OKRs are on the rise in the land down under. My current project with the team at Hipages* is groundbreaking for me. It’s my first client that is fairly mature in their use of OKRs in Australia. One indicator of maturity: OKRs are no longer defined at the individual level!
Hipages has used OKRs for well over a year. They’ve adjusted and refined their approach to OKRs several times. Though painful at times, these iterations reflect an essential skill for any organization seeking to deploy OKRs. This skill is Hipages’ leadership culture of continuous, reflective learning. This learning enables Hipages to quickly refine and shape their approach to OKRs so it adds the most value to their organization.
Hipages’ high level of questioning inspired me to share some highlights from our conversations thus far. This post explores the level at which to set OKRs and the ideal number of OKRs to define for a given level. If you are using OKRs, please add comments to get a conversation going! Let’s analyze whether Hipages should OKRs all the way down to the individual level.
Define OKRs down to the individual level?
Like many organizations, Hipages tried setting up OKRs at the individual level. For a complete analysis of the pros and cons of setting OKRs at the individual level, I refer you Objectives and Key Results, the book I recently co-authored with Paul Niven.
CONS of setting individual-level OKRs
OKRs may be viewed by some as yet another corporate-imposed compliance tool that increases complexity and leaves even less time to get things done.
Confusion around variable compensation
Should your organization utilize a separate incentive compensation system that does not link to OKRs, employees may be confused as to why two separate systems exists (OKRs and incentive compensation).
Lack of teamwork
Individuals may focus too much on their own OKRs rather than the team-level OKRs.
OKRs that resemble a to-do list
Effective OKRs focus on results, not tasks. However, when creating OKRs at the individual level, there is often the temptation to include job-related tasks that, while important for the individual, may not contribute to overall strategy execution.
Some teams will likely already have the equivalent of an OKR system in place at the individual level. For example, a call-center team with a staff of a hundred telemarketers may have a call-center tracking system in place. The existing system may provide real-time feedback to every employee. Do we ask each telemarketer to write down OKRs and update the metrics? Doing so could be redundant. We do not not want OKRs to be a waste of time.
Pros of setting individual OKRs
For a more complete analysis in favor of setting OKRs at the individual level, please review our book. I feel a bit negative about individual-level OKRs today, so I’m only listing the cons. I feel the need to promote our OKRs book. Today’s publishing business seems to position Paul and I, the authors, as only ones promoting it!
So, what’s the optimal level?
After trying individual-level OKRs, Hipages decided to step back and develop OKRs at higher levels rather than at the individual level. And, rather than defining OKRs for every team in the org chart, they took a novel approach. They are currently setting OKRs at the “Focus Team” level. A “Focus Team” is a cross-functional team dedicated to a certain component of the overall business. This is similar to the “Squad” model Marty Cagan describes in Radical Focus, a must-read book for anyone deploying OKRs. I’ve seen the squad model work quite well at several organizations including eBay. And yes, Paul and I talk about this in our book as well. Is that the 3rd plug for our book? Wow! OK, next question.
How many OKRs shall we have?
One executive at Hipages asked me, “Should we have a small set of OKRs focused on the most critical issues for the quarter or shall we have OKRs that go across greater sections of the business?” He went on to note that, “We’ve varied between the two approaches. We’ve tried broad OKRs across many aspects of the business and also tried a single OKR. We see benefits in both models, but we’re interested in your views on this.”
But, like any great executive, he went on to effectively answer his question. He commented that, “…the iteration for this quarter feels best in that we have broad set of OKRs for the business at the moment based on focus teams rather than traditional teams.” I have strong views on the number of OKRs you should have. But, my views cannot be stated in a single sentence. For more on this, check out 2×2 matrix post on getting started with OKRs and my slightly controversial post, “How many OKRs should you REALLY have?”
I envy the Radical Focus model. This model declares “define a single OKR.” The elegance and simplicity of defining a single OKR is quite appealing. But, my objection to a single-OKR approach is that it just doesn’t feel right all the time.** Rick Klau describes a quarter where his team set SEVEN OKRs. And, he explained that it was a painful quarter due to lack of focus. For more, check out his Google Ventures video. The sweet spot is probably in the range of 2-3 OKRs.
When does ONE OKR work well?
- The primary intention of introducing OKRs is to increase focus.
- A team (such as Legal or Finance) reports that almost everything they do is “business as usual.” They are highly reactive, not proactive.
- Your company is really small and a single OKR at the top-level enables clear communication of the most important priority for the current quarter.
If you decide to use two or more OKRs, I advise listing the OKRs in order of priority. And, if nothing else, choose one OKR that is the highest priority and then define other OKRs as “also important.” I’ve heard from many of my clients that the exercise of simply agreeing on which OKR is most important creates more focus and alignment.
If this brief Q&A piques your interest, please share your story. We’d love to hear about how you’ve adapted OKRs to work for your organization.
Better yet, if you’re charged with deploying OKRs at your organization and want help now, request a private call with me. I can help you quickly explore how OKRs can work most effectively at your organization.
*Company blurb from Hipages.
Today, we’re transforming the way people get things done around their place. Founded in a garage by two great mates with a big idea, we’ve grown by using leading technology to change the way Australians sort out everything – from basic repairs to those big reno projects.
But while we’ve made things simpler and speedier, some things never change – like a good chat, a real relationship and a friendly face. Deep down, we’re a place that connects all kinds of great people, with all kinds of great tradies.
Because at the end of the day, we’re a company of Australians helping other Australians get things done – and done right. (And with 1.5 million visitors to our sites every month, there’s a lot to get done.)
**By the way, Christina and I are on the same page here. The basic principle is “less is more.” If you can make a single OKR work, that’s definitely better than having a massive set of 7 OKRs!