Why do OKRs fail?
Why OKRs fail is one of the first questions most people ask our consultants. Most systems/frameworks/approaches to anything organisational or technological always have both their fans and detractors, it’s not unexpected for activities like OKRs to fail.
It is rarely irrational; most people quite reasonably just go on their own experience. If their experience with something is good, they like it and if it has been bad, they do not like it.
The OKR framework is a simple and solid framework promising big benefits to organisations that use them, but one that comes with quite a few implications and requirements.
These allow you to determine whether OKRs are right for a particular organisation and what work is going to be required for an organisation to adopt them successfully.
Fail to pay proper attention to these considerations and plan for them, and your OKR implementation may well unnecessarily end up as just another failure story.
Here we discuss the top five reasons we see OKRs fail and suggest some approaches you can use to prevent your implementation from going the same way.
Misunderstanding what OKRs are and not treating them as a Strategy management system.
The OKR process allows organisations to develop, communicate, constantly validate and adapt the corporate strategy, it is a goal setting framework.
It is not a way of tracking the high-level actions that need to be done, or a reporting mechanism for a leadership team to track the success of a big initiative.
If you are using the OKR methodology and your organisation sees writing them as the only real impact they have on your people’s working life, then you are likely misunderstanding how they are intended to work.
The OKR approach is designed to create an aspirational goal and provide the key result, or success criteria for achieving that objective. It is not designed as a new way for measuring activity which most organisations have enough capability in.
The OKR process is designed to create strategic alignment from the company objective all the way through to the team OKRs by asking what is our desired outcome and what are the measurable goals.
Senior leadership are responsible for communicating the company goal, the company OKRs and ensuring focus during the OKR cycle on the OKR goals by empowering teams to own their own outcomes and providing space and time for people to operate the OKR process in alignment with the OKR methodology.
We’ve documented Impacts and Gotchas for Implementing ORKs in this article: Implementing OKRs? How to prepare your organisation.
OKRs fail if you do not invest appropriately into the adoption of OKRs
For most organisations, an OKR adoption will represent a significant investment in trying to improve how aligned, connected and outcome-orientated the organisation is. This implies there needs to be a fair investment made, as this will represent a transformation of the organisation in several major aspects, especially if you do not have a product team focus.
If the following symptoms apply to your plans for implementation (either proposed or in-flight), then you need to act if you want your OKR program to be a success.
- No time allowance for teams to learn and upskill in creating good OKR, how to manage OKR planning and how to manage quarterly OKRs.
- An expectation that work in-flight will not be interrupted through the OKR adoption process; no slack time or allowance for reduced output has been made.
- No investment in outside training or coaching on how to implement OKRs or how to create valuable OKRs – even a single OKR champion can make a major difference.
- Limited investment into OKR software, tools or data extraction that support the OKR system.
Failure to Invest in the Adoption Process
Failure to sell the change to the business and a lack of clarity and support from leadership is a main reason why OKRs fail, and can often lead to:
- Mistrust and anxiety toward OKRs, lowering team morale.
- Teams enter a compliance mindset just to get them done, poor employee engagement.
- Elements of leadership at various levels may dictate lower teams’ Objectives and Key Results, or exert overt influence over the teams in how they achieve their outcomes, empowered teams are disempowered.
Addressing the Issue
The best way to address this issue is to treat the adoption of OKRs as a full change program. It needs to be allocated a budget, set into a time frame, allocated resources, and, as described in issue 3, ensuring you have the appropriate leadership buy-in.
We recommend the following should you experience any of the issues highlighted previously:
- Ensure you develop a story for why you are adopting OKRs and be clear on this message. Explain the drivers for change, what isn’t working well enough that OKRs will fix. Share you vision of the future and what it will mean for people.
- Engage the resistance! Find the detractors and listen to them, allow the concerns and fears to be aired and support them through the change process.
- Find the people and teams who embrace the change and involve them in the process. Create OKR champions/ambassadors who can help support others through the changes. Spread good news stories when they happen!
- See that brown bags and discussion forums are organised to allow people to digest the change and find mutual support.
- Ensure a single narrative and enforce it among all levels of leadership. Conflicting messages from leadership will cause confusion/disruption in the teams and will reduce trust in the change.
What if OKRs do not fit your current cultural zeitgeist?
There is nothing wrong with being an activity focused organisation. Many organisations are very successful at developing products and services by focusing on activity and measuring classic indications such as time, cost and quality.
Be cognisant of where you are as an organisation and be honest about whether OKRs are actually compatible with where you are.
OKRs fail disastrously (usually taking on complete irrelevance, or causing inconsistent disruptions and inconsistencies between business units) where they are implemented in organisations of this type without the reality of the scope of the transformation being understood and planned for.
Assuming the large transformation needed is the right thing for your organisation, then the following pointers may help in your approach.
- Be clear to everyone that you are moving your organisation from activity and plan driven, to outcomes and data driven. People will be rewarded for data interpretation and their ability to adapt with data insights and outcome measurements that support activity such as pivoting, halting development that isn’t creating desired impacts and their ability to identify desirable outcomes and how to drive to them.
- Examine your funding and budget models and identify any where it is going to be a challenge to adopt an outcome-driven approach. For some teams OKRs just may not be appropriate.
- Identify the governance and management frameworks within your organisation that would place a barrier between everyday operation and the adoption of OKRs. Before implementing OKRs into that department ensure you have a transition plan to manage the change and mitigate the risks and issues.
- Create organisational OKRs that support this shift in approach, use the OKR system to help you enforce the change and encourage teams to achieve OKRs that drive the new culture.
Expecting immediate results is major contributor to why OKRs fail
It can take a year for an organisation to become competent at OKRs and the benefits grow slowly over that time. This can often be too long for many senior leaders, they then start to lose faith by the second quarter and abandon the initiative by Q3/Q4.
To avoid this failure mode, we offer three main points.
- Most importantly it is critical to understand what you are buying and how long it will take to realise the benefits you are expecting. You must plan for the impacts and challenges the implementation will have on your organisation and give it the time and focus it needs to be successful.
- This type of change will usually require ongoing support throughout the transformation from OKR and professional coaches to support teams and leaders in both the use of OKRs and in the personal and career development changes that will be required. Investing in this type of coaching will speed up the process and make it more robust.
- Stay the course! It will be hard, and it will require commitment and investment from the whole organisation, but there are significant rewards and benefits to be had once the system is in place and operating. Nothing comes for free.
Summary of why OKRs fail
These points cover our view of the biggest “reasons” we see OKRs fail in an organisation, but they are by no means comprehensive in terms of what is necessary to create a successful implementation. A good implementation is tailored to the organisation and will address its specific mix of issues and aspirations to deliver an OKR system that works for the organisation as quickly as possible.
For more information please read some of our other publications on what preparations are necessary to implement OKRs successfully.