Introducing Evolutionary OKRs
Today, we take a step back and answer the obvious question: what are Evolutionary Objectives and Key Results (OKRs) and why are they important?
OKRs are a method for setting collaborative, objectively measurable goals made popular by the book Measure What Matters, which creates enormous excitement about the potential of OKRs, but leaves many teams and leaders frustrating trying to figure out how to implement them.
This episode introduces the Red Currant Collective brand of OKRs: Evolutionary OKRs. Evolutionary OKRs are designed to create meaningful change and help organizations transform and actually do better. Tuning in, you’ll hear about how OKRs started and how they became widely used before we break down the differences between Evolutionary OKRs and other forms of planning. You’ll learn more about the characteristics of great OKRs and how they can benefit both corporate performance and individuals. We further discuss the differences between Objectives and Key Results, the qualities of strong Objectives, what we consider "Textbook Key Results," and examples of both. If you would like an introduction to OKRs to share with your colleagues, your leaders, and other stakeholders, or even just a reminder of the basics for yourself, this episode is for you!
While you’re here, would you like a copy of
The Evolutionary OKRs Playbook?
We're nearing our second Beta release of our new Evolutionary OKRs Playbook, but you don't have to wait to get a sneak peek.
This free download is a draft excerpt from the manuscript in progress that includes only the essential pages to help you learn essential words and meanings of Evolutionary OKRs, see examples of completed OKRs, and gain early access to some of our draft worksheets to help you form your own OKRs.
Key Points From This Episode:
An introduction to what OKRs are and how they became widely used.
The benefits of OKRs for individuals.
Differences between OKRs and other forms of planning.
Characteristics of great OKRs, starting with why they should fit on a page.
Why objectives are directional and key results are measurable.
An example OKR cadence for an organization.
Defining objectives, the qualities of strong objectives, and some examples.
What “watermelon metrics” are and how measurable key results can help us avoid them.
A definition of key results.
What “textbook key results” are, why we aim for them, and a few examples.
How you can find out more about Evolutionary OKRs.
Tweetables:
“In addition to being a collaborative goal-setting methodology, we think of OKRs as a thinking, deciding, and learning practice that helps us achieve greater growth, transformation and innovation by aligning on our most important measures of progress and success.” — @saralobkovich [0:05:36]
“Evolutionary OKRs mean thinking deeply about what's important and what might be possible. Identifying which measures of progress and success help us make better decisions in our work and organizations.” — @saralobkovich [0:05:54]
“OKRs let us define our own success and progress measures even when external expectations aren’t clear. They help us focus on what's most important, not only what's urgent.” — @saralobkovich [0:06:27]
“Think of objectives like strategic or visionary pillars. Added together, they describe what's most important for us to make progress on so that we are moving toward achieving our strategic priorities.” — @saralobkovich [0:12:48]
Links Mentioned in Today’s Episode:
EPISODE 08
[INTRODUCTION]
[00:00:04]SL: Welcome to the ThinkyDoers Podcast. ThinkyDoers are those of us drawn to deep work, where thinking is working. But we don't stop there. We're compelled to move the work from insight to idea, through the messy middle, to find courage and confidence to put our thoughts into action. I'm Sarah Lobkovich and I'm a ThinkyDoer. I'm here to help others find more satisfaction, less frustration, less friction, and more flow in our work. My mission is to help changemakers like you transform our workplaces and world. Let's get started!
[EPISODE]
[00:00:45]SL: All right friends. It is the beginning of March. We're here -- the time between December and the end of February is the busiest time of the entire year for me as an OKR coach, someone who works with organizations, implementing OKRs. I will just say the last couples of months have been bananas! It's great, though. We've got really exciting clients that we're working with making fantastic changes in their organizations. There's no complaints, but the podcast volume, maybe next year, I'll plan ahead and can some episodes for that busy phase, because it is so important. This is the time of the year when you all probably need help getting your OKRs going to set the year up for success.
Today, I'm going to share with you the audio of a video training that we are just about to get released via our LMS for self-paced learning. I'm also going to share some snippets of this via our Red Current Collective YouTube page. But if you want the sneak peek right now, here's the audio. This is finally me taking a step back and going back to the beginning of answering the question, what are OKRs and why are they important? Here I also take some time to explain how and why we do things differently here at Red Current Collective.
