How OKRs can help organizations reach their goals

The goal management framework: Objectives and Key Results (OKR)

OKR was adopted at Google in 1999 and has since become widely known. Companies such as Spotify, Twitter, LinkedIn, and Airbnb are also known for using OKRs.

"Agile" has long been one of the biggest buzzwords in business

"The problem is that many seem to think being Agile means responding to everything, which leads to far too many balls in the air at the same time."

John Hagel is the founder of Deloitte's Center for the Edge, a think-and-do tank that produces new insight at the edges of emerging technology and new forms of organizing, and helps senior leaders put that insight to work.

Senior leaders often end up with a reactive strategy as pressure and the pace of change increase. Many leaders appear to believe that as long as they respond quickly to what happens in the market, things will work out. The organization accumulates a large portfolio of initiatives, creating a false sense of security: if one initiative fails, there are many others to fall back on.

The problem with this approach is that everyone ends up doing too much, and resources are spread too thin. Leaders must dare to choose, Hagel argues.

Humans are not particularly good at multitasking. We perform worse when we have too many different things to do, or when we try to do too many things at once. Despite the fact that prioritization and focus are central to Agile thinking, large organizations often do not bring Agile practices up to the leadership level. Many leaders also overestimate their own ability to multitask.

Andreas Klein, Deloitte partner and Agile expert

Deloitte's Center for the Edge uses OKRs

Center for the Edge uses OKRs internally, and Nordic coordinator Daniel Sunde-Hansen is an enthusiastic advocate. He believes OKRs have made it easier to focus, including stopping activities that do not lead to the desired outcomes.

OKRs have enabled the team to "kill darlings": activities assumed to be necessary, but that do not actually produce the intended result. The OKR process supports objective, constructive discussions where the group evaluates activities in light of long-term goals.

Daniel Sunde-Hansen, Nordic coordinator for Deloitte's Center for the Edge

"It can be painful. Focus hurts in the short term. But new growth is also about freeing up resources to invest in what has the greatest long-term potential."

How OKRs can help organizations reach their goals

In many organizations, employees receive goals and KPIs focused on increased revenue or efficiency, often both at the same time. Many leaders struggle to enable goals focused on creating long-term value.

Center for the Edge has researched a class of goals they call "High Impact Challenges", challenges with the greatest potential for impact, learning, and sustainable improvement. This type of goal is also used in their OKRs.

Which value-creating initiatives can be brought from 0 to 1 quickly? Which experiments with new approaches will increase organizational learning? Time spent exploring such challenges should not be seen as a cost, but as an investment that builds capability.

Many employees do not have a clear understanding of top leadership's goals

By holding frequent reviews of long-term goals, desired outcomes, and activities, teams can reflect on immediate feedback and experiences and apply lessons to the next iteration quickly.

Many leaders do not seem to understand how individual goals contribute to organizational development. At the same time, many employees feel they do not understand leadership's goals or what to focus on. Leaders must be role models and demonstrate that they understand why individual goals matter, and OKRs can help, Sunde-Hansen concludes.