18 experts explain common OKR mistakes in 2022
With the first blog in our expert series covering why companies fail with OKRs at their first attempt, we followed up by asking the top OKR bloggers, coaches, and authors what they think are the most common mistakes companies are making with their OKRs.
Tl;dr - a selection of the key mistakes made include:
- Conducting performance reviews based on objective achievements
- Having outputs as your Key Results
- Hard cascading of top-level OKRs into departments and teams
- Failing to trust their employees with the important decisions they need to make
- Going overboard with too many OKRs
- Taking the framework as set in stone. It’s a paradox if you implement an “inspect & adapt” framework like OKR in a waterfall approach and do not let changes happen
- and many many more....
Read all of the full-length answers from our 18 OKR experts below:
Christina Wodtke, Radical Focus Author, OKR Expert, Consultant & Stanford Lecturer
There are so many. The worst is probably conducting performance reviews based on whether or not you achieve your objectives. No one is ever going to set a stretch goal or try anything really difficult if they think it's going to interfere with their ability to pay rent and feed their family.
The second big mistake is having outputs, i.e. tasks and projects, for your key results. It’s critical to make sure your key results are outcomes; i.e. a metric that would move if you were successful. That way you can try different things to achieve your key result. If your key result is “launch a new feature” and you achieve your key result but no customer uses it, that is not success. But if you have a key result like “Increase daily active users by 15%” then you can try new features, marketing, fixing usability… you can really dig in to make success happen.
After that, there's a whole slew of mistakes people make. There are the classics, such as set and forget, sandbagging, and overreaching.
A new one I've been seeing over the last year or so --and I really wish I knew who was propagating this one-- is trying to create an OKR for every single thing people do. I’ve seen entire roadmaps of OKRs, which is… suboptimal. As well, service teams such as engineering and design often don't own enough of their time to do OKRs beyond those they support via the product teams. If you give them OKRs you're just exhausting and frustrating them. The reason I called my book Radical Focus is because I believe in using OKRs to make sure that people don't forget about incredibly important strategic goals. When you’ve got 500 goals there's no way you're going to remember them all, much less actually achieve them. Stay simple and focused and amazing things will happen.
Paul Niven, Global OKR Coach & OKR Author
- Writing vague OKRs that don’t measure business impact and thus add little value
- Not establishing governance processes for OKRs. The system is touted as being simple and easy to understand. However, some governance is required, for example: how often check-ins will occur, how scoring will be calculated, etc. Without some basic guidelines, there is little consistency in approach across the organisation
- Going too far too fast. We’ve seen organisations that have gone from no goal setting in place to mandating OKRs for thousands of employees practically overnight. It’s too much too soon with little guidance or structure and almost always leads to confusion, frustration, and poor results
Allan Kelly, Agile OKR Coach & OKR Author
I hear of many places where people are told “We are using OKRs”, then people are left to Google what OKRs are or to buy their own book. In the first instance companies aren’t providing the basic training in OKRs. Then, once you start using OKRs there are a million questions that pop up about how the company wants to use them. Even if managers don’t have the answer they need to be available to talk through the questions.
One particularly knotty problem is the linking of bonuses and compensation. Every book you ever read says “Do not connect OKRs with remuneration” and yet every big company seems to do it; it seems irresistible. Go read Daniel Pink, learn about intrinsic and extrinsic motivation, look up Goodhart’s Law and the Law of Unintended Consequences. Connecting OKRs to money is a bad idea.
Bart Den Haak, Consultant & OKR Author
Beyond the obvious reasons like “set and forget”, using OKRs at the individual level, lack of leadership support and coaching, companies that don’t have true cross-functional or product teams, output-driven KRs instead of outcomes, and focus on too many OKRs (Teams should really focus on just one OKR at the time). The most common mistake is to start implementing OKRs too soon. When you don’t have at least a foundation of good metrics or KPIs to act as your baseline, and don’t have the right (project) skills and competencies in-house, it’s very hard to use OKRs.
