Making OKRs Lean Again - Final Part
Welcome back to the final installment of Dave’s story. Dave and his company experienced quite a few ups and downs when it came to OKRs. A lot of the challenges could have been avoided if they had put their OKRs on a diet (or what I like to call Lean OKRs).
Dave’s story isn’t all bad. There is one aspect of the story that I do like. I like the data-driven angle of Dave in this story: HR used measurements and information to initiate an organizational change. However, it’s based on the wrong assumption. Improved alignment, focus and engagement are how OKRs got sold by many consultants, but that is not the problem OKRs are trying to solve! These things are side-effects of proper goal-setting. There are many other ways to set goals on engagement, alignment and focus. Why not set SMART goals instead? Don’t bother then with using a tough-to-get-right framework like OKRs. Instead, ask this question: Why is the organization struggling to get alignment amongst teams and leaders in the first place? What is the core issue going on here?
In Dave’s story, it was Dave himself that initiated the change. However, this trigger can also come from different department managers as a reaction to low team morale, low-performing software teams, part of a framework like SAFe, or growth hackers that heard about them. It really doesn’t matter. OKRs won’t help you to fix these issues. They are all the wrong incentives to start using OKRs. Why? Because OKRs are created by and for B2C tech companies to execute ambitious strategies by empowering high-performing teams to work on hard problems. You are probably not that kind of company (just yet - maybe one day you will be and when that day comes, when you need a framework to achieve your moonshots, OKRs will be waiting!). That doesn’t mean OKRs cannot work for your company, but you need to put in a lot of effort to get some results.
You’ve probably spotted a lot of waste in Dave’s story that lead to the following symptoms: low employee engagement, overburdened people, lack of focus, context switching, too many conflicting priorities, a large inventory of goals (all they did was transform existing measurements and goals into a new format), a bloated goal-setting process. Don’t fight these symptoms, instead, get to the root of the problem. In the end, Dave’s company didn’t change and they didn’t benefit from OKRs at all. The side effect being that OKRs have gotten a bad rap because the intentions of working with them were misaligned to where OKRs really shine. Instead of piling goals on top of goals, we need to put OKRs on a diet. What if we apply Lean thinking principles to OKRs? We could make OKRs Lean again!
Lean OKRs - The foundation
It starts by understanding your strategy. There are many different strategies within a company. If you are small, you probably only have a company strategy. If you are bigger, you can have a strategy for your product(s). Having a strategy is key, without it, OKRs just won’t work! Then you need to think about what part of your strategy requires a radical improvement (we call this Kaikaku in Lean), a goal that requires a change in human behavior.
For B2C SaaS companies, to grow your company, you probably require different customer behavior. For example, to increase LTV, you need to make sure customers engage with your app more actively, or move them from a freemium to a paid subscription. Your product teams can then set OKRs to focus on these challenges. This is the preferred model.
For other companies, especially enterprise companies, using OKRs is even harder. Most of the time, teams are far away from the customers. But you are not entirely doomed. Instead, leaders in these companies can focus on an internal behavior change. For example, using internal APIs, improving how leaders communicate strategy, greeting customers in a different way, proactively reducing manual tasks, seeking feedback from customers, etc). OKRs are now used for Organizational Change, which requires a different approach, and could, with some strategic thinking, help to build modern product teams. Understanding the difference between the two is key. It doesn’t matter which company you’re in, OKRs are about solving hard problems. They are about changing human behavior.
The thing is this: If you need to execute a very ambitious strategy, then behavior change is part of that. Behavior change is hard and takes time. Have you ever tried to change your own behavior? Then try changing the behavior of your team or a whole group of customers. It now becomes even harder. It requires focus, dedication and accountability. At the same time, people have other stuff to do. “Business as usual” is the biggest enemy of OKRs. It is why companies and teams can focus on only ONE OKR at a time. On a company level AND on the team level. Cut down department OKRs or any OKR layer. Don’t use your organizational chart to set OKRs. It just makes everything more complex (there are some exceptions when you are a very big company, but I won’t go into details here). Instead, foster cross-departmental team collaboration and alignment. Let senior leaders plot a strategy for achieving the company-level OKRs. Let them define draft Objectives for their teams or let senior products teams swarm around the company OKR themselves. Let leaders fight on priorities and conflicting Objectives before the next cycle starts. Then they need to bring strategic context or their intent to their teams and collaborate with them on defining measurable key results (preferably focused on outcomes) and challenge them on their ambition level. OKRs are very ambitious goals. You always stop at the team level, not the individual level. They are a team sport. You cannot win the World Cup in soccer by yourself. You need a team.
Install a lightweight process
Next, you install a lightweight system to achieve the team goals. A system that is easy for everybody to adopt and can fold into existing ways of working (e.g. Scrum). That system is called the OKR cycle, and without it, OKRs won’t work! It’s the operating system to achieve bold goals and continuous organizational change.
The default Lean OKRs cycle is 90 days. It gives you and your teams enough time to make those behavior changes and build new habits. To stay accountable and measure progress, you need to check in on your OKRs every week. Look at the latest data, define obstacles and run experiments to remove them.
Mindset
It is this “scientific thinking” that will help your teams to move the needle on hard goals. It is “scientific thinking” that will create innovation, by letting the people close to the technology (and your customers!) solve hard problems. Can you teach your teams these skills? You should! Coach them. In the realm of Modern Product Development, teams and their managers use “scientific thinking” to explore and develop hypotheses to test. They have a whole arsenal of methods and techniques they can use to move the needle. And they have built the skills to run small experiments and to do so fast. Multiple per week even. If you want to use OKRs, your product team needs to master these skills. It’s not enough to convert existing goals and KPIs into OKRs and then tell everybody that you are “doing OKRs”. It’s not enough to ask people to work on a hard problem without the knowledge and expertise to do so. It’s not enough to only ship features to your customers. Probably half of them aren’t going to move the needle on your goals anyway (as Marty Cagan once said).
OKRs can look simple (and they are), however, it’s very hard to do them right. It requires slowing down first, changing people’s way of working. It requires people to think about problems to solve, to radically focus on one problem at a time, making tough decisions, fighting over priorities (and compromising), achieving consensus amongst leaders, behaviors to change, understanding that product teams will use OKRs differently than the rest of your organization, building strong data literacy, hiring strong leaders that are willing to coach people and empower teams, and having one-on-one’s every now and then. This stuff isn’t easy and it’s not for everyone. Are you prepared to change your way of working?
You have two choices when it comes to implementing OKRs. One, you use the OKR format to set your goals (you’ll reap some benefits, but not more than you would using SMART goals). Or, you use the Lean OKR approach I just explained to boost company and team performance to the next level.
How can we make OKRs lean again?
Here are three easy steps to make your OKRs Lean, which you can start implementing today!
In the next cycle, focus on ONE OKR per team at a time. Use strategic thinking. Focus on behavior change. Battle it out! Pick one high-performing team to start with.
Install a lightweight process to achieve your OKRs. Based on Plan, Do, Check, Act. Study and try scientific thinking with your team. Toyota Kata is a great resource to start.
Mindset. Teach and practice scientific thinking.
And with that, we wrap up our fictional character Dave’s story. For some people, this story isn’t too far off from real life. If you would like to know more about Lean OKRs, you can order my book “Moving the Needle with Lean OKRs” or you can contact me. I offer a free OKR discovery call for those that are ready to roll up their sleeves and get started with Lean OKRs within their company or organization.
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