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This month’s updates help you better manage your goals and make it easier to collaborate on them.…
We talked to OKR specialist Roger Longden, about his company There Be Giants, his work with OKR and growth strategies, and his mission to kill off the annual appraisal.
Perdoo: Tell us a bit about yourself.
Roger: I’m 46, no kids (but do have 2 dogs). Love playing lego and going plane spotting with my Godson. 8 years into my “post-corporate” career, which I started as a jobbing coach, and the journey has taken me via Formula One, to the middle of the North Sea and now all over the world with our OKR work.
Perdoo: Tell us a little bit about There Be Giants. What’s the story behind the name?
Roger: I have to give full credit to my old business partner (who has now retired) as he came up with it. We were playing with “Giants” as that implied size, scale, strength etc. But we also wanted a name that implied discovery; the journey to realizing potential. He was reading his son a book at bedtime, the kind which has a map of the kingdom in the inside cover. In the corner of the map, it said “here be dragons” and we just started to play with that…
Perdoo: You’ve said that your mission is to rid the world of annual performance appraisals. Why?
Roger: 3 reasons:
I fundamentally believe that performance management (especially appraisals) lost its way over the past 15 years or so. For many, it’s become a way of generating data (usually grades) which are then used to justify pay, bonus, promotion decisions. The end result is that the process has become more important than the person and the very performance it should be motivating and managing.
Also, appraisals actually undermine performance. Neuroscience is telling us that when we perceive a threat – whether it be social or physical – our brains respond in the same way. This means our mental resources are moved away from essential functions like innovation, problem-solving and lateral thinking, to survival and defense. As appraisals are often such emotionally charged conversations (given that pay, reward etc rides on them) they have been found to be very high up the threat scale. Not great if you’re trying to motivate and inspire!
Finally, I’ve seen time and time again that businesses are generally not great at execution. Sure, developing the strategy and plan is the exciting part, but then actually making it happen is where the wheels often fall off. The primary purpose of performance management is to deliver the business plan, through the alignment of activity and engagement of people. This has been lost sight of and I believe it’s time performance management went back to its roots.
Perdoo: What is it about performance appraisals that most companies get wrong?
Roger: As mentioned earlier, doing them annually (or even bi-annually) means there’s a chance of them becoming a threat-laden conversation, so moving to a more frequent “check-in” based approach significantly reduces the risk of that. Also, due to the immediacy effect, we are better at recalling what happened recently, than a long time ago, so is an annual appraisal really a fair way of reviewing an entire years performance?
It’s also very common for the evaluation conversation to take place at the same time as the “growth” conversation (where career goals and professional development are discussed). These are two entirely different conversations – one looks backward and the other forwards – and require very different mental approaches to be productive. If both are combined to save time, the development conversation always becomes the casualty as attention is naturally drawn to performance evaluation because we want to know what judgment is being made on our performance. The odds of this becoming a “reactive” conversation are high, so our ability to think about what our desired future might be, and to develop goals to meet it, becomes very limited.
Perdoo: Tell us about your journey to discover OKR. What was it that got your attention and made you want to learn more?
Roger: I think you’ve probably realized by now that I’m a big advocate for transforming how performance is managed in organizations. I also had a second challenge I wanted to solve too: improving the execution of strategy in businesses.
I used to work on a programme that was funded by the Government to help drive growth in businesses of up to 250 employees/£40m turnover. We were limited in the tools we could use and, while the strategy development activities were great, the follow through and the execution just wasn’t there. This really frustrated me.
My (aforementioned) old business partner challenged me to undertake some research and write a white paper on an issue which really bugged me! So with both these issues in mind, I sought to answer: “how is performance management evolving and how can it better help deliver the business priorities?”
It was during my research into this that I came across OKRs which I discussed in the paper. When the paper was published, it was picked up by a company in the US who were looking for UK partners to take an early version of their OKR system to market.
Perdoo: A lot of companies starting with OKR ask how to use it in performance reviews, what’s your view on using OKR in performance reviews?
Roger: I believe OKRs have a contribution to make when evaluating performance, but they are by no means the only factor that should be considered. OKR and performance management are not the same things.
Solely judging performance upon achievement against objectives is where “traditional” performance management has failed to actually motivate high performance. OKRs seek to do this by challenging us to really go for that ambitious stretch, even when we are not sure we’ll hit it. If our performance rating will then be based upon us hitting it, then A: we’re not likely to set a stretch in the first place and B: if we are given the stretch which we feel is unrealistic, we’re likely to find a way of avoiding it.
My recommendation is to be really clear on how you define high performance and then build your review and evaluation around that. For example; do you consider someone who has been ambitious yet fallen short, but who has understood why and has rolled their learning into wider shared practice to be high performing? Also, HOW people perform should be taken into account too. There is little point in hitting a target if all the business which is won is ultimately loss-making (I’ve seen this happen) or is at the expense of team morale.
Perdoo: What’s your view on tying OKRs to bonuses or other incentives?
Roger: I don’t believe they should be, not directly anyway. I’m not saying you should pay for poor performance either. As mentioned earlier, I believe this should be based on an evaluation which takes a holistic view of a person’s performance – not just what they have done, but how they have done it and also how they have dealt with inevitable setbacks and challenges which comes with most roles in high growth businesses.
Perdoo: Motivation and engagement are a big part of improving performance, how does OKR help in these areas?
Roger: OKRs in isolation don’t help this at all. Just changing the way you structure your goals from SMART to OKR won’t make a blind bit of difference. What will help is how you structure OKRs across your business and the routines and rituals you use to underpin them.
Dan Pink’s widely respected model of motivation suggests that in today’s knowledge-based economy, money has limited motivational value. If it’s too low, motivation will be absent, however, there is a limit to its effectiveness, beyond which it loses its impact. Pink suggests it’s Purpose, Autonomy, and Mastery which are what gets us fired up now.
OKRs, if given the right structure, can help reinforce these:
A sense of purpose can come from an alignment of lower level OKRs to higher ones so that when updates are made, the impact on the higher level one can be seen.
A sense of autonomy can be encouraged from the collaborative approach I advocate for drafting and agreeing OKRs – i.e. they are not handed down, instead, the higher level ones are provided as the context so that the next level can be drafted, discussed and agreed. I have also seen teams which develop strong OKR check-in routines become 80-90% self-managing as they have required little management to keep them on track.
Mastery can be reinforced in many ways, from the skills in crafting OKRs through to becoming great at the routines which support them.
Perdoo: You also talk quite a bit about OKR as a tool for strategy execution. What one myth about strategy would you love to dispel and why?
Roger: It doesn’t have to be complex. It’s often made out to be some overly sophisticated activity which only the few can be involved in and understand.
The best strategy is one which is – while well reasoned and thought through – simple to understand. You want people to engage with it, you want it to have an influence on what people do and how they spend their time. Keep it short, sharp and clear and you’ve got a better chance that will happen.
Perdoo: If you were to give one piece of advice to someone starting out with OKR, what would that advice be?
Roger: Routines. Make sure you get your check-in and quarter-end routines established so OKRs don’t become “set-and-forget.” You can even get by in your first couple of quarters with an average (in terms of how their drafted) set of OKRs if your routines are in place.
Make sure that retrospectives are built into OKR routines. This helps to ensure you’re regularly reflecting and learning so that the quality of your OKRs will improve with each passing quarter.
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