That doesn’t mean it’s impossible, but it requires a lot of time and coaching from senior management. It gets even harder when you have (middle) managers with an old mental model (Taylorism) about how to manage teams, implementing OKRs will also be a tough (or even impossible) journey. Try to overcome these obstacles first when implementing OKRs. Organisations that have a strong Agile mindset are generally better and faster in adopting OKRs.
Hannes Albrecht, Founder of how-to-okr
1. Set & forget
When the process of defining your new OKRs is hard, long, and painful, it almost feels like a relief when the new OKRs are finally set. Then teams tend to go back into their normal working mode. They forget about integrating OKRs into their routines and ceremonies. They don’t share learnings and forget to use check-ins as an opportunity to recalibrate focus and prioritise all the things on their plate.
2. Parallel drafting
Starting OKRs with a more top-down approach is totally fine and makes sense for most organisations. Why? Because the clarity of strategic direction is simply not there across employees. We should use the first couple of quarters to increase the level of understanding in terms of where we are and where we want to go. Once this is at a good stage, teams actually don’t need to „wait“ until company or department level OKRs are being created and finalised - which slows down the creating process massively. Parallel drafting means, that teams and departments start drafting their OKRs in parallel (maybe just with minimal guidance and input) and then you use most of your workshops to work around aligning and fine-tuning.
3. Stop cascading, start aligning
Hard cascading of top-level OKRs into departments and teams is still pretty widespread out there. This will slow down your process of defining OKRs (because everyone sits and waits until these OKRs are being defined), and the employee’s buy-in will be low, because the OKRs are basically already set. And finally, you stop teams being able to innovate or improve because you ask them to just contribute towards existing OKRs. Instead you should use all your efforts into increasing clarity of where we are and where we want to go. People will align by nature, if they know where to go. Trust them!
Brad Dunn, Chief Product Officer & OKR book Author
- People set too many key results (KRs)
- They tie performance and compensation plans to it
- They use OKRs as a performance management tool
- And they set the outputs (say, building a specific feature) as the key result, instead of some kind of leading indicator, like a climb in monthly active users
Richard Russell, OKR & Leadership Coach
Failing to trust their employees with the important decisions they need to make. This takes multiple forms - from micromanaging, to using OKRs as a task list, and using OKRs as a performance assessment tool. The second problem is not giving employees enough context and coaching to make those decisions. The real goal of OKRs is to empower more people in the organisation to make decisions - but the work is to give them the context, coaching, and trust to do so.
Nikhil Maini, Founder & Managing Director at OKR International, Professional OKR Coach & Behaviorist
- Making OKRs an HR-led exercise rather than a CEO-led exercise: HR is focused on people, while OKRs are a tool for business growth. OKR is about the organisation—not the employee. The CEO is responsible for designing the strategy—but also accountable for the successful implementation of it
- Not Being Clear on the Why: One client listed 9 reasons when I asked them “Why OKRs?”. This is kind of convoluted in the sense that it does not provide any form of clarity on where you will be focusing your efforts once you start with OKRs. One or two clear reasons work best.
