Build 54 - avoiding OKR fails
Hey there,
It’s Wednesday so time for this week’s Build newsletter for founders.
A couple of years ago I was being asked to do a lot of work to help founders with objectives / key results (OKRs).
That led me to investing my own time and money in becoming a Workboard accredited OKR coach.
And what I learnt on that course led me to question the value of OKRs in the founder-led growing businesses that I work with. I'm sure that wasn't their goal with the course though.
If we zoom out a little, it’s worth remember that OKRs are a tool to achieve alignment and cadence in a business.
In theory they help manage the tension between a top-down direction for the business and enabling autonomy for individuals and teams to align their work with that centrally set direction.
I’ll say this now: OKRs are only a tool, they’re not a solution to achieving alignment.
And they’re not the only tool for achieving that alignment either.
I’ve seen a lot of OKR implementations that look OK superficially, but aren’t actually achieving that much.
Why OKRs can fail in start-ups
For founders at start-up or early scaling phase, rapidly evolving priorities are the biggest source of OKR disruption I see.
One month you’re super focused on user acquisition. The next, you need to pivot an entire business model after an unexpected bomb drops.
What’s going on here is a misalignment between the pace of the business and the quarterly OKR cadence.
Priorities shift rapidly, so the OKRs and quarterly goals get irrelevant too quickly and are disconnected from the founder’s priorities.
Teams end up constantly pivoting to work on initiatives that weren’t captured in the original OKRs.
Organisational immaturity is also a typical characteristic in those early phases. Teams are in constant flux - expanding, reorganising and firefighting. The effort needed to properly cascade, track and evaluate OKRs across the entire company often exceeds the benefit they give.
Amongst the day-to-day chaos that most start-ups have, it’s understandable that OKRs easily get deprioritised.
They never get tightly operationalised into clear processes and responsibilities, because that’s not what the start-up needs at that stage.
There also a more human point about why start-ups shouldn’t be using OKRs.
As a founder you’ll tend to push your teams hard. OKRs can add unrealistic stretch goals into teams that are already on the edge of what they can cope with.
Why OKRs can fail in scale-ups
For founders entering a scaling phase, I’d advise you to be on the lookout for some different OKR pitfalls.
With bigger teams and more established processes, your main issue is likely to be goal proliferation.
Under a “textbook” OKR implementation, you’ll find that OKRs and goals multiply into a quagmire of objectives. Often the focus is disconnected from your make-or-break priorities as a founder.
I’ve seen teams get caught up chasing metrics that look impressive in theory but don’t actually move the needle on the few things that matter most for growth.
This misalignment stops your teams concentrating enough energy on priorities - it’s a classic “busy work” error.
Short sighted execution of OKRs can also be an issue. That’s when your teams become so fixated on checking boxes off for their OKRs that they miss the emerging signals that their chosen approach is failing.
These might be things like changing customer needs, a shift in the competitive landscape or just plainly implementing the wrong thing.
How to get cadence and alignment right
In my work helping founders steer their businesses, here are my top three alternative approaches I’ve helped people succeed with:
- Quarterly priorities: Rather than getting bogged down in cascaded OKRs and metrics, simply defining and aligning the entire company around two or three clear priorities each quarter.
Leaders can help by showing how these priorities are relevant to their teams, while recognising that not everything can be a priority all the time.
This works if the founder or leadership team knows and can articulate the small number mission-critical things that need to be done that quarter.
- Strategy roadmaps: I’ve helped founders with clear strategic thinking build roadmaps that visually map how each team’s projects and workstreams roll up to the high-level strategic objectives over time.
It’s clear, focussed and nicely timebound.
My preferred approach is a 12 or 24 month roadmap with either one or three month increments, depending on the pace of the business.
- Mission metrics: Another approach I’ve had some success with is to define and align around a small set of high-level mission metrics for the entire business to get behind.
Teams then plan what they can do to shift those metrics.
This works best in operationally simpler businesses where there’s a clear line of sight between the metrics and the work of each team. Where this link isn’t clear, this approach goes a bit pear shaped.
The key thing I work on with founders is finding a goal-setting approach that balances focus and alignment with the operational flexibility to capitalise on opportunities.
The approach has got to be right for that business, the founder and the maturity of the organisation.
Phew. That felt like a cathartic article to get out there.
I hope it was useful and remember I’m always available to chat through this stuff and share my experiences freely. Just hit reply.
Until next week…
best regards,
-sw
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