I’ve had dozens of conversations with users of OKRs from the
land down under. However, my current project with the team at *
Hipages,
represents my first opportunity to work with an organization that is fairly
mature in their use of OKRs in Australia.
Hipages has used OKRs for well over a
year and they've adjusted and refined their approach to OKRs several times. Though they can be painful at times, these iterations reflect an
essential skill for any organization seeking to deploy OKRs. This skill is Hipages’ leadership culture of continuous, reflective learning that enables them to
quickly refine and shape their OKRs model to best work for their organization.
Hipages' high level of questioning inspired me to share some highlights from our conversations thus far. This post explores the level at which to set OKRs and the ideal number of OKRs
to define for a given level. I hope these questions and my brief comments resonate
with anyone seeking to shape their OKRs program.
At what level/s in
the organization shall OKRs be defined?
Like many organizations, Hipages tried setting up OKRs at the
individual level. For a complete analysis of the pros and cons of setting OKRs
at the individual level, I refer you
Objectives
and Key Results, the book I recently co-authored with Paul Niven. The cons mentioned in our book include:
- Reduced engagement: OKRs may be viewed
by some as yet another corporate-imposed compliance tool that increases complexity
and leaves even less time to get things done.
- Confusion around variable compensation:
Should your organization utilize a separate incentive compensation system that
does not link to OKRs, employees may be confused as to why two separate systems
exists (OKRs and incentive compensation).
- Lack of teamwork: Individuals may focus
too much on their own OKRs rather than the team-level OKRs.
- OKRs that resemble a to-do list: Effective
OKRs focus on results, not tasks. However, when creating OKRs at the individual
level, there is often the temptation to include job-related tasks that, while
important for the individual, may not contribute to overall strategy execution.
- No value-add: Some teams will likely
already have the equivalent of an OKR system in place at the individual level.
For example, a call-center team with a staff of a hundred telemarketers
probably already has a call-center tracking system in place that provides
real-time feedback to every employee. Asking each telemarketer to also write
down OKRs and update the metrics could be redundant and simply a waste of time.
Again, for a more complete analysis of the pros and
cons of setting OKRs at the individual level, please review
our
book. I feel a bit negative about individual-level OKRs today, so I’m only listing the cons. I am inclined to promote our OKRs book given that today’s publishing business seems
to position Paul and I, the authors, as only ones promoting it!
After trying individual-level OKRs, Hipages decided to step
back and develop OKRs at higher levels rather than at the individual level.
And, rather than defining OKRs for every team in the org chart, they took a
novel approach. They are currently setting OKRs at the “Focus Team” level. A “Focus
Team” is a cross-functional team dedicated to a certain component of the
overall business. This is analogous to the “Squad” model that Marty Cagan
describes in
Radical
Focus, a must-read book for anyone deploying OKRs by my colleague, Christina
Wodtke. I’ve seen the squad model work quite well at several organizations
including eBay. And yes, Paul and I talk about this in our book as well. That's the 3rd plug for our book. Wow!
How many OKRs shall
we have?
One executive at Hipages asked me, “Should we have a small set
of OKRs focused on the most critical issues for the quarter or shall we have
OKRs that go across greater sections of the business?” He went on to note that,
“We’ve varied between the two approaches; we’ve tried broad OKRs across many
aspects of the business and also tried a single OKR. We see benefits in both models,
but we’re interested in your views on this.”
But, like any great executive, he went on to effectively
answer his question by noting that, “…the iteration for this quarter feels best
in that we have broad set of OKRs for the business at the moment based on focus
teams rather than traditional teams.” My views on the number of OKRs you should have cannot be stated
in a single sentence. You can see a bit of my thinking on the number of OKRs in
my
2x2
matrix post on getting started with OKRs as well as my slightly
controversial post
“How
many OKRs should you REALLY have?”
I envy the Radical Focus model which simply declares “define
a single OKR.” The idea of a single OKR is quite simple and appealing. My
objection to a single-OKR approach is that it doesn’t always feel like the
right solution.** However, let’s explore where a single OKR really does feel
like the right approach. One OKR seems to work well when…
- When the primary intention of introducing OKRs
is to increase focus
- When a team (such as Legal or Finance) reports
that almost everything they do is “business as usual” and reactive rather than
proactive.
- Your company is really small and we can leverage
a single OKR at the top-level to enable clear communication of the most
important priority for the current quarter
If you decide to use two or more OKRs, I advise listing the OKRs in order of priority. And, if nothing else, choose one OKR that is the
highest priority and then define other OKRs as “also important.” I've heard from many of my clients that the exercise of simply agreeing on which OKR is most important creates more focus and alignment.
If this brief Q&A piques your interest, please share
your story. We’d love to hear about how you’ve adapted OKRs to work for your
organization.
Better yet, if you’re charged with deploying OKRs at your
organization and want help now, please request a private call with me. I’m
happy to work with you to quickly explore how OKRs can work most effectively at
your organization.
* Here's a company blurb from Hipages
Today, we’re transforming the way people get things done
around their place. Founded in a garage by two great mates with a big idea, we’ve grown by using
leading technology to change the way Australians sort out everything – from
basic repairs to those big reno projects.
But while we’ve made things simpler and speedier, some things never change –
like a good chat, a real relationship and a friendly face. Deep down, we’re a
place that connects all kinds of great people, with all kinds of great tradies.
Because at the end of the day, we’re a company of Australians helping other
Australians get things done – and done right. (And with 1.5 million visitors to our sites every month, there’s a lot to get done.)
**By the way, Christina and I are on the same page
here. The basic principle is “less is more.” If you can make a single OKR work,
that’s definitely better than having a massive set of 7 OKRs!
