

 

The effect of OKRs manifests itself especially in the fact that value creation can be planned and achieved in agile networks of cross-functional teams. A core idea here is that effective networks and flows of value creation are usually not effectively mapped by organizational structures, and that disciplinary lines sometimes even hinder strategically relevant value creation. If this is not understood, a problematic development often occurs: OKRs are set along the organizational structures and reporting lines. In the process, this limits the possibility that OKRs and the dependencies and (virtual) teams mapped with them can also detach themselves from the organizational chart, skip hierarchy levels and be implemented in a way that optimizes value creation. This, of course, always assumes that strategically relevant contributions can be made better and that speed, customer proximity, coordination or focus can be optimized. If one becomes aware of this, it is obvious that not every hierarchical level necessarily requires its own OKR sets. 

This way, OKRs often make it visible, for example, that certain teams are loose groups of individuals, rather than a unit that creates value together. The functional separation of teams can therefore be locally efficient, but overall it can hinder the understanding, coordination and value creation of the customer (internally or externally). In this case it is difficult to set common OKR goals. Rather, the concerned individuals should distribute themselves among the priorities and goals (sometimes only in virtual teams) on which they actually work and where coordination is necessary. In this context, OKRs provide an opportunity for continuous improvement and organizational development. In most organizations there are already teams and individuals who coordinate themselves in small, faster acting units independently of the organization chart. More and more investigations suggest that in the meantime even a large part of the actual added value takes place in these network-like structures and not in hierarchical structures. However, they are rarely visible and controllable. This can be changed with OKRs and can be considered more strongly in the control of the organization. 

 

8. The OKR process is too much oriented towards the process design of other organizations.

 

OKRs are a globally utilized framework that has evolved over the past 30 years as an open source approach in various regions, industries, and enterprise sizes. Therefore, there are now also numerous characteristics and interpretations of this control approach. Companies fail again and again with the introduction of OKRs because they simply copy certain process rules and formats from other companies. They do not take into account the fact that these companies may operate in other industries, cultural contexts, with other employees and in non-comparable business models. If this form of imitative introduction occurs, the framework is often perceived as a rigid, inappropriate tool. In this case, the necessary acceptance by employees and managers cannot be achieved.

A typical example is Google with its stretch-goal philosophy. It states that goals must be set so ambitiously that they can only be achieved to a maximum of 70%. Although there is a psychologically meaningful concept behind this, it cannot simply be transferred to other companies which, for example, do not have an American work culture (affinity for risk), a less digital business model with exponential growth potential or other personnel structures. (Find out more about when stretch goals make sense here.) 

Impulses taken up by other companies are therefore helpful, but should be questioned and adapted context sensitively to one’s own process and circumstances. That is why Workpath has created OKR+ as a standard for a sustainable successful introduction and application in established companies (mostly more European) with several hundred to tens of thousands of employees.

If you are keen to learn more about OKRs and take part in an exchange about the topic, join our Pathfinder Community and receive our newsletter

 

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