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Good OKR
Bad OKR
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“Companies today have 21st-century
technology…
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mid-20th-century management processes… felipecastro.com
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…built atop 19th-century management
principles.”
Gary Hamel
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Henry Ford
Frederick Taylor
Gary Hamel
Management was not invented to create
adaptable, innovative and engaging organizations.
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What problem they were trying to solve?
Making people do the same thing over and over…
Scaling Repeatable Work
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Organizations started mimicking the manufacturing model.
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Strategic Objectives
Strategic Initiatives
Delivering the initiatives becomes the goal
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Teams become activity factories,
focused on deliverables.
We Are Agile!
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Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Build
Jake Knapp
Business case
?No measurement, no learning
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Did we deliver the promised benefits?
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What happens when you measure
outcomes?
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Surprise!
Most ideas fail.
Most ideas fail
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Most ideas fail: non-optimized environment
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33%
33%
33%1/3 generates positive results
1/3 generates no results
1/3 generates negative results
Source: Harvard Business Review - The Surprising Power of Online Experiments
“At Google and Bing, only about 10% to 20% of
experiments generate positive results.”
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“The vast majority of [ideas] fail in
experiments, and even experts often
misjudge which ones will pay off.”
Ron Kohavi
To succeed in an ever more digital world,
we have to reinvent how we plan and align.
A Better Way
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Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Frequent Measurement, Fast Iterations
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The Alternative is OKR
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OKR is Hard…
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Everybody Falls the First Time
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Everybody Falls the First Time
• For many orgs, OKR represents a big cultural change.
• Companies make the same mistakes over and over.
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What are the most common OKR mistakes? felipecastro.com
1. Setting bad OKRs
Mistakes: Setting Bad OKRs
• People use OKR as a to-do list.
• They create Key Results that are not measurable and impossible to track.
• They lack focus and set too many OKRs.
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If everything is a priority, nothing is.
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2. Creating OKRs in Silos
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The “tunnel & bridge problem”
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Silos
Mistakes: Creating OKRs in Silos
• Teams don’t align with each other and end up with conflicting OKRs, local optimization, and poor results.
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3. Treating OKRs as New Year’s Resolutions
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Mistakes: OKRs as New Year’s Resolutions
• Without follow-through, OKRs turn into a list of neglected and unachieved goals.
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Our Brain Focuses on the Solution
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Did it work?
We Need to Keep Score
•Objective: A memorable and qualitative description of what we want to achieve.
•Key Results: How we keep score. Describe the outcomes we want to achieve: “We will know that we are successful if those metrics improve.”
The OKR Components
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Example: OKR
•Improve Net Promoter Score from X to Y.•Increase Repurchase Rate from X to Y.•Maintain Customer Acquisition Cost under Y.
Objective: Create an Awesome Customer Experience
Key Results:
If you deliver all your tasks and
nothing improves, are you successful?
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Two Buckets
The outcomes you want to achieve.
OKRs
ActivitiesThings you are going
to do.(Outputs)
Activities: What we believe we are going to do to reach our OKR: projects, tasks, programs…
Objective: A memorable and qualitative description of what we want to achieve.
Key Results: How we keep score. Describe the outcomes we want to achieve: “We will know that we are successful if those metrics improve.”
Separating OKRs from Activities
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Park ideas here
Key ResultsMeasure outcomes: the value and the benefits you deliver to your customers or your company. They are measurable on a sliding scale.
ActivitiesAre outputs. Everything you deliver: tasks, projects, programs, features, epics and initiatives associated with achieving team or company-level OKRs. They are usually binary (done or not done).
Key Results vs. Activities
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How to Be Successful with OKR
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The OKR Cycle
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Set
Achieve
Align
The OKR Cycle: Set
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Achieve
Align
Set
Don’t wait for the perfect metric
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OKRs can be imperfect
Baby steps towards better measurement
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Bidirectional Conversations
Around the Outcomes you Want to Achieve
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The OKR Cycle: Align
Achieve
Align
Set
Creating Silos
Teams
Who manages the “white space”?
Align Around Outcomes, Not Structures
• “Focus on goals that you can control” is a terrible advice.
• It creates silos as every problem that requires cross-team coordination is stranded.
• Instead, create alignment around the outcomes you want to achieve using shared OKRs.
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Shared OKR
• Two or more individuals/teams share the same OKR.
• Each team has different activities.
• The shared OKR creates a temporary virtual team that has a joint check-in to sync progress and track results.
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The OKR Cycle: Achieve
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Achieve
Align
Set
Weekly Check-ins
Create a Follow-through Cadence
•The Check-in is a weekly ceremony for measuring OKRs and adjusting the corresponding activities.
•Adopting it is crucial to success.
•Can be merged with existing ceremonies or meetings.
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Good or Bad?
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Bad OKRs: Bad Objectives
• Proactively integrate a broad range of African perspectives into ONE’s work, align more closely with African priorities, and share and leverage ONE’s political capital to achieve specific policy changes in and toward Africa.
• Transform ACME into a company that is able to quickly and consistently introduce new business models, disruptive technologies, innovative solutions and 100% digital customer journeys.
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You are doing it wrong if…
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If you have to stop to breathe while reading
your Objective.
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If you sound like a McKinsey consultant
from the 80’s.
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Bad OKRs: Bad Objectives
• Reach 1 billion hours of watch time per day.
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Good OKRs: Good Objectives
• Make the Web as Fast as Flipping Through a Magazine (from Google in 2008).
• Delight our Customers.
• Help more people around the world.
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Bad OKRs: Non-Measurable Key Results
• Focus on hiring A player managers/ leaders.
• Provide innovative products.
• Ensure ongoing mentoring/ coaching opportunities.
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Key Results are measurable.
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“If it does not have a number,
it is not a Key Result”Marissa Mayer
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Bad OKRs: Activities as Key Results
• Implement the PayPal integration.
• Complete BlueJeans rollout to final users by end of the quarter.
• Deliver functional data marts for HR and Sales.
• Develop sales training materials for the field force.
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“Key Results must be results.”
Christina Wodtke, author, Radical Focus
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Bad OKRs: Counting Activities
• Deliver 100% of my tasks.
• Increase the number of items delivered from X to Y.
• Publish 5 articles.
• Define and measure 3 new UX metrics.
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Good OKRs: Good Key Results
• Reduce customer complaints due to product quality from X to Y.
• Reduce the number of calls to agents due to itinerary changes from X to Y.
• 75% of customers prefer our product to the competitors in blind taste test.
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OKR Coach,Partner @ Lean Performance
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linkedin.com/in/meetfelipe@meetfelipe
Felipe Castro
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