OKRs and the lucrative business of manufacturing complexity
Almost five years ago, I was introduced to a new goal setting framework called OKRs. At the time, I worked for a 150-person company, and the CEO (who is currently my boss at an entirely different company, so I should probably be nice) introduced the idea to the entire company with this video:
We committed to doing this for the upcoming quarter. It took some time to explain the difference between objectives and key results in the weekly team meeting. Over the next couple weeks, the Confluence OKRs page slowly started to fill out with 3–4 OKRs from each person inside the company. I participated but got the impression that this new goal-setting system was a bit difficult to understand.
I remember reading through the publicly listed goals in Confluence — I started looking at the leadership team’s OKRs and immediately thought, “ok, this is pretty useful.” It was extremely helpful to have visibility into what the exec team cared about and was focusing on for the next few months.
Then, I saw the rest of the OKRs and my mind changed on the usefulness of them. First, it was obvious that there was confusion around the objectives and key results. Secondly, it was obvious that some people couldn’t care less about this process and were sandbagging their goals.
If you aren’t familiar, a key tenant of OKRs is that 1.) they shouldn’t be tied to compensation and 2.) they should be aspirational, because…Google did it that way and if you shoot for the moon…you will at least land in the stars!
I’m not sure what the exact reasons were at the time, but the OKR-setting process didn’t exactly take off inside the organization. Keep in mind, this was a group of people who were pretty involved in their work; it was one of the best places I ever worked (with great leadership too), so I discounted the entire idea of OKRS as a practice that can work inside certain organizations but is not a panacea for all.
The business of creating complexity
Fast-forward a few years. As I’ve been building Friday Feedback, I’ve seen the popularity of OKRs continue to grow, in part by HR 2.0 software vendors who love to sell the newest, greatest fad to “people operations teams”, which is just Silicon-Valley speak for an HR department who wants to ditch the negative HR association (and do less compliance work). In addition, there have been multiple books written on the topic of OKRs.
In virtually every scenario I’ve seen, these HR vendors will offer a goal setting feature and then instantly proceed to hire customer success reps, bundling this feature in an enterprise package. I can understand their reasoning, especially after my experience at a previous company; implementing a system like OKRs is not easy, even when you have buy-in. You need a dedicated group of people to ram it throughout the organization and make sure it sticks!
As I watched from the sidelines, I discounted the entire notion of OKRs and came to the conclusion that the vendors and consultants were creating complexity as a means to sell a product or service, while also creating complexity for themselves at the same time (which is ironic and funny).
As I thought about the uselessness of OKRs, I spent some time digging into other goal-setting frameworks that have existed for decades, specifically SMART goals. For those who are unaware of SMART goals, they are:
This framework was introduced by George Doran in 1981 in the following paper. As I read the article, I was drawn to this part:
It should also be understood that the suggested acronym doesn’t mean that every objective written will have all five criteria. However, the closer we get to the SMART criteria as our guideline, the smarter our objectives will be.
I found this fascinating, not because I love SMART goals, but because Doran viewed his own advice as a guideline, not a law.
Consider this — many people who use (and sell) SMART goals are much more dogmatic about it than the person who came up with the idea.
As I read this article, I wondered if this was true of OKRs as well.
The introduction of OKRs
Andy Grove (former CEO of Intel for ~ 30 years) is credited with introducing the notion of OKRs. In 1981, he also happened to write what I consider to be the best management book I’ve ever read — High Output Management.
In chapter 6, Grove talks about planning, which is when he introduces OKRs. I expected a chapter (or more) dedicated to covering this topic. I guess I’ve watched too many OKR explainer videos that run on and on.
In a 230 page book, Grove introduced the idea in less than two pages (110–111 if you want to see for yourself) and then includes a couple more pages giving examples of OKRs in practice. I’ve included a few key parts below:
A successful MBO system needs only to answer two questions:
- Where do I want to go? (the answer provides the objective)
- How will I pace myself to see if I am getting there? (the answer gives us milestones, or key results)
To illustrate an objective and a key result, consider the following: I want to go to the airport to catch a plane in an hour. That is my objective. I know that I must drive through towns A, B,C on my way there. My key results become reaching A, B, and C in 10, 20, and 30 minutes respectively. If I have been driving for 20 minutes and haven’t yet made town A, I know I’m lost. Unless I get off the highway and ask someone for directions, I probably won’t make my flight.
Think about this for a minute. The person who came up with OKRs wrote 3–4 pages about it in a 230-page book, and today, there are dedicated books (320 pages!) on the topic.
This is pretty much identical to what happened with SMART goals. The author makes a recommendation, and people treat it as a religion that must be followed.
After reading this, I realized this is why OKRs flopped at the company I used to work at. The OKRs we tried to implement had not been stress-tested in the real world.
Just because Google had success with a particular way of doing things doesn’t mean that it’s easy for other organizations to understand and implement.
Creating complexity is a lucrative business
At this point, I’d like to state what is probably obvious to you. There is a lot of money to be made by creating complexity, especially in the area of business/management.
You can’t charge consulting fees by telling people things they already know in a simplified way. You must act smarter, more educated, and more enlightened, even if that means you limit your effectiveness because people don’t understand what you are saying. You are still getting paid.
I find this to be sad. There is value in setting goals. There is value in pursuing mechanisms to align a group of people.
If you are still interested in implementing OKRs, I’d like to suggest the following tips:
- Answer the questions, where do I want to go? How will I pace myself to make sure I get there?
- Intentionally limit OKRs as a means of focusing on the most important challenges.
- Share them across the organization
- Find a cadence that works for your team/company (monthly, quarterly, etc)
Watch out for people who like to overcomplicate things, especially when their success is based around it.