OKRs: 5 tips and 5 traps
Introduction
At Koa Health (previously known as Alpha Health) we’ve been organizing ourselves and our work around company OKRs since 2018. We just completed another iteration of OKR planning and I’d like to share some of the insights I’ve accumulated on this journey so far.
In this article, I’ll share five tips and five traps. Each of these tips and traps is based on first-hand experience with trying to do OKRs. I hope that by sharing these you won’t have to make the same mistakes that I did, and can set out on your own exciting adventure with OKRs.
Tip 1: Company OKRs need to be defined BEFORE you do team OKRs
Top-down approach:
When we did our first round of OKRs, all of the OKRs for each team were set by the strategy team and in a marathon series of team workshops, these were vetted/adjusted by the teams. All the teams “inherited” a company OKR.
What worked:
- In terms of efficiency, this worked reasonably well once the OKRs got to the teams.
- It was easy to track each company OKR because more or less each KR was assigned to a different team. (see Tip 5)
- People knew which KR they were focusing on.
What didn’t work:
- Teams didn’t feel like they had a say in defining what their OKRs were — the OKRs felt imposed rather than self-defined.
- There was still a gap in understanding between strategy and the day-to-day operational reality of what the teams were doing that wasn’t covered in the OKRs. Some of the KRs were way out of reach for certain teams.
- Not everything the teams were working on could reasonably be mapped to an OKR. This led to some confusion.
Top-down + Bottom-up approach
In our most recent iterations of doing OKRs, we started out with company OKRs defined by the strategy team. We then ran workshops with the teams to come up with their own team OKRs, using the company OKRs as the guidelines. With this approach, the teams had a lot more freedom to define their OKRs themselves. In some cases, the teams took on the company OKR for themselves.
What worked:
- The teams had a stronger sense of ownership for their OKRs.
- All company OKRs have an owner from the executive team to provide oversight on the progress of the OKR.
- While the company objectives and key results were set for the entire year, we limited the scope for the team OKRs to be a quarterly or yearly objective and quarterly key results. This is intended to build in flexibility for the teams.
- All team OKRs need to have at least one mapping to a company OKR.
What didn’t work:
- We didn’t leave the teams enough time to come up with their team OKRs. The company OKRs took longer to finalize than anticipated, and as a result the team OKR workshops were squeezed into a rather intense week of workshops. The actual workshops also were squeezed for time and many people felt the process was rushed.
- We ended up needing extra rounds of meetings to align on team OKRs shared by more than one team. Similarly we had to do some last minute negotiation between teams whose OKRs were dependent on the work of other teams.
- See Trap 1 below!
Our conclusion is that we definitely like the combination of company OKRs defined by the strategy team and team OKRs defined by the teams. Be aware that you would still need to make sure that each team OKR can be mapped to a company OKR for the team OKR to be valid.
Tip 2: Less is more when it comes to OKRs
Read any article or book about OKRs and this tip is highlighted. For instance:
“For each objective, settle on no more than five measurable, unambiguous, time-bound key results — how the objective will be attained. By definition, completion of all key results equates to the attainment of the objective.” from “Measure What Matters: OKRs: The Simple Idea that Drives 10x Growth” by John Doerr
The primary reason for limiting the key results is to maintain focus. It is also a lot easier to remember and repeat five KRs without having to look them up from a list of thirteen.
During the OKR planning process, if your team is starting to feel the pull to create more KRs stop yourselves and ask the following questions:
- Are we adding more KRs to justify work that’s already in play?
- Are we adding more KRs to account for other things that the team is working on?
- How does this KR represent a step-change improvement for this team?
- Can we reasonably pull all this off in 12 weeks?
Tip 3: The more you do them the easier it becomes
As with any new skill, the more you practice the easier it becomes. I promise you that the first few cycles of doing OKRs will be uncomfortable and that you will likely fall into some of the traps I’m writing about here. That’s OK!
The important thing to remember is to reflect and adjust not only at the end of each quarter but also at the end of each planning cycle. Don’t wait until the next cycle begins to decide how to do it differently.
Also, remember that OKRs are a means to an end. They are meant to provide a tool for you to know if you’re going to achieve your objectives or not. Waiting a whole year to figure that out puts you at risk of never getting there. Re-evaluating and adjusting every 3 months gives you room to hone the focus AND to iterate on the process.
Tip 4: Start with the end state you want to be in
“To begin with the end in mind means to start with a clear understanding of your destination. It means to know where you’re going so that you better understand where you are now and so that the steps you take are always in the right direction.”
— Stephen R. Covey
A good practice when you’re planning your OKRs is, to begin with framing the objective. In the OKR workshops I like to ask the teams to fill in the blank:
“By the end of [year] insert achievement here.” You can apply this same method when you’re doing quarterly OKR planning as well.
Try to describe that end state with as much rich detail as you can. How will things be different? What will it look like? This is where you can put on the “ambitious dreamer” hat and time travel into the future. Once you’ve done that it’s a lot easier to describe the key results you need in order to arrive at that end state.
At Koa Health, our strategy team regularly updates the strategy narrative which contextualises our upcoming objectives alongside our company vision and mission. The strategy narrative becomes the container that holds together all the company objectives in a meaningful and engaging way.
Tip 5: It’s ok for more than one team to share the same OKR
In past OKR planning iterations we quickly learned that if one team depended on another to achieve a KR, both teams had to share that KR. Otherwise, it was likely the KR wouldn’t be achieved. In practice, this is a great forcing function. It means both teams have a vested interest in the success of the KR. It has the possibility to devolve into a finger-pointing game if the KR isn’t achieved but so far that hasn’t happened. Rather, it makes real dependencies transparent to the rest of the company and generates higher interest in the delivery executive team to ensure the teams have the support they need to work together.