- Not Managing the Change Process: OKRs is a change exercise, not a plug-n-play system. Understanding how to nudge your way through this change process is key. Overwhelming the organisation is a sure shot way to fail. I would recommend starting small, maybe cover the top couple of layers to start with. People down the line also need to see that the leadership is serious about this
- Expecting Results Right-away: the first couple of cycles are more about strengthening the OKR muscle. More focus is needed on getting the process right with your people. Once this is done, you are ready for the big rocks
- OKR Ham: Bias for action is quite different from action bias. It’s good to be enthusiastic about OKRs. Going overboard with too many OKRs means you may not only lose out on clear prioritisation but also end up investing in resources that may not give you the desired results. Less is more when it comes to OKRs
- Taking OKRs to Individual Levels: OKRs are best served as a collective – as far as possible with the exception that sometimes the team is made up of just one person. That being said, it’s best to keep OKRs limited to Organisational, functional, or sub-team levels. The power of the collective is what makes OKRs truly fruitful
- Linking OKRs to reward: OKRs are meant to encourage discretionary effort, not sandbagging. For people to truly innovate, they need to try new experiments, and in that process even fail several times. This learning is what creates the ecosystem for OKRs to thrive. When people don’t feel psychologically safe to fail, they will stop innovating. Connecting OKRs to the reward systems like bonuses and incentives only encourages teams to play safe and eventually get complacent
- OKRs don’t cascade, they align: Remember, it’s a social process that depends on leveraging the collective intelligence of teams to define OKRs and call out interdependencies. Once the strategic, parent-level goals of the organisation are defined and communicated, teams need to look at creating and aligning their OKRs to these directional goals and also look at how their OKRs are interdependent on other teams’ OKRs. The key here is to make OKRs a Social Process
- Software is a means to an end – not the end in itself: know what software best suits you will be based on the first few cycles of learning. A good OKR software is an enabler in making OKRs transparent and offering real-time feedback to the users. However, it’s the people that will eventually be using it, and the culture of regular feedback, the discipline of rituals, and coaching conversations are what makes OKRs eventually work.
- Using Cadence Reviews as a Business Review: Cadence review meetings are about 3 things: what’s working, what’s not working, and What are we learning. It’s like a Kata. It’s meant to create a culture of a learning organisation. I have seen teams coming together and solving problems and making decisions with the cadence review meetings – that’s highly unadvisable. While a good software shows you how you are progressing anyway, using cadence reviews to share learning, and looking for possible pivots is what we need
Omid Akhavan, OKR Coach at OKRs.com
On top of the usual suspects, issues arise when companies do NOT:
- Designate and train an internal OKRs Coach to drive the OKRs (as a SPoC)
- Figure out how to set targets consistently and score KRs accordingly
- Use shared (cross functional) OKRs + define leads/contributors for each KR
- Plan, communicate and track the actions/projects needed to achieve KRs
- Focus on scoring and performance evaluation instead of lessons learned
Madeleine Silva, OKR Coach & Trainer
- Using OKRs because they are the trending topic, I think companies need to understand what is the problem they want to resolve with OKRs. After that, companies need to try to establish their parameters according to their necessities
- Design and launch OKR and don't do the follow-up ceremonies
- Creating task KRs (key results)
- Don't have or understand a strategy before deploying the OKR framework
Paul Barker, OKR & Strategy Coach
I’m betting that most answers to this question would be “linking OKRs to remuneration”. Which is true, it’s not a good idea. But the biggest oversight I’d warn teams against is in not creating an ongoing discipline, a regular cadence, a business habit of execution. “OKR” needs to be a verb - it’s something that you do, not something that you set. The mundanity of excellence resides in the habit of regularly checking in on, reviewing, reflecting, and resetting your OKRs.
Christina Lange, OKR Coach & Speaker
Connecting it to compensation & benefits. People & teams are so good at cheating and start creating “ambitious” goals that they will always reach. Still many companies use incentives systems (“as you can’t take it away from people who already have it”) and then they try to integrate it.
Taking the framework as set in stone. It’s a paradox if you implement an “inspect & adapt” framework like OKR in a waterfall approach and do not let changes happen. Every company should reflect their context and strive for their own adoption. OKR makes it visible where you have blind spots. E.g., when it comes to strategy, vision & mission. That's hard for many companies to accept (“Just implement OKR…) and they underestimate the power of OKRs.
