The difference between Metrics, KPIs ...
I read a lot about goals and it has always annoyed me when people use the terms…
Nicholas A. Stanforth is a consultant and progress coach who focuses on established SME and large corporate clients across Europe and the United States. Focusing on performance enhancement, team engagement, and innovation, he has helped many organizations run a successful OKR program.
Watch the video interview or read the transcript below.
Tell us a bit about yourself and what you do.
Well, obviously I’m an OKR consultant, otherwise we wouldn’t be having this conversation today. The reason why I started getting more and more interested in OKR when I found out about it five years ago was that it totally resonated with the way I’ve been working. I come out of an Engineering, Project Management background, I ran a company for eight years, and I’ve been consulting on Lean and Project Management. I’ve always said you can’t do those things if you don’t have a strategy and if you don’t involve your team.
One of the great benefits of OKR is getting teams focused on strategy and making people feel like winners. I call myself a Progress Coach because I get frustrated when we’re only moving around in circles instead of going forwards. I like to think that I help people to love their job. That’s my Ultimate Objective. At the end of the project, people I worked with should say: this has been worthwhile, and now we’re getting more involved in the sensible stuff that’s helping us to do a good job.
OKR is popular with startups, why should large companies be interested?
OKR became famous for helping startups because startups need structure. Shawn Carolan once said: “Startups don’t starve of ideas, they drown in them.” That’s how OKR helps a small organization that’s getting started. If we look to an established company with a few thousand employees, than this is exactly what we’re trying to tap into with OKR. An Objective is the value, and it’s the dream that we’re trying to make come true. The Key Results are the things we have to achieve to make that happen. Focusing on the value and what we’re achieving takes us away from an output mindset.
At the start of workshops, I generally ask people “What do you want to get out of this training workshop?”, and people come up with things like “I hope OKR will make us work faster.” OKR won’t make you work faster. It will make you be more effective, and that’s what it’s all about. Working hard to feel good about yourself is what holds large organizations back. Often we’ve got scary bosses who are the ones that are creating a culture like that. OKR will help the scary boss realize what will really benefit themselves, their career, and the company they’re working for. It’s about outcomes, not output.
What challenges can OKR help solve?
When your company becomes successful, it will get to a point where people are not as hungry anymore. At the point where you’re successful but not that successful, the buzz goes away. I deal with companies of lots of different sizes, from lots of different branches, mainly established companies. Often they have been through a period of growth, and they haven’t concentrated on sticking together as a team and aligning themselves. What you’ll find is that you’ve got departments working against each other. You’ve got people working in parallel on the same things. You’ve got KPIs that aren’t helping each other. You’ve got a lot of different departments that aren’t really gelling together as a company, and that’s something that stops them really fulfilling their potential.
I think there’s a direct correlation between success and motivation. The more success you have, the more motivated you are. If your company is nearly bankrupt, you’re motivated, and that little bit of success you have to avoid bankruptcy gives you a great buzz. After that, when bankruptcy is not a threat anymore, when you’re just in the middle field, then you’re not feeling successful, you’re not motivated. When large companies have been successful, then they tend to forget about aligning themselves, and that’s where OKR helps.
How do you start an OKR project?
The first thing you need to do is to tap into what motivates people. At the start of a project, I invest some of the time in interviews with the staff. I just sit down with people for an hour and see where they’re at. You’ll find that every company is made up of a lot of people who would really like to do a better job than they’re currently doing. However, there are certain pain factors, certain things that are holding them back, so you need to actually find out where the company is at.
What’s really important if you want to implement OKR is that you get some proper training about what OKR is. Otherwise, people tend to implement it, and it becomes the next problem on top. OKR should be the solution and not the problem.
After the training, what I like to do is come back a couple of times throughout the quarter to just touch base with them, to find out how they’re getting on, to take away any initial issues they have, to give them some training at the end about how they’re going to close the quarter, and then to come back and support them on the all-hands stuff. That’s the way an OKR project generally kicks off.
What are some of the common challenges when starting with OKR?
One of the challenges is not really understanding what OKR should do because it sounds like another tool but it’s not. Trying to get people to understand what the real benefits are is difficult. You will always have people who are more skeptical and people who just run and do things straight away. Both of these groups are just as dangerous as each other. The skeptics don’t want to see the value, and the other people believe they have seen the value and start running towards the wrong thing. It’s really about making sure that people do the whole job. If you implement 90 percent of OKR, it’s like pushing a bicycle. You have a great tool but it will feel like extra work. That’s one of the main issues that we have to deal with.
One of the other challenges is setting stretch goals or moonshots. People talk about scary goals, and I think that’s very detrimental to the project. Instead of talking about a scary goal, I like to ask people “What are you dreaming of achieving?” If you compare it to your private life, I don’t think anyone sets realistic holiday targets. Have you ever said “One of my targets for this holiday is that I’m going to pay five euros for a coffee, and I’m going to spend four hours in a queue, or I’m going to be delayed for three hours at the airport.” That’s realistic but nobody dreams of that. If we thought about the pain we have on holiday, we wouldn’t go, we would stay at home.