This version of this podcast is a great one to share with your colleagues and leaders. Between you and me, I'm probably also going to do an unplugged or informal version, maybe even Mystery Science Theatre 3000 style, where I give you the dish that isn't in the official version, but that one's going to take me a little while to prepare. So for now, here's the suitable for work version that you can share with your colleagues, your leaders, other stakeholders. If you want to give them an introduction to evolutionary OKRs or objectives and key results that are designed to actually, meaningfully, make change and help organizations transform and do better.
Before we dive in on today's episode, though, I did want to share a URL with you. We have so much happening right now. We have new trainings going live. We have new platforms for trainings going live. I've got our evolutionary OKR playbook going out to beta readers, as we speak. We're getting ready to launch another cohort of our No-BS OKRs three-day course. We're going to do a special cohort of No-BS OKRs, specifically for people who are job-seeking or who are in career transition.
To get the dish on all of those upcoming opportunities to learn with Red Current Collective, I'm going to give you one URL. You can go to findrc.co/waitlists, W-A-I-T-L-I-S-T-S. Just sign up there, findrc.co/waitlists. I'll send a message out to just put everything that's opening up for waitlisting in one message. Okay, now let's get into the meat of this and dive in on our introduction to evolutionary OKRs.
Welcome to this introduction to OKRs. I'm Sara Lobkovich, the creator of Evolutionary OKRs. I'm a former strategic executive, non-practicing attorney and current OKR activist, whose passion is working with clients, and tackling transformational change. Objectives and key results or OKRs, are a collaborative goal-setting practice that evolved out of Peter Drucker's Management by Objectives. OKRs were popularized by John Doerr's book Measure What Matters. Based on the excitement Measure What Matters creates, thousands of organizations around the world have adopted OKRs.
Some have succeeded -- like Google, Intel, and Microsoft. Others, there's been some report of struggle. Spotify is an example. Based on work with thousands of clients in hundreds of organizations, we've evolved a more efficient, coherent and results-focused approach to the OKR methodology, and that's what we call evolutionary OKRs. In addition to being a collaborative goal-setting methodology, we think of OKRs as a thinking, deciding, and learning practice that helps us achieve greater growth, transformation and innovation by aligning on our most important measures of progress and success.
Evolutionary OKRs mean thinking deeply about what's important and what might be possible. Identifying which measures of progress and success help us make better decisions in our work and organizations. Curiosity, experimentation and even failure help us learn how to improve and grow.
Now, we typically hear about the benefits for OKRs in the context of the organization and senior leadership, but OKRs have big benefits for individuals and organizations. OKRs let us define our own success and progress measures even when external expectations aren’t clear. They help us focus on what's most important, not only what's urgent. Fitting our OKRs onto a single page reduces the risk of “If I can't see it, it doesn't exist” that happens with a lot of other strategic planning artifacts. OKRs help us retrain our brains for our reward centers to activate not only when we tick a box completed or when we win. And not only grieving when we lose. OKRs help us have our reward centers light up when we complete a task, when we win, when we experiment and learn something, and get curious and make progress. And last, OKRs put us in a position to do less mind reading and reduce the cognitive overhead that we might have been doing now trying to figure out what's important.
What's different about objectives and key results compared to other forms of planning?
First, let's take a look at how a lot of organizations strategize and plan today. Many organizations have their durable strategies in the form of their mission, vision, and long-range strategic plan. It is often an annual plan or annual operating plan that might be budget-based. And then our teams plan in a mix of strategic and tactical levels, often not in alignment with each other. Some get right to planning their activities and everyone's planning in different activity planning system.
If we think about this as a stack, we've got our durable strategic elements at the top of the stack and then down below, we have that activity suit and the team planning that we already looked at, but that leaves us with this gap in the middle where we might be hoping, trusting or wishing for luck that our strategic goals are going to connect with our implementation and vice versa. It also might depend on assumptions we might see spin or positioning. We also might see a lot of risk as a result of this gap.
