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Common OKR Misconceptions

Most managers I’ve interacted with, especially at startups, proudly proclaim they use OKRs, i.e. best practices in goal setting. Google uses them so obviously now that we use them, we’re ready to be the next Google.

Unfortunately, 99% of the time, OKRs are not being used correctly. The best way to start learning about OKRs is to read the book Measure what Matters by John Doerr. John Doerr is a famous Venture Capitalist worth over 12 billion dollars thanks to savvy investments but more importantly, providing startups with the right strategic guidance. I implemented OKRs across the Airbnb APAC regional and local offices in 2020 and have some experience in where teams go wrong with OKRs,

Where do most companies go wrong with OKRs?

OKRs are not meant to be tools to gauge how your team is performing. They’re not meant to keep everyone in check. They’re not supposed to create fear.

When OKRs are done right, they create focus. Everyone on the team knows what is most important for them to accomplish as a team and as an organization. When I was at Facebook in 2012, after we went public, the stock price fell by 50% and we realized that as a company, we needed to generate mobile revenue because mobile was where the world was headed. Newsfeed ads were created and released in a remarkable amount of time and every single team and individual was told that optimizing for mobile and generating revenue of newsfeed was critical to signal to the market that we had a mobile strategy as a company. I was the only account manager for Facebook’s large advertising clients in India and I remember working with my Client Partner (sales) to pivot everything we did to newsfeed. Our revenue reports showed newsfeed, we were armed with all the content required to sell newsfeed, beta tests were run, case studies were generated and suddenly Newsfeed was a key part of our advertising strategy and revenue. The whole company corralled around this. Imagine the number of functions that needed to pivot to create this focus. Engineers on advertising needed to create the newsfeed ad product in collaboration with the newsfeed engineers, policy needed to create policies to protect the customer from too much noise, designers needed to develop the UI/UX of this product, marketing needed to create the material to see this product, ad operations needed to partner with policy to review these ads, monetization had to determine pricing, customer service needed to learn how to deal with commonly occurring questions and sales needed to sell.

OKRs done right create focus. Focus ensures all of your teams move with speed AND direction. OKRs done right also create experimentation and a focus on results and impact vs. on busy work.

What are OKRs

OKRs stand for Objective Key Results. The objective is what you’re trying to accomplish and is a goal that stands true for multiple quarters. The key results are the activities you’re going to undertake in order to hit your objectives.

Example: My objective is to make a million dollars as a coach annually

My key results are what I do to achieve my objectives. My key results may differ from quarter to quarter. That’s a good thing. We experiment on our key results. For example, my key results to achieve this objective in Q1 may be -

  • Write 100 articles on management, self and decision making

  • Create a social media presence averaging XX likes, YY comments and ZZ shares on LinkedIn

  • Speak on 5 virtual panels across the world.

  • Get in touch with a publisher to understand steps to publication

My Key Results lead to me hitting my Objective. If I get my key results right, I will hit my objective. This gives me a combination of a to do list and a list of assumptions I need to validate. What does this mean? Every key result is an Assumption. I need to validate if it will contribute to hitting my Objective.

Here, my key results are focused on branding, content creation and preparation for some sort of book publishing with the assumption that by doing this, I will generate clients.

After I reflect at the end of Q1, I may realize that branding is important but it is as important to meet corporate clients. In which case I may add a key result of “Conduct conversations with 5 potential corporate clients in YY segment” in Q2.

I may realize that generating a million dollars requires income to flow in in the next quarter in which case a key result may be “generate 200K in sales in Q2”

Key results are a mix of Outcome goals and Process Goals.

An outcome goal is “Generate 200K of revenue in Q2”. That’s the outcome I want and I may achieve it in different ways. A Process Goal is “Meet 5 corporate clients in Q2”. This process goal may lead to the outcome goal of 200K in revenue.

Every Objective should have 3-5 Key results associated with it per quarter and the key results can be a mix of outcome and process goals.

When should you use an outcome goal vs. a process goal?

When you’re doing something for the first time or there is a lot of ambiguity e.g. COVID, a process goal is more in your control and is the best way to proceed. When you’ve tried and tested different methods and have some expertise, an outcome goal may be the way to proceed.

If you’re implementing OKRs in your organization or in your team, feel free to reach out to schedule a workshop on effective OKRs. Prices start at $5,000USD for a half day workshop.


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