OKR Deep Dive: All About the Definition & Planning Process

There were so many things going on recently. We've attended the CPO conference. Our last episode was actually the recorded panel that we did. And I'm not sure how you feel, but a lot of stuff has happened since then. A lot of new followers, a lot of requests to certain topics, a lot of great speakers in our timeline, I almost said in our funnel, so to say. And yeah, I was just thinking about catching up on a request. So one of our dear followers asked us to talk about OKRs, which we haven't by now after, I don't know, almost 110 episodes. So what a better time to talk about OKRs than in April, where probably most companies just finish their Q1 goals and quarter and are now heading into the second quarter of the year. I mean, it's a little bit late already, but at the same time, I do remember... Today's the 16th. Yes, as we record, it's the 16th. But I do remember how many companies I've seen where they've been planning OKRs literally for the first one and a half months of the quarter with only another one and a half months left until the quarter was over, right? So I think it's good to directly start with that, right? Because that's also something that I experience a lot when I work with companies that nobody starts preparing and nobody is not correct. But I see in many companies that they are not using, for example, the beginning of March to start thinking about the OKRs for next quarter, because they are so busy with finalizing them, achieving them, which leads to the fact that they have to do all the planning by end of April or beginning of May, which just leaves you six more weeks to be able to work on the next big quarterly goals. Which I mean, you could look at it from like two sides, right? Like if every quarter it takes you the first six weeks to then have them ready, I mean, it would mean that it just like automatically moves the cycle six weeks back. But I think the bigger problem is not like when they start their OKRs, but more that actually like this time when companies work on them is often stale because they still don't have the OKRs ready and aligned with the rest of the organization. So that means they work on topics that might not be a company priority and so on and so forth. And then you have like the six weeks that actually don't contribute to the overall OKRs. Or where then you start like working on objectives and key results that tie back into what they did before. So they're faking it. Yeah. And sorry, go ahead. No, go ahead. Go ahead. Yeah. I mean, I was just thinking about talking about the root cause. And since you are a leader, what I many times experience is that so many people, especially the leader are also falling into the trap of being busy with operational stuff, right? That the whole planning part falls apart and also the delegation part of the whole planning, right? I mean, as a leader, you also need to ensure that your team is freed up or has enough time to start thinking and brainstorming into the next quarter. And I was just wondering how you see this because I mean, you are confronted with that, I guess, right now. So maybe you can share a little bit about that. I mean, I have to say, it's like two weeks into the quarter and we're done with our OKRs. With the planning or with the achieving? With the planning. Otherwise, we would have a completely different problem. So we are already working on achieving them. But I think one of the most important things that I've seen over the last quarters is that it is A, extremely important that also like the company level objectives, like the top level ones are set very early because they are also the ones that then inform and help the teams to understand how their goals can tie or need to tie into the overall company objectives, right? So the earlier you can set that foundation, the earlier also the teams can start working on, OK, what do I need to do or which goals do I need to set for myself in order to be able to accomplish or to reach the company objectives or to contribute to those company objectives? And I think it's great that you were mentioning the whole thing around company OKRs. I do remember while we were working at SumUp that there was also like this kind of, in quotes, clearly OKR goals that we had, right? To, for example, double our revenue. And I think it's, I remember like every year, I think from the beginning when the company was founded, they did manage to double the revenue every year. So like with amazing growth. And I also remember like every time it was pitched at the beginning of the year, people were like, how can we do that? It's almost impossible to double again, right? But there's this nice quote saying, like, if you have three hours to clean up your apartment, you will need three hours, right? If you have one hour, you'll be able to do it in one hour. And if you have like 30 minutes, you will do it in 30 minutes. And if you have three minutes, you will do it in three minutes. That's why whenever I travel, I make my luggage 10 minutes before I need to take the train. It's the most effective thing you could do. Yeah, yeah. And that's the point, right? I mean, setting like these high goals. And it was also something I wanted to talk to you about regarding the whole goal setting and being bold and stuff like that around OKRs. I think sometimes it's very tough and it can be also very frustrating for team by not achieving the, let's say, 100% or 110%. But on the other hand, setting bold goals also empowers and enables people to think broader and think outside the box to be more creative to achieve those big goals. But I'm also happy to hear what you think about that. Yeah. No, I think, I mean, it obviously makes sense for OKRs to be stretch goals, right? Because I think that helps you really think of different ways of achieving them out of the normal operations or the ordinary things that you already do usually. I think just one thing that I've seen recently is like by considering that OKRs by nature should be stretch goals and that you usually would reach them. I mean, you would say usually it's good to reach 70%, 80%. I think Google is more around the 70. Other companies do 80. I think it's up to the