Kenneth Paul Lewis, Co-Founder and Director at OKR International, Angel Investor and Leadership Coach
The most common mistakes companies make are:
- Not educating everyone on OKRs. Reading books or articles is just isn't enough, leaving people with different learning experiences. This causes a mismatch between teams on how to run OKRs
- Not appointing an OKR champion(s). You need a person(s) who understands the organisation strategy, culture, and structure who can facilitate this entire implementation. This champion runs point with leaders and teams in crafting OKRs, aligning them to the organisational goals, and most importantly stitching the OKRs together. They ensure discipline and rigor for check-ins and cadence reviews
- Using OKRs for Performance Management: In OKRs the focus is on goal achievement, In Performance management, the focus is on the person achieving the goal. For OKRs to work, you want people to be passionate about achieving stretched goals and not worried about how they will look during a performance appraisal. The most common symptom is sandbagging and not collaborating to help other
- Focus on Activities vs. Outcomes: An incorrect OKR implementation doesn't call out teams and people as they write activity KRS (Set of tasks) instead of outcome KRs (desired set of measurable results). This leads to people and teams only tracking to-do lists instead of how they are actually moving the needle.
- Having Too Many OKRs: The primary purpose for using OKRs is prioritisation. When everything becomes a priority, then nothing is. Too many OKRs cause teams to spend countless hours in setting, tracking, and refining. This will exhaust teams, taking away valuable time that could've been used to achieve the OKRs
- Making HR run the entire thing: If HR is left with managing the entire show, then other teams will dump all of their responsibilities on them. Check-ins, Cadences and Retrospectives will become an HR task. And teams will start looking at OKRs as a performance management process rather than a goal achievement framework.
Carsten Ley, OKR Goal-Setting Coach
- Confuse KRs with Actions or Tasks, measuring task achievements rather than real impactful results
- Too narrow Objectives, so that it is impossible to define multiple internal and external measurements or team layers below
- OKRs are broken down in team silos not in common achievements (e.g. Sales OKRs)
- Operation and Back-office is not given customer success responsibilities and achievements
- OKRs are developed top-down and not in workshops or with possible feedback
- OKR tracking meetings are organised as extra meetings rather than incorporated in existing team meetings
Saba Ghafari, OKR Coach & Organisational Development Professional
- Not considering that KRs are about creating value and not getting tasks done
- Being a perfectionist in setting OKRS and losing progress
- Considering other companies’ thresholds’ in KR setting instead of defining their own
- Considering manager KRs as lower levels objectives
- Lack of team alignment in target setting and missing review/feedback meetings during the period
Mike Burrows, Lean, Agile, and Kanban Pioneer
Implementing OKRs as a mechanism for top-down control is definitely an anti-pattern, antithetical to its original purpose and hardly a recipe for innovation, collaboration, self-organisation, and other hallmarks of the deliberately adaptive organisation. Not that bottom-up is the whole story either, but rather that every level and every team or unit at every level gets to express its strategy in its own language. Yes, each strategy needs to speak to higher-level objectives, but not to the extent that local opportunities and local complexities go unrecognised.
Mark Richard, OKR Coach
Overcomplicating things, uninspiring objectives, poor Key Results, not understanding the method before beginning
Khalil Medina, CEO & OKR Coach
Short and simple - Using KPIs as KRs
Gerri Vereen, Executive & OKR Coach
There are several common mistakes which can affect the positive impact of using OKRs. Three common mistakes I recently addressed were: 1) too many OKRs and mapping all work to OKRs (KPIs, action items, etc.); 2) additional OKR-specific meetings and/or processes; and 3) OKRs used in performance evaluations.
These three mistakes were negatively impacting an organization I have been working with. In reviewing their OKRs, we found that each quarter there were 15+ objectives identified which were really more action items tied to their KPI’s. The second problem identified was the status update process. The CEO was spending hours each month, painstakingly updating a spreadsheet with the 15+ objectives. Not only was this adding time to the leaders’ providing the updates, the CEO was using his precious time micromanaging the results. The third problem we uncovered was that every employee’s performance evaluation was based on their OKR achievements (or action items, as it were). In “Measure What Matters”, John Doerr stated that the one of the biggest downfall of using MBOs was tying salaries and bonuses to performance goals. As he stated “If risk taking can be penalized, why chance it?” Once we were able to identify these three issues, this organization immediately began addressing and resolving these mistakes.