Then in a worst-case scenario, we see teams perhaps avoiding bringing up issues or making decisions based on bias. Instead of data, it leaves us with a confidence gap over how do we know our activities will add up to achievement of our most important outcomes. And the financial focus gap where our metrics might be very financial and revenue-focused. But if I don't sit in sales or finance, how does my work connect to those measures?
[09:14]Then we also have a subjective-objective gap. With a planning stack like this, we have a little objective data to run the business based on as we move through each quarter. This form of planning is very common.
There is a better way and that's to connect our strategic step. That means we do have those durable strategies, but we don't go straight from there to our activity planning. We have a layer in between where we define our objectives and our key results. Those are our stretch goals. They help us describe what success means and how we'll know when we're making progress.
Some organizations also use the construct of ‘commit’, which are goals that must be achieved 100% or there might be consequences. Those are distinguished from our key results, because typically in our objectives and key results, we're setting stretch goals, so we are safe to try and even fail on our objectives and key results in the pursuit of growth and progress.
Then we plan our work. We plan our activities so that our most important initiatives are identified in the form of key initiatives. Those are the initiatives that describe how we achieve our objectives and key results. When we connect our strategic stack, what we have is clarity and focus about our most important business measures of success and progress. Then we can align what we do, the activities we plan, to be maximally designed to help us achieve our actual strategy.
What do OKRs look like? Completed OKRs at the company level might look something like this: “We aim to have no more than three to five objectives and each objective typically has between three and six key results, although we want to keep our key results really focused, it's not a bad thing to only have a few.”
Let's look at the characteristics of great OKRs: Number one: they fit on a page so we can see them, we can keep them top of mind, and we prevent the issue or risk of, “if I don't see it, it doesn't exist”, when our plans live in decks and systems. Our objectives are directional. They're usually not measurable and they have a connection to a clear theme. The themes help with alignment as key results move throughout the organization. Our key results are measurable. Key results are where we agree on how we're going to measure success and progress.
At the company level, our OKRs are typically communicated annually, sometimes with the quarterly target. At the team level, OKRs are typically communicated quarterly, even if teams set annual goals elsewhere to be able to work back to their quarterly key result.
Let's dive a little deeper and look at objectives and key results in a little more detail. What is an objective when we're talking about OKRs? An objective is a directional statement of shared purpose that describes what we're pursuing together and why it matters. It helps our objectives when they have an identified theme or themes so that some teams can align to the objective theme, even if they don't align to the exact language of the upstream objective. Think of objectives like strategic or visionary pillars. Added together, they describe what's most important for us to make progress on so that we are moving toward achieving our strategic priorities.
The strongest objectives describe their why in human terms. Why is this important to the most important stakeholder? When the why behind an objective is because, “we're a business and we need to generate revenue”, that objective may be inspiring to some people but might not help other people understand the purpose of their work.
The strongest objectives are useful. They're short enough to be memorable and when we run into a conflict or difficult decision, we can look at our objectives to break ties or help us decide how to move forward.
Let's look at a couple of examples. “We've got a people and culture objective of high satisfaction talent creates an inspired product that helps our users create brighter futures.” Here's another example for a more executional part of the business, because this company has a major product launch coming up. “The objective around that key initiative is that new product 2.0 launches with a customer experience so delightful our users can't wait to tell their friends about it.”
Now that we know what objectives are, let's look a little closer at why key results are important because key results are really what's unique about the practice of OKRs. But first, why do we bother writing measurable key results? We work hard to write measurable key results because we want to eliminate a common issue that occurs often that the OKR community calls watermelon metrics.
Watermelon metrics are where we have a performance measure or progress measure that gets reported as green subjectively all quarter. Then when we get to the end of the quarter, we turn red on the ultimate result. It's green on the outside, red on the inside. This happens when, for example, we're estimating our progress subjectively as a percentage complete on a project. We might hear green reports all quarter and then we get to the end of the quarter and it's, “Oh no, we're going to miss our release. We're in the red.”
Watermelon metrics happen for all sorts of cognitive bias reasons and behavioral reasons, but they tend to happen when we're subjectively assessing our progress. We work hard to replace subjective estimations of progress with objective progress measures to reduce the risk of our outcomes turning watermelon. Measurable key results also let us respond to risks and changing circumstances faster due to better progress data. There are again a host of cognitive biases that keep us attached to the activities we plan, whether or not they're actually leading to progress on our most important success measures.
