Let’s begin with an unpopular opinion when setting Objectives and Key Results (OKRs) for your company. Don’t set personal or individual OKRs!
Confused? Doubtful? Taken aback? Allow us to explain.
OKR implementation can be at various levels, but this should be taken to mean something other than that they should be set at all levels. It is conventional to think that personal OKRs must be assigned so that everyone in the company contributes to its overall objectives and success. But, setting individual OKRs can sometimes be counter-intuitive to the cause. Based on various factors specifically relating to your company, there are multiple combinations in which OKRs can be set.
This doesn’t mean that individuals must not be held accountable or that their progress and contributions must go unchecked and unnoticed. This can be done in other ways. They can be assigned weekly targets, for example. Giving KPIs is another method to monitor individual progress. However, the trick to setting OKRs is to take away the focus of OKRs given to individuals and look at how individuals contribute and collaborate to achieve their teams’ goals.
This article examines why it may work in your favor to focus on team OKRs rather than personal OKRs.
Team OKRs v/s Personal OKRs
Most companies see personal OKRs as assigning more responsibility and getting employees to take more focused action. While this may work at times, by and large, this exercise is lost on the masses. It works, for example, if the CEO is working closely with a team of high-level executives and directors and needs to assign OKRs based on their roles. Here, a CFO would understand the importance of OKRs given to them and make the required effort towards achieving the OKRs.
However, the reality is that, as OKRs filter down the organization, the importance of personal OKRs is lost. Most employees need help understanding why it’s required. If, as a matter of company policy, they’re forced to do it anyway, their goals may not bring any real value to the organization. This then adds a sense of futility to the task, and goes on and on.
This is not to say that employees should never be assigned targets or goals. This is an essential part of working in any organization. However, it makes more sense when these targets and goals are aimed at their personal development. And that’s the difference we want to highlight! When team goals are set, they are aimed towards the growth and success of the team and consequently the company. Personal goals should lead to your employee’s personal development, encouraging career growth and even more balanced personal lives.
As controversial or unpopular as our opening statement might be, setting team OKRs doesn’t translate to leaving people out of your OKR implementation process. Regarding OKR principles, setting team OKRs aims to get team members to focus their time and activities on achieving critical results.
Case Study on OKR Implementation
To further elaborate and illustrate our point, let’s consider the Sunshine Company. A company that sells various holiday options to families, with Sales and Marketing as their operations’ mainstay. They’ve been in the market for a long time, are sensitive to the changing needs, and adjust their products & services accordingly. Being in a highly competitive market, there is a strong focus on revenue. Based on their business model, it must come from the Sales teams.
In a brain-storming session with the sales team, a few issues were highlighted:
- The need for more marketing leads
- The need to upgrade existing members
- The need to maintain a minimum selling price
After identifying these issues, the teams were responsible for converting them to goals and working towards ultimately increasing the overall revenue of the company.
There are two main ways in which this could be implemented:
- By breaking down the main goals into personal OKRs
- By breaking down the main goals into team OKRs
Option 1: Focusing on Personal OKRs
Using this approach, the focus is on individual OKRs. Each team member was asked to set their own goals to contribute to the company’s overall success. Team managers, in meetings with their teams, announced the revenue goals, what was required from the sales teams to meet these revenue goals, and that each contribution was important to meet these goals.
While this adds to every individual’s sense of responsibility, it also adds to their stress, mainly because they cannot see the big picture and work towards it. The result is that they focus on their performance and what they can do to better it. Knowing that their performance will be looked at more closely, their main focus is their effort rather than their results. They think about the things they can do because this is what they have the most control over.
The unique OKRs set has yet to help the individual or the team. When a quarterly assessment is done, only a marginal improvement is seen. This is mainly because each individual focuses on their own efforts rather than considering how they can help the team. Most efforts do not convert to results leaving team members frustrated and demotivated.
Focusing on individual goals also brings selfishness to the work environment. Team members are less cooperative and more competitive. They want to ensure the best results on their own goals and are less inclined to help others.
Since the focus was on personal OKRs, no measurable or team-oriented OKRs were set. Therefore, improvement, if any, or contribution to the overall business goals goes unnoticed.
Not only does this affect the performance of the entire team, but it also affects morale and work culture. Not an approach that works!
Let’s consider the second approach to achieving the company’s overall goals.
Option 2: Focusing on Team OKRs
Here, the team leaders are aware of the overall company goal of increasing revenue and their role in achieving it.
The sales team, for example, is aware of the need to upgrade existing members and enroll new members. So, they set an objective to ‘upgrade 10% of existing members to a higher value product’. This would increase revenue, thus meeting the company’s Objective.
Key Results towards reaching this Objective would be:
- Upgrade 500 existing members from Tier 2 to Tier 1
- Upgrade 1000 existing members from Tier 3 to Tier 2
- Maintain average price of Tier 1 at $$$$$
- Maintain average price of Tier 2 at $$$$
Once these OKRs have been finalized, the team knows exactly what needs to be achieved. Every team member is clearly informed of the parameters they will operate within. And while this is a team goal, each individual has a part to play.
Although team members are aware of needing to perform at their personal best, they are also conscious of their contribution to the team. Weekly meetings are held to celebrate individual contributions and track the team’s progress. Experiences are discussed, mini-trainings are conducted, and results are shared.
Individual performances will mean little if the team fails to achieve the goals set. Decisions are made to benefit the whole team and not individual players. This makes the environment much more collaborative, and there is a willingness to help each other succeed.
At the quarterly meeting, quantified results were discussed, and progress toward the goal could also be seen. The team can see tangible results of their effort and how they contributed to the company’s revenue goal.
The success was attributed to the team, but each member felt they had made a positive impact. Also, since it was a team effort, there wasn’t one superstar team member that was relied upon. This keeps the whole team motivated, inspired, and energetic.
Lessons Learnt:
While personal OKRs and team OKRs have advantages, it is essential to know what to use them for. Here are a few takeaways from the above discussion:
Personal OKRs:
- Are best used for personal or individual career growth rather than as a tool for business growth
- Are limiting and may not do much to improve team performance
- They are a disruptive force – they may not foster collaboration and coordination and in fact may cause harmful interference in team synergy and harmony.
- Don’t always contribute to overall company goals and success strategies.
Team OKRs:
- Have greater alignment with the company’s vision, mission, and goals
- Can be very effective in helping achieve the company’s OKRs
- Directly contribute to the growth and success of the company.
- Serve to improve work culture, collaboration, and morale because they encourage team members to contribute their efforts to a more significant cause, a bigger goal.
It has been repeatedly proven that the best way forward is to learn from the mistakes others have made. Many technology giants have experimented with personal OKRs and have realized that they don’t work.
