This article might make it sound like I hate OKRs, but I am actually a really big fan. You could call me an OKR nerd, relying on them heavily for work as a Product Manager for Nordstrom’s digital business, AND making them outside of work in an effort to try to corral my hopes and dreams into actionable goals.
So what are OKRs?
OKRs first popped up in the 1970s and Andy Grove at Intel gets the credit for creating the framework.
OKR stands for Objectives and Key Results. They are a goal setting framework that many companies use to define objectives (ideally between 3 and 5 of them), and then 3 - 5 key results for each of those objectives. Generally OKRs are defined over a certain time frame, for example I make my own OKRs for a quarter (3 months) at a time.
OKRs should generally follow the SMART format (specific, measurable, achievable, relevant, and time bound) to make them as action oriented as possible.
OKRs are awesome, they have significantly helped me accomplish what I set out to accomplish at the beginning of the year, and I believe they make many organizations more and more successful. But boy, can they go sideways.
Here are three things I’ve seen go wrong with OKRs as a Product Manager, and how you can work to counteract these issues.
Problem 1: OKRs don't cascade down correctly, or sometimes at all
OKRs do an incredible job of creating alignment in an organization. Think about a 1000 person company. Ideally OKRs would start from the very top. The president of company x sits down, and they write out 3 big audacious objectives that would be incredible to accomplish by the end of the quarter. For each of those objectives, this CEO supports each one with 3 key results.
With that clarified, this CEO presents those OKRs to the folks on his or her executive team. Now each one of those team members makes three to five more objectives, and supports each of them with 3-5 key results.
For example if one of the CEOs goals is to grow the business by 50%, and a key result is to double the size of the sales team, then the VP of sales is going to have multiple objectives all focused on growing the sales team.
That goes all the way down the pyramid, ideally all the way to the intern who just started.
HOWEVER, many times in practice this doesn’t actually happen. I’ve personally seen many times when OKRs have not been clarified at higher levels in the organizational hierarchy and instead OKRs are created first at the lower levels of the organization. I am 100% supportive of the servant leadership methodology, believing that the people closest to the problem will have the best insights about how to solve it, BUT I also know that if everyone at the bottom levels of a massive company go off and make their own OKRs, everyone will be swimming in different directions.
How to solve it
The only real way to solve this problem is through advocacy. Escalate to your leaders that this is happening and that more guidance is needed around targets. If that falls on deaf ears, take matters into your own hands. Start to meet up with Product Managers and other leaders around the organization to compare planning efforts. Ideally review OKRs and adjust accordingly to support likeminded efforts. If there isn’t a standard way of organizing the Product Managers across an organization, consider making a Product Management guild that can help facilitate things like this.
Problem 2: OKRs can be subjective
The very foundation of OKRs was built around SMART goals.
As defined earlier in this article, the very first criteria for a goal to be considered a “SMART” goal is “S” which stands for “specific”, and the second is that they must be M for measurable”. Oftentimes when creating OKRs, we can forget about their “SMART” origins. Many objectives can be wishy washy, OR worse, influenced by feeling. It is important to tie emotion to goals, but emotions can also lead us astray. If across the organization, everyone is reviewing how they did on their OKRs last quarter, people can often take a trip to spin city. When someone visits spin city, they are actively painting the picture of a story that may not match reality. They are “spinning” reality. This is considerably easier to do when your objective is subjective. Having as honest of a discussion as possible around how you or your team performed against the OKRs you targeted at the beginning of the quarter can be one of the best possible things you can do to grow the business, and grow your team's capabilities.
How to solve it:
Getting others in the organization to review your OKRs can be beneficial in multiple ways. Of course, per the first problem many teams face, this review can increase alignment in the organization. A second big benefit is that it can provide feedback about the quality of your OKRs. Oftentimes people make OKRs but don’t realize how subjective they are being, or how much room you are leaving things for interpretation. Having a second set of eyes can really prevent this.
Additionally, you could think about having some sort of checklist. Specifically comparing your OKRs once complete to the SMART framework can push your OKRs from good to great, or help you tweak them so that they can be measured easier.
Problem 3: They don't take the right balance of too aggressive or too conservative
As a company, Google uses OKRs a lot. One of the key beliefs with google OKRs is that when grading your OKRs at the end of the quarter, it is better to undershoot than to overshoot. For example Google (and I) grade our OKRs on a scale of 0.0 - 1.0. Generally a score of 0.6 or 0.7 at the end of a quarter is GOOD! You don’t want to get a 1.0, that means that you were not aggressive enough in setting your OKRs. And you don’t want to get a 0.0 or a 0.1 because that means that you were too tough.
The problems come in when you are outside of that sweet spot. Constantly getting a 1 or above and knocking your OKRs out of the park every quarter means that you are not setting them high enough. Over time this can reduce the effectiveness of OKRs for the team or organization. If everyone is striving to completely hit their OKR objectives and the company incentivizes that, people will start setting lower and lower objectives.
However you can swing the pendulum too far. Let’s say your team continuously sets incredibly aggressive OKRs, and you continuously score below a 0.3. Imagine how demotivating that would be over time to you or your team! OKRs as a demotivator would be the last possible thing that we are trying to do when building goals.
How to solve it:
I’m a believer that tracking the data can solve this problem and put you or your team in the sweet spot for OKRs. Sure, if you are brand new to OKRs you may not really know where to begin. Take your best shot and try to make your very measurable goals attainable but also aggressive.
Then, track the data! Understand how many of whatever action you want to take, or how much revenue you are driving, or whatever else your metric of choice should be. But track this and really dig into what your baseline generally is. Once you’ve got a baseline in place, you can use that to build more and more actionable OKRs.
OKRs are an incredible tool when used right. If you don’t use them today, start! If you do use them, keep an eye out for these three very common pitfalls, and try to improve on them!
About the author:
Ben Staples has over 7 years of product management and product marketing eCommerce experience. He is currently employed at Nordstrom as a Senior Product Manager responsible for their product pages on Nordstrom.com. Previously, Ben was a Senior Product Manager for Trunk Club responsible for their iOS and Android apps. Ben started his Product career as a Product Manager for Vistaprint where he was responsible for their cart and Checkout experiences. Before leaving Vistaprint, Ben founded the Vistaprint Product Management guild with over 40 members. Learn more at www.Ben-Staples.com
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