OKRs are dead.
That might sound like an audacious proclamation; OKRs, an abbreviation for objectives and key results, are still one of the most popular goal-setting frameworks in business.
But at least in our organisation, traditional OKRs are no more. Instead, we’ve tried to do something better.
All bark, but no bite
We saw the limits of OKRs first-hand after trying them for eight quarters.
Firstly, traditional OKR frameworks often contribute to the formation of departmental silos. Individual teams often make their own objectives in a vacuum, without considering what other teams are working towards or how they fit into the company’s goals.
OKRs also require regular review and adjustment to remain relevant and effective. But given most companies review them only quarterly — if that — teams may continue pursuing objectives that are no longer aligned with evolving business needs.
Often OKRs are imposed top-down without involving employees in the process. Not considering the valuable insights and perspectives of all employees risks creating a disengaged workforce and suboptimal outcomes.
Each quarter we encountered these exact problems. We’d get told our OKR is to "increase MRR (monthly recurring revenue)". Cue the finger-pointing at the sales team. Then came sales pointing their fingers at growth/marketing. This was a top-down introduction of quantitative KPIs without any context, which simply wasn’t working.
Most departments can't "see themselves" in these metrics or how they can influence them, so slowly bow out and go back to their normal day-to-day, never fully aligning with the new initiatives *imagine that gif of Homer Simpson backing into the bush and disappearing*.
Our OKR(ish) approach
But what does an alternative look like? After some reflection, we’ve arrived at what can be described as an “OKR(ish) Framework” (which you can see here).
We kept the "O" part, as teams and the company as a whole need goals to strive for.
However, rather than simply focusing on the quantitative metrics assigned to the objectives — say, if your goal is to increase revenue, the metric might be actual revenue — our framework includes two additional schools of thought. Those are the Narrative, Commitments and Tasks (NCT) framework, which encourages qualitative connections between strategy and execution, and Impact Mapping, which aims to help us better understand blockers, impacts and the wider context of the business landscape.
What the OKR(ish) framework looks like in practice
Objectives and blockers
First, objectives are drawn up by management in alignment with overall company goals. Then, team leads meet with team members to brainstorm what blockers to progress towards these goals exist and to gauge why current methods aren’t achieving the desired results. These ideas are subsequently fed into a meeting with management and narrowed down to three core blockers per objective.
For Onomondo specifically, we wanted to focus our efforts in three core areas:
- Improve efficiencies in smaller deals;
- Increase our share of mid-sized customers;
- Establish a larger presence with enterprise customers.
These became our three objectives (or the "O") for the entire company. We then tied key results (the "KRs") to these objectives. In other words, how will we know we have achieved these objectives? These included things like MRR generation and closing X amount of deals of a certain size, and so on.
Then this is where the blockers came in — why couldn’t we achieve these OKRs doing what we're already doing? Personally, I think this is where traditional OKR frameworks come up short. Employees aren't just doing whatever they feel like doing on a particular day; they're working hard towards a shared objective day in and day out. So, if they aren't achieving that objective, perhaps it's best to ask them why rather than putting in all kinds of KPIs around them to continuously check if they're still not achieving those objectives. A wild thought, I know.
One of the most common blockers mentioned in our sessions was that there were too many people involved in the closing of smaller deals — meaning our CAC (customer acquisition cost) was so high it basically made it too expensive to close such small deals.
Next, KPIs are drawn up by management based on objectives and blockers. Management nominate people to “own” each objective based on expertise, as well as two or three “co-owners” to support. Usually, these are people from different teams.
The entire company then comes together to brainstorm on ways to overcome blockers and achieve objectives. Owners of each objective run an “objective station”. The company is split into three and each group visits each station, sharing ideas on Post-it notes. At the end, the ideas are collected and company members sign up for task forces that particularly interest them.
We called this "tactics" step of the process the “Onomondo Strategy Day”; all Copenhagen-based employees were encouraged to attend and take a day out of their regular work to really participate.
The energy and excitement in the room facilitated bottom-up buy-in, as the "boots on the ground" were able to give their insights and context into what could help drive the company forwards.
But this wasn't the only positive outcome. By having cross-functional teams working together, you suddenly saw teams like product and tech realise just how much they can influence MRR — it was no longer just a "sales and marketing thing". These conversations really helped to break down silos and gave everyone a better understanding of people's daily tasks.
To follow on from the aforementioned examples, implementing a PLG play (product-led growth) for deals of a certain size was selected as a tactic to help us improve the CAC of smaller deals.
ICE scoring and prioritisation
To apply a scientific approach to prioritisation, tactics are then given an ICE score, with each assessed on its Impact, our Confidence in achieving the objective and Ease of implementation. Scores are averaged, and tactics with the highest ICE scores are given priority.
Cross-functional task forces
Each task force — formed of owners, co-owners, and volunteers — is given a C-suite sponsor to provide top-down support. These cross-functional teams focus on crucial tactics, accounting for about 70% of individuals' time without overwhelming their existing workload.
As we know, follow-ups and reviews are the final, crucial pieces of the puzzle to make performance frameworks successful over time. So, we encourage task forces to determine their meeting frequency, typically meeting weekly to ensure progress and that everyone is updated on tasks, with monthly all-hands meetings updating the wider company on task force progress and KPIs.
We may have declared OKRs "dead", but rather, we like to think we've revitalised them to fit our modern business landscape. They're evolving, not quite disappearing. It's still early in implementation, and only time will tell if we achieve our objectives. Nevertheless, this new approach feels right, and has fostered greater collaboration and satisfaction across the team.