Every 2 weeks Ingo Stoll from the Masters of Transformation invites diverse experts on business, science and society to talk with them about digital transformation. The guest for the 64th episode of his podcast is Johannes Müller, CEO from Workpath. In the #MOT cast (German) Johannes talks about the Objectives and Key Result (OKR) framework, which opportunities it offers and how it can be tackled best.
The most important points from the podcast summed up
- OKRs is scrum for everybody – it looks at the organization from a holistic perspective and is not only focused on projects. It is a operating system for management that creates value through better alignment and cooperation.
- OKRs consist of qualitative Objectives, which tell us where to go. Each Objective then has 3-5 quantitative Key Results, which define how to reach the goal.
- In essence the OKR framework is a new approach to set and structure goals. In doing so you focus on the customer value.
- Beyond that, OKRs are a transformation tool that helps to improve processes. This happens through the dissolving of silos and the building up of true network organizations.
- OKRs help to activate employees and give them the feeling of true impact by mving away from hierarchical goal setting.
- Instead of a pure focus on quantitative measures OKRs allow to as well question again the purpose of organizations strategies and goals.
- The OKR system how it is used at Google & Co. can usually not simply be copy pasted in european firms. Working and company cultures are different and therefore adjustments are required. Especially SMEs should pursue individualized approaches to implementing the framework.
- In most cases in needs a few cycles until the OKR system works smoothly and greater success becomes visible.
- OKRs require a new way of thinking within the organization. This change will be easier for some than for others. erfordern ein Umdenken im Unternehmen. Diese Umstellung wird einigen leichter fallen als anderen. Transformation with and through OKRs is a process that has to be trained and learned.
- With a program that precedes the OKR implementation like the 12-week Pathfinder Program from Workpath you can pave the way for cultural change and transformation for organizations. Such a program creates understanding in the organization and allows a smoother implementation with less resistance towards a new operating system.
From tool to mindset
- Expectation management is the key to success. For the implementation of the OKR method and respective tools like Workpath´s OKR software there are some important underlying principles. Namely the principles of a new working world.To this belongs securing management buy-in, a new company culture and tools with which all stakeholders can work on the new ways of thinking. This has to be clear from the beginning.
- Trainings, consulting and the right partners can help to convert OKRs into true transformation tools, so that their impact goes beyond a successful IT implementation.
The vision: How does a agile network organization look like?
- The dissolution of old structures and hierarchies allows speed and flexibility.
- Entreprise-level OKRs are published as drafts. In doing so openness towards feedback is created and the definition of goals carried out collectively.
- The enterprise-level OKRs are then “processed” in the teams so that everybody goes in the same direction and the best possible support becomes possible.
- Horizontal alignment between teams is essential. It allows to better share and reconcile goals as well as it fosters better resource allocation.
- Organisational structures in network organizations move away from organization charts and depict optimized value creation structures. This moreover allows for better exchange and transparency on an employee level.
- The connection of OKRs with traditional incentive systems usually is counterproductive and creates for example more intransparency. Other feedback and recognition mechanisms like spot or team bonuses are alternatives to individuell gratification possibilities.
How do OKRs help organizations with their transformation
- The frequency increase of goal setting and feedback cycles matches the dynamic of today’s world and helps organizations to be able to react faster. Furthermore it promotes quicker learning.
- The process of goal definition and setting is thanks to the OKR framework becoming more purpose-driven, focused and more transparent. This creates buy-in and better cooperation and collaboration on all levels.
- OKRs help to identify and dissolve inefficiencies and dependencies.