company to decide. And now what I saw is that a team I was working with, they reached 100% of their objectives. And now the first reaction, obviously, when working with OKRs from the people who are then in those sessions are like, OK, did you set ambitious enough goals? And I think that's a fair question, right? Because that helps you like also push yourself. Now at the same time, the impact on the team was like, or what the team felt was we set very ambitious goals and now we worked our asses off. We worked over hours. We did everything trying to reach them. And now that we reached 100%, you're telling us that they were not ambitious enough and it's kind of negative. So I think it's like kind of important on like really also framing it well and messaging it well. It shouldn't be the teams then automatically go for 80% and that you set them so that in a way you would reach the 80%. But yeah, I think it comes down to communication and to making sure, OK, as you also define the goals, how ambitious are they? And how easy are they to reach? And how do they compare to previous OKRs that you had? Yeah. And I'm 100% with you. OKRs are definitely about communication. And yeah, it brings me also to the kind of downsides, right? Because I think if the frame is not clearly set around the whole tool of using OKRs, it can lead to frustration within teams, right? Because they're working their asses off and they're trying to achieve the 100, 110%, which is also a good ambition, by the way. It's nothing bad around it. But I think once it happens that a team hits the 100% or 110%, it's very important also from a leadership side to be careful how to deal with that. Because the question to ask, did you set ambitious goals is first of all, totally fine. But you also need to be aware of the impact that it will have with the team. So if the team argues that they worked their butt off, that it's over hours, they're completely done and close to burnout, right? There's also a lot of appreciation needed in my opinion to share with the team, because otherwise you're going to lose them. And then the OKRs become like the tool to be hated instead of the tool to be loved. And there you reach the point where it will become counterproductive with planning, because teams will then even go down with the goals and do less because of frustration. Yeah. But I think, I mean, we can probably also break it down into a couple of things that are important if you want to integrate OKRs. Which, I mean, please jump in whenever you feel like you missed something or whenever you want to add something. But, I mean, first of all, it would take some time until the company gets used to OKRs. I have never seen someone starting to use OKRs and the first cycle went well, right? Yeah, it's impossible. Also because with, like with every framework, you still need to also find out what works well for your organization and what works well for you. How are you going to track them? How are you going to communicate them? How are you going to align on them? And so on. A lot of important topics. But then it's very important, as we said earlier, to look at what is this vision, right? Like where are we all collectively going? I think that needs to be something clear from the very top on a company level. Like where are we going? And obviously, you need to write them in a way so that they are not a to-do list. We're just like go through and check off the different items that you did or where some executive leader wants to kind of get all his to-dos into the organization. And with that, they should be measurable. It shouldn't be a Boolean, yes, no, did I build this? Because then you're down into the to-do list, right? The vague to-do list, actually. Yeah. So it's like, what are KPIs? I mean, the key results should really have like a measurable aspect to it, right? Is it like growth? Is it retention? How do you measure it? So even the step before of like tracking and having the right KPIs and measurements in place are very important. And I think finally, another important thing, like even if we talk about stretch goals and not aiming to always be able to reach the 100%, but actually like try to reach more, that still comes with focus. And I think just because you're trying to have stretch goals, not everything can be a priority. Like you cannot try to do 20 massive large projects or goals in parallel and justify it with stretch goals, right? So I think those are probably the few things that come to my mind when trying to implement it. I see like two important things. And as you mentioned, so first of all, it's important to take time to establish such a big process within your company. And it takes a year, right? I mean, the first sprint that you're doing when you do scrum is also not perfect and maybe the second and maybe the third and maybe the fourth, even not. So it takes time. And I see, I mean, as you were breaking it down, I think like there are two important levels. So one is the quality of the OKRs, of the OKR itself or the OKRs themselves. And the other one is the whole planning process. And it's actually a long time ago that I mentioned it during our podcast. But I think like one and a half years ago, I was exactly writing two articles about both of these things. And I'm more than happy to link them into the podcast description. So if you would like to see or want to get inspired how I'm approaching it, feel free to look by. Yeah. And other than that, I mean, if you have any questions, you can always reach out to us directly. And by the way, to all our Spotify listeners, there is like a new feature where you can ask direct questions to us. So we're going to add this to this particular episode. And if there is something you would like to know or would like to interact with us, feel free to directly approach us via the Spotify app. Yeah. Yeah. I'm super curious to hear some more detailed questions, right? Because I think that was a bit of a general overview, but OKRs can be very specific. And so any pain points or questions, please shoot them over and we're happy to pick them up in one of the next episodes. Well, with that, I would say, Alex, let's call it a day. Yeah. Take care. Enjoy the rain and see you soon. Bye bye.