Winners look at the goals and not the hurdles. That’s something that we really have to work on. I think it helps to ask people “What are you dreaming of achieving in the next three months? What would be a great status to get to in the next three months?” That’s how you define an Objective.
What outcomes can people new to OKR expect?
The first thing that OKR does is it shows you how much potential you’ve been missing. That’s actually a really positive experience. You’d expect it to be painful but when you realize you can actually achieve a lot more things than you expected, then it’s very motivational for people. What then tends to happen is that OKR starts teaching you where the areas are where you need to change and slightly improve things. If people are having inefficient meetings, OKR will help them recognize that. If people are not setting clear goals, OKR will help them recognize that. If companies are setting clear goals but they’re not delivering on them, OKR will help you recognize that.
It’s really interesting to see that each company using OKR has its own personality just like we all as people have our own personalities. I’ve got one customer, a team of 180 IT people, and they all keep talking about the green area of the brain and things like that. They don’t like to set stretch goals and moonshots but they are great delivery. I’ve got another customer working in the media branch. They’re great on set in moonshots but the delivery is the difficult bit for them.
Everyone has their own little challenge but OKR makes those challenges transparent and gives you a method to work on it. You don’t just find out where I need to improve, you find out how to improve at the same time.
How long does it take for OKR to have an impact?
Most companies work on a quarterly basis with their OKRs. Your first quarter is really about finding your feet. People often say “Oh, this sounded so simple.” It’s just like watching people swimming. It always looks simple, you try and do it, then you realize the challenge.
Generally, within the first two quarters, people realize where the benefits are. Most people get it in the first quarter. Some people need two quarters to see the benefits. When you get to half a year, then you’ll see where the final challenges are, and that’s where it’s worth doing a little OKR audit for yourself. Just look back at how you were trained and think about what you actually missed out from the training because that’s probably the thing that’s holding you back. As I say, doing 90 percent of OKR is like pushing a bike. It’s like having a great tool but it’s giving you extra work. If you’re pushing a bike, it’s not going to help. You need to sit on it by using it properly. That’s the same with OKRs.
When it gets to about a year, people are living it. They are not concentrating on the process anymore, they’re concentrating on the content. OKR is a garbage in garbage out system. OKR is just a framework. It’s the toolbox for all your other tools. You can use it to be innovative and for lots of other things. If you concentrate on the toolbox and not the content, then you’re not going to get the best results out of it. After a year, people know how to do their alignment and they get much better results. That’s where it really takes off. You get results in the first time but after a year things are really excelling.
What common mistakes should companies avoid when implementing OKR?
One of the first ones is that they look at OKR as a Continual Improvement Process, which it’s not. OKR is about innovation. The way we innovate with OKR is by setting ourselves goals that we believe we can’t achieve because it makes us attack things in an innovative way. Innovation is just about finding a new solution to an existing problem or using an existing solution to solve a new problem. You won’t do that by doing what you’ve done in the past. I’m a big fan of Continual Improvement Processes, and you can use OKR to accelerate them.
Don’t just replace CIP with OKR and think that you doing the same thing. Set yourself a goal that it really is a stretch goal. Try and really use it for more than just one OKR in the first quarter. Certainly, I’ve made mistakes as a trainer in the past, saying to people “Let’s just start with one” and then people get so scared about going to two or three or four or five. I’d rather you do five bad OKRs in the first quarter and one great one. OKR is not about perfection, it’s about delivery and adding value.
What’s the benefit of using dedicated OKR software?
The obvious big benefit of OKR software is the transparency. If I start doing OKR with a very small team, then I’ve got a very simple Excel spreadsheet that we work with, and that’s great to get started. Yet, even in a small team, when you get to the second or third quarter of using an Excel spreadsheet, people scream at me for the lack of transparency.
OKR is about interaction. That’s where Excel sheets really find the limits because the interaction and the transparency is just not supported by that. Even if you hang them on the wall, which I’ve done in projects where we printed them and did everything by hand, it’s just a different thing. And in this day and age, we want to use an app and to check in, being able to give an instant answer.
It’s really important to track what you do with OKR. Some people shy away from it but it’s not about writing a diary, it’s just a quick log book. Being able to log updates quickly in a software is so fantastic. Being able to then share that with other people is great. Being able to see how the people getting on with their OKR work and then being able to ring them up and ask about a specific issue is great as well. The whole collaboration is on a totally different level with OKR software.
Born in the UK and having lived in Germany since 1999, Nick Stanforth helps people to love their job. Since 2009, he advises both large PLC and family-owned SMEs on how to deliver their targets.
Nick consults Strategy, Project Management, and Lean, and has set himself a personal stretch goal every year of his business life. He has learned that new innovations are to be found in approaching new subjects and thus challenging one’s own limits, so the move to teach OKRs and accompany OKR transitions was a natural next step for Nick.
You can find out more about Nick’s approach by visiting his free advice App at www.PocketProgressCoach.com, which he programmed and wrote himself as part of one of his yearly objectives. Or see his newest stretch goal results on his Vimeo Channel.
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