We want to eliminate the confidence gap that we talked about earlier and without objective measures of progress to help us know whether we're on or off track, we might find ourselves projecting confidence and attached to projecting confidence instead of being confident based on information and data. That means we might miss chances to identify and address blockers or make necessary plan shift.
What are key results? Key results are our most important objective measures of progress and or success during a given time period, which is usually annual at the company level with some quarterly targets, and usually quarterly at the team level. They reduce our reliance on mind reading and reduce the risk that will have continuously moving goalposts. We can set our KRs and then work toward them and learn as we go. We use them to agree on what's important for us to achieve before we begin work. Objective measurements give us data to make important business decisions based on and our key results are presumed to be stretch goals unless they're clearly labeled as ‘commit’. With stretch key results, we're safe to try and even fail in the pursuit of learning and progress. It's only our commits or committed measures where we must achieve 100%.
Our key results are objective measures that clarify how we'll measure success and how we'll evaluate progress objectively. They may be leading indicators and leading indicators may be as important as outcome measures, so we do think about both, those leading measures and our most important outcomes.
In the evolutionary OKR model, we work to write our key results as textbook key results wherever possible.
Textbook key results are formed like this: With an increase decrease or improve as the verb clarifying our metric of focus, stating the change that we're aiming for, and then including the from and to with our starting value and target value. An example of a textbook KR is increased customer retention by 10% from 60 to 70%. Then you'll see in the examples on the right that they're all examples that show key results in that textbook form of increase, decrease or improve a metric of focus by a percentage from a start value to a finished value.
All right team, now that you've learned the basics of objectives and key results, here are a couple of additional places you can go to learn more. We have a newsletter at findrc.co/subscribe, that you can opt into to receive emails from us with helpful tips, resources, and reminders throughout the year to keep your OKR's fresh and top of mind. You can also find tons of learning about OKRs goal setting in general, goal attainment, and factors that support goal attainment including motivation, flow, organization behavior, and leader and self-leadership development to drive high-performing organizations on the ThinkyDoers Podcast and blog.
If you want to learn more about OKRs by actually creating them yourself, I host a one-week cohort-based course on maven.com called Achieve Change with No-BS OKRs. In that course, participants start the week with a blank sheet of paper and end the week with a completed set of OKRs with as little as three or four hours of in-class time. You can find out more about that at findrc.co/nobsokrs. Also, find out if your organization has an OKR centre of excellence or ask around for other people who are working with OKRs in your organization. If they're not familiar with evolutionary OKRs and my work, please point them in my direction. I'd love to help.
Thank you so much. I hope that this has been helpful for you in establishing a new understanding of the power of evolutionary objectives and key results. Drop me a note if you have any questions. My email is sara@redcurrantco.com. I look forward to seeing you set and achieve ambitious, exciting results-focused goals for the upcoming quarter.
[OUTRO]
[00:20:49]SL: All right, friends. That's it for today. Thank you for joining and listening. I really can’t wait to hear from you about what in that intro resonated, where you got stuck or confused, and remember that's always on me, not you, so I would love hear your feedback. Don’t forget to pop over to findrc.co/waitlist, if you want the one e-mail that includes everything that is about to launch around here so you can hear about everything all at once.
If there's anything you have questions about, you can find me at Sara Lobkovich, pretty much everywhere. I'm pretty sure I'm the only one. It's S-A-R-A-L-O-B-K-O-V-I-C-H. No, nothing here is easy to spell. I’m sorry. I'd be thrilled to have you as an email subscriber for infrequent more formal, just business messages. You can subscribe at findrc.co/subscribe. I also have a more personal list that takes side trails into topics around well-being, mental and emotional health, and my motorcycle racing life and other serendipity at saralobkovich.com.
You'll find a shortcut to the show notes for today's episode via thinkydoers.com. You’re always invited to drop me an email. The easiest one to spell is sara@thinkydoers.com. If you've got other ThinkyDoers in your work world, please pass this episode along. We really appreciate your referrals, your mentions, your shares, and your reviews. Thank you for tuning in today and I look forward to hearing the questions that this prompts for you.
[END]