40% of global CEOs cite failure to align as the single greatest challenge to executing strategy, and yet over 90% of employees don’t understand their company’s goals or the part that they need to play in order to achieve them.
- Harvard Business Review, 2017
With this in mind, we decided to interview with Paul Niven, OKR expert and author, to delve into this a bit deeper.
Paul Niven is no stranger to businesses who are facing these issues; a consultant and noted speaker, he is the author of six highly acclaimed books. His most recent (co-authored with Ben Lamorte) is “Objectives and Key Results: Driving Focus, Alignment, and Engagement with OKRs.” Paul’s six books have been translated into over 15 languages around the globe. Paul also delivers keynote addresses at conference events around the world and has published in a number of respected journals.
Just3Things is very pleased to be partnering with Paul to deliver a series of OKR accreditation programmes, launched in Austin with dates soon to be confirmed in London.
We caught up with him to discuss how OKRs help organisations to align their people to their strategy.
Hi Paul, thank you for taking the time to speak with us! Let’s start at the beginning – where do OKRs come from?
If you will indulge me in a brief history lesson – for those who think that OKRs are a new idea, they really aren’t. We can trace them back to 1954, in a book written by Peter Drucker called ‘The Practice of Management’, where Drucker introduced a concept called ‘Management by Objective’ – every Manager should declare every year what they are accountable for, what they would rely on others for and what others could depend upon them for. This idea became popular, but like a lot of ideas it was not always implemented well and so fell out of favour. OKRs were resurrected by Andy Grove when he was CEO if Intel; he saw the latent power in this idea but thought we could simplify it.
It is basically two things – where we want to go as a company and as individuals and how do we know when we have got there. And this is really the modern idea of OKRs as we know them today. Grove had an intern, John Doerr, who is now a Venture Capitalist in Silicon Valley and has funded a lot of well-known corporate names today, including being an early part of the Google story. So John bought OKRs to Google when they were a small start up of 10-12 people – and the organisation still uses OKRs to this day with their 70,000 employees.
A lot of people think OKRs are specific to Silicon Valley but that is not the case – we work with many different companies of all shapes and sizes. Public sector, start ups, tech businesses, huge enterprises – all can benefit from using OKRs.
The acronym stands for Objectives and Key Results. An objective is a broad qualitative goal designed to propel an organisation forward – what do we want to do?
Key Results are quantitative determination of whether you achieve the objective – how will we know when we have got there? One objective can have multiple Key Results to define success.
Each key result also has initiatives or actions associated with it – what are we actually doing to move the needle on the measurable key result.
Why, in your opinion, are OKRs better than using conventional goals?
OKRs help entire companies communicate company strategy and align employees around their strategic goals. Alignment happens naturally in that different departments or teams might be accountable for different key results within their department. OKRs should, as much as possible, be transparent to all employees giving everyone the context and ensuring that all are on the same page.
So how would an organisation start to implement OKRs?
Every company is different but there are some standard steps:
- Start with Why – why are we doing this, what are we hoping to achieve? I joke with my clients you can’t say that you are implementing OKRs because Google uses them – that’s not a legitimate reason. If you don’t have the “why”, it’s difficult to gain traction with your OKR programme.
- Next thing: do we have an executive sponsor who understands OKRs? We need to ensure that the senior team aren’t talking a good talk on OKRs and then simply focusing on financial performance only.
- The next step is for the organisation as a whole: it is essential that you confirm or develop your mission (which I define as core purpose), your vision (a description of the ideal end state), and your strategy. These are the foundation and give context when you develop your OKRs.
- Following on from that, it’s time to start defining OKRs. If possible start at the top. I don’t use the word ‘cascading’, but I do often talk about connecting OKRs from one level to the next – connecting OKRs allows everyone to be on the same page.
- As you are developing your OKRs it is essential to find alignment with other groups. Think about “who do we depend upon to deliver this objective”? “Who depends upon us to deliver their objective”. Having alignment with other teams so important – if we don’t connect with other teams we can overlap or fail to deliver.
- Once you have created your OKRs, you need to think about how you incorporate them into your working rhythm – many companies make the mistake of putting effort into creating OKRs but then not looking at them again for 90 days. They need to be living and breathing to be effective.
What cadence should organisations be using to set OKRs?
The company level strategic OKRs, aligned against strategic pillars, can be set annually. However one of the core advantages of OKRs is that they shorten the cadence to quarterly – in today’s ever-changing world, a lot can happen in 90 days so having a shorter time horizon increases focus and likelihood of achieving goals.
Why do you think that it is a good idea for organisations to consider using software to embed their OKR programme?
For organisations to realise the benefits of OKRs they need to think about transparency and alignment across teams – if not, they run the risk of duplication or confusion. Software can be hugely helpful here. Also, keeping OKRs live and updated is tough to do in a transparent way without software.
You have seen a lot of software tools out there, what is it about the J3T platform that you like?
We’ve seen a number of tools designed to support OKR and we are extremely impressed with the intuitive functionality of Just3Things.
Why did you choose to start an accreditation programme?
For your OKR effort to succeed, your organisation needs an internal OKR Champion and knowledge expert to guide and synchronize the effort, inspire and motivate your employees, push the effort forward, and collaborate with the C-level suite on progress. It is crucial for the success of your OKR effort that your Champion, Ambassadors and Team Leads receive the best training available and we are the global leader in OKR Training.