As software companies begin to mature after achieving product-market fit, the need to become more operationally mature starts to become evident. In the good ole’ days, the executives knew everything going on within the business, and updates were just a Slack message or a meeting away. Once the business starts to grow beyond 50, 75, 100 people, visibility gets lost and uncertainty creeps in.
The reaction to this situation is often more oversight, more meetings, and more procedures. The gunslinging ways of yesterday which led to growth start to get more rigid, formalized, and structured. What’s ahead is a critical crossroads for so many businesses, and the decisions made in this phase can determine the level of success going forward. Although any implemented improvements in organizational operations are well intended, the bigger challenges still remain and become compounded with growth. Questions arise. How can I ensure that all my resources are working on the right things and driving the right results? How can we focus and prioritize in a way which will ultimately make a positive impact to the handful of critical business metrics that actually matter (revenue, churn, profitability, etc.)?
How the Decision for OKRs is Made
The decision to implement OKRs (Objectives & Key Results) is a common move when these questions come up. Typically someone at the executive or board level read a book about OKRs, or was mandated they be implemented for the purpose of driving growth, and when combined with the state of the business, it just makes sense. The primary benefit of OKRs and how they can help drive that growth is perceived to be possible with better alignment, and rightfully so. By standardizing the operational playbook across teams, everyone can speak the same language leading to improvements in efficiency, quality, and ultimately more value for customers. When OKRs are done effectively they become part of your work culture in a way where the benefits start to be realized. This is why Google is so famously synonymous with OKRs. They’ve been using them for 20+ years. OKRs, when done correctly, can provide an immense amount of benefits.
Adopting OKRs in Uncertain Times (Again)
When COVID-19 hit and companies were essentially forced to start working remotely, this was a question that caused so many groups to implement OKRs. Getting everyone speaking the same language, measuring effectiveness the same way, and operating in a consistent rhythm will help to alleviate those challenges. Now that we are facing an economic downturn, it’s almost the same exact situation. How can companies do more with less? How can you be efficient and profitable? How can business leaders ensure they hit those critical metrics, regardless of headcount or budget? OKRs are still being implemented with the hopes of solving those core problems. The reality though is that for so many companies, just deciding to “do OKRs” isn’t going to be the magic bullet. To do this effectively, it is a bit more involved. Deciding to do OKRs is no different than signing up to go to the gym. It’s a great first step, but it doesn’t ensure you will see the results you want.
The OKR Paradox
There’s a bit of an OKR paradox at the macro level after working with so many operational leaders who struggle with OKRs, especially the last few years. The paradox is, the benefits of OKRs can actually be negated (and even have a reverse effect) when OKRs are implemented poorly. If employees don’t know WHY they are doing OKRs to begin with then your OKR program is going to struggle and be mediocre or ultimately fail, no matter what you do or where you track your OKRs. These OKR implementations are doomed from the beginning because they start off on the wrong foot. Employees already have a pile of work on their plates, so when they ask themselves “what’s in it for me?” ... if the answer to that question isn’t a better state than the one they are currently in, chances of adoption are low.
Regardless of how you start out, the OKR program will move on full steam ahead (if it's not already). You'll have enthusiasts and early adopters. Internal trainings and announcements will be conducted. OKRs will be tracked in a spreadsheet, slide deck, or software tool. It’s not easy and it’s messy, but just having an operational system is progress even though may feel like pulling teeth. OKR quality and the correlated result can range from exceptional (typically your marketing and product teams) to poor or nonexistent for other teams. Quarter after quarter will progress forward. Are OKRs helping? Is it hurting us? Are we better off now than before? Do our people care? Why does it feel like trying to herd cats?
These questions are common, and rightfully so, keeping your pulse on operational alignment isn’t easy. The key is to just keep going. Keep learning. Keep doing. Keep improving. OKRs don’t become part of your culture overnight, but give it time and stick to it. Good culture is hard to define, but you know it when you see it. Not everything that matters can be measured, and not everything that can be measured matters. The best OKR programs start small and build momentum (ask Google). Good OKR programs try to do a lot and settle into a decent rhythm. Unfortunately, there’s a lot of bad OKR programs who try to do too much too soon. They wallow in mediocrity for quarters or years, perhaps even fading away completely. Going back to the gym analogy, buying all the equipment and doing some intense workouts for a few days is likely to create those long-term results. Consistency is key. Pacing is critical.
Although the OKR methodology has been around for a long time, we believe that it’s just getting started. The problem of operational misalignment is a big, huge problem that faces so many promising companies. It’s hard to pinpoint and solve quickly. It takes time. It takes change. It takes commitment. When OKRs started to really go mainstream, everyone became OKR gurus, which led to an ocean of inconsistent and poor information available online, unfortunately consumed by a lot of people trying to roll OKRs out. Even so-called OKR companies have horrible examples of OKRs, so it’s hard to understand a trusted source of truth especially when you don’t even realize you are being fed nonsensical information (i.e., writing 10 blog posts in an absolutely horrific Key Result, and it’s out there as an example….). When that below average information gets implemented and seeps into the fabric of a company’s operations, it’s like sand in the gears. It truly starts to become garbage in, garbage out. It causes more harm than good. It creates resentment and confusion. Instead of solving problems for customers, internal employees debate definitions and question priorities. And who becomes the fall guy? Not the people, process, or the products being used, but rather the methodology itself… OKRs. Well, I have news for you. OKRs are not your enemy. The enemy is the status quo.
Finding the What, Why, and How of OKRs
To ensure your OKR implementation runs smoothly, roll this out the right way. Lead with WHAT, follow with WHY, execute with HOW.
These simple messages (obviously crafted for your internal narrative) can go a long way, but they CANNOT be one and done. Repeat weekly, monthly, quarterly, whatever you have to do. Don’t let this stuff sit in a drawer and die. Nothing is more critical to the success of your company. Sure, you can get by on talent alone, plenty have done this, but to mitigate risk in these uncertain times, proper alignment at the organizational level which is sustainable is a strategy worth executing, even if it takes you a while to get it right. Find resources. Conduct activities. Create output. Drive outcomes. Generate impact.
If you’re interested in how Krezzo can make a difference in your OKR program, book some time with us so we can learn more about where you are at on your OKR journey and how we can help.