OKRs

5 Reasons behind OKR Failure Your Boss Wants To Know

By on December 13, 2016

OKRs as a goal-setting framework has gained popularity in recent years. Many large companies such as Google, LinkedIn, Zynga, Sears, etc. have implemented it successfully.  Naturally, other companies are following suit. Most of these achieved greater levels of success after implementing OKRs in their organization. Though some have failed to capitalize.

Rick Klau’s seminar on OKRs provides comprehensive step-by-step guidance on OKR adoption. He talks about how aligning objectives at the company, team & individual level drives a unity of purpose. While in principle, OKRs are supposed to be easy to implement there can be challenges while implementing them.

Contactually (famously) saw their OKRs fail, as their ambitious goals for implementing OKRs turned out to be a nightmare. Given the stage at which the company was, they needed a quicker iterations cycle as opposed to locked-in OKRs.

OKRs fail. There are several factors that drive the success or failure of a team. We studied a few failures and listed down the most common reasons. At the end of the day though, one must realize a framework is as good as the people that are using it.

Half-hearted commitment to the idea

Usually, the decision to adopt the OKR process is taken by the executive level. Obviously, they are most excited about implementing them. With its proven track record for Google, Intel, etc, OKRs are expected to bring about a dramatic change in the goal-setting process. Not an unfair assumption. The problem here is that only the top management can visualize the benefits.

Regardless of the number of innovative approaches any company might take, its employees need to be fully committed to its objectives and key results. Otherwise, the management will not be able to reap its benefits.

Solution:

Educate all the managers and employees on how OKRs can help improve their performance and productivity. Show them how team OKRs can not only beneficial for the company but their personal & professional growth as well.

Not setting Stretch goals:

According to the Stretch goals definition, you need to stretch yourself beyond what your mind might think is safe. Similarly, to implement OKRs, your goals should be difficult to achieve and push you out of your comfort zone.  You are said to be successful if you can achieve 60% to 70% of your goals. On the other hand, if you can achieve 100% of the target then it means that your goals weren’t ambitious enough.  You didn’t stretch yourself.

Organizations that fail to set aspirational, stretch goals do not have the potential to break free from stagnancy and achieve excellence.

Solution:

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Google sets quarterly OKRs that are very difficult to attain. Teams and individuals are measured by how close they came to achieving them. They believe in setting stretch goals where “achieving 65% of the impossible is better than 100% of the ordinary”.

Though care should be taken that goals are not set too high as it can lead to demotivation, excessive risk-taking, or unethical behavior.

Not keeping track regularly:

It is easy to lose focus despite having everyone’s OKRs defined. Managers need to ideally step in and check their team’s progress at regular intervals. Failure to do so has often led to finding out that much that was expected has not been done. Thus the entire process falls grossly behind schedule.

Solution;

According to Jeff Weiner of LinkedIn, it is wise to conduct weekly meetings. Each individual begins with reporting ‘one’ personal victory thus starting the meeting on a positive note. Also, guidance is provided to anyone facing difficulties.

Incorrect alignment:

Companies that follow a top-down cascading approach do not take employee opinion into consideration. Top management dictates goals to the middle management which in turn dictates them to all its team members. Thus employees do not feel any sense of accountability. The feeling is that they are primarily working towards the completion of their immediate manager’s goals. While OKR methodology may have been used here, it will not be effective for the company.

Solution:

Management needs to follow 2-way communication where employees too can contribute ideas while setting OKRs. The ideal ratio is 40-60 percent of the contribution. One of the key recommendations of OKRs is the alignment of objectives at different levels.

Upon completion, align individual goals to team goals and subsequently to overall company objectives.

Lack of proper tools:

The complexity of managing OKRs can be quite overwhelming. One reason is making use of spreadsheets to keep track of them, which is exactly what Contactually did. Management has to spend a lot of time and effort to manage such huge volumes. Companies that started on the right note have abandoned OKRs because they were not able to efficiently use them.

Solution:

There are many OKR software available in the market that help the management to efficiently carry out OKRs in the organization. All the hassles involved with spreadsheets go away.  Thus managers can focus on efficiently tracking, measuring, and reporting OKRs at all levels. It is important to look for a few must-have features in OKR software to make sure that you have all the right facilities at your disposal.

Have you experienced OKR failures at your workplace? What were the main reasons – let us know in the comments.

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