Here are some ways you can manage shared OKRs:
- During OKR planning make sure you have some alignment sessions between teams that share the same OKRs. You are looking for agreement on prioritisation of the KRs in both teams’ plans for the coming quarter. For example, it’s good to know upfront when key actions to achieve the KR are planned for by each team so that schedules can be aligned.
- During these alignment meetings, it’s also important to have some agreement on who owns what. Are both teams leading at the same time, or is one starting and then handing it off to another team? Now is a good time to establish a cadence by which the teams will coordinate and synchronize activities with each other.
- In your monthly progress tracking use some kind of formatting to highlight shared OKRs.
Trap 1: Team OKRs may not always sufficiently contribute to a company OKR
In the most recent OKR planning iteration, once all the team OKRs were defined I went through an exercise of mapping them back to the company OKRs. I noticed that all the company OKRs were being “fed” by a team OKR. However, because the teams didn’t assume ownership of the entire company OKR there is still a gap that needs to somehow be covered. I suspect that this is mostly due to the fact that the team OKRs only cover a quarterly result while the company OKR is for the entire year.
There are a few things you can do to mitigate this:
- Involve the executive team OKR owner in the mapping exercise.
- Revisit the gaps at subsequent quarterly team OKR planning sessions to make sure they’re accounted for.
- Consider revising the company OKR.
Trap 2: Binary OKRs are harder than you think
A binary OKR is one that can have only one of two outcomes: “achieved” or “not achieved”. One example of a binary OKR could be launching a new product or marketing campaign. If at the end of the quarter the product is not in the public’s hands, then the OKR was not achieved.
In his book “Measure What Matters: OKRs: The Simple Idea that Drives 10x Growth”, John Doerr makes a clear distinction between binary OKRs and aspirational OKRs. Binary OKRs should be seen more like commitments:
“Commitments are OKRs that we agree will be achieved, and we will be willing to adjust schedules and resources to ensure that they are delivered.”
Aspirational KRs are the ones that are “ambitious yet achievable”. They are the stretch goals that should go beyond what the team is comfortably capable of. As John Doerr writes:
“A team’s committed OKRs should credibly consume most but not all of their available resources. Their committed + aspirational OKRs should credibly consume somewhat more than their available resources. (Otherwise they’re effectively commits.)” from “Measure What Matters: OKRs: The Simple Idea that Drives 10x Growth” by John Doerr.
The trap with binary OKRs is that it is assumed upfront that the team knows exactly what it is they need to do and how to do it. There isn’t much room for discovery there. This is precisely why binary OKRs are so difficult!
Additionally, consider a situation where you have several binary OKRs happening at the same time. Which one in this instance takes precedence?
Here are some things to consider when your team is contemplating a binary OKR:
- Do we know exactly what it is we need to achieve?
- Is this OKR dependent on other teams?
- If we have more than one binary OKR do we know which one is the most important?
- What end state will we achieve by doing this binary OKR? — Hint: maybe describing that end state will lead you to a more aspirational OKR instead!
Trap 3: Tracking progress doesn’t just happen at the end of the quarter
Following on from Tip 3 above, you certainly don’t want to wait a whole year to know if you hit an objective or not. You need shorter feedback loops — quarterly for example — that give you an indication if you’re on the right track or not.
The same applies to quarterly OKRs. Don’t wait 3 months to assess where you are, try monthly or even weekly. Things change so quickly that you may find one month into a quarter that one of your OKRs already doesn’t make any sense.
When we review our monthly OKR progress we do the following:
- Ask the teams to grade their OKRs in terms of %complete + confidence rating (red/amber/green) of achieving the OKR by the end of the quarter.
- The team scores are then rolled up to the company OKRs that they map to and we have a better picture of what is on track and what is at risk.
- Our strategy and delivery teams then decide how to adjust to ensure we meet the objectives.
- Additionally, most of our teams are tracking their OKRs progress weekly. They frequently use them to inform their planning cycles.
At Koa Health we use a googlesheet to track progress on quarterly team OKRs. There are, of course, a plethora of OKR tools out there. If you’re starting out from the beginning though I advise you to keep things simple and use a spreadsheet. Once the OKR practice is more embedded you can then go into your tool purchase with more of an idea about what you want. Alternatively, quite a few tool dealers also provide OKR coaching support and guidance.
Here are a few tool providers I’ve come across that look interesting:
Trap 4: Don’t confuse key actions for key results
Time and time again, we have struggled with differentiating between what is a key result and what is a key action. One way to do this is by remembering that key results describe the outcomes while key actions are the activities you will carry out in order to achieve that outcome.
Another way to make this differentiation clearer is to think of each key action as a mini-experiment. For example:
“We believe that by doing X [key action] we will achieve Y [key result].”
One of the product managers at Koa Health uses hypotheses to identify possible key actions that could affect a KR.
If you are still struggling, go back to the objective and break it down into the things you need (results) in order to prove that you have achieved that objective.
Trap 5: Everything you do doesn’t have to be covered by an OKR
In the most recent round of OKR planning, I encountered several instances of teams creating key results to reflect each one of their ongoing activities. Some of these were easily converted into key actions. Others, I advised that they drop them from the KRs completely.
It’s assumed that there will always be “business as usual” activities that simply have to happen. These don’t need to be covered by an OKR. In fact, doing so is a smell that your team is working *for* the OKRs rather than the OKRs working for the team. OKRs are just one way to enable teams to orient themselves around objectives. They are not meant to justify all the work you may be doing.
So when should you make something a KR?
- When there is a clear link between the result and a company or team objective.
- When the result will introduce a step change in terms of productivity, efficiency, etc.
Summary
For as many iterations as we do OKRs I am sure I will be discovering more tips and traps. I hope these first five help you on your journey.
In the meantime, here’s a question for you:
