The importance of CEO involvement

We spoke to Peter Kerr, a strategy execution and OKR expert, about the importance of CEO involvement in an organization’s OKR program.

Perdoo: 

Tell us a bit about yourself and your journey with OKR.

Peter: 

We started exploring OKR about 3 years ago. We’d been operating our own coaching businesses for many years. We would then collaborate on larger projects when it benefited the client. We’d always been frustrated by the inconsistency in how strategy is executed once a plan had been created and agreed upon. Things always seemed to go wrong at the implementation phase. OKR seemed to provide the structure and discipline we were looking for. We created the Auxin brand and attempted to use OKR for our own strategy. After several frustrating failures we began to see some promising results during Q3. This gave us the confidence to incorporate OKR into how we coached our clients. Once again, this approach started to yield positive results for the companies we were working with. This convinced us that good coaching was vital to a successful OKR implementation. On January 7th 2019 we created AuxinOKR Limited and we’ve had an incredible first year that has seen us taking on projects across the world and with a range of blue chip clients.

Perdoo: 

When we were brainstorming interview topics, you suggested talking about the importance of CEOs being actively involved in their OKR program. Can you explain why this is so important?

Peter: 

Without CEO support and knowledge of OKRs it’s not possible to embed OKR-thinking across an entire organization. The CEO needs to both understand and believe in the value of OKRs. Without CEO backing, OKR becomes marginalised and can end up operating only within certain departments. This is at the heart of what OKR is intended to combat. Even if the CEO’s role is supportive, it is essential for them to have a strong understanding of how OKR works. If they don’t know what good looks like, then poor OKRs are inevitable. People within all organizations look to the exec team for leadership and guidance. By implementing OKR properly at the top, it makes it possible to socialize them across all teams and encourage adoption at the bottom.

Perdoo: 

What does it mean for a CEO to be “actively involved”? What is expected of them?

Peter: 

I would go beyond wanting the CEO to be “actively involved”. The CEO needs to “actively believe” in OKR. OKRs aren’t a fad diet. The CEO should see embedding OKR into how the company operates as a vital step in helping the business realize its strategy and deliver value to all stakeholders: customers, staff, and shareholders.

Perdoo: 

As organizations grow, it becomes harder and harder for CEOs to stay actively involved. Do you have any tips to help them stay involved while so many different things require their attention?

Peter: 

They need to keep reminding themselves why they decided to implement OKR in the first place. Strategic focus, company-wide alignment, a healthy level of ambition and the ability to track progress are the pillars of a successful OKR implementation. Can they still clearly see these pillars from where they are sitting? Their job is to help identify the “big rocks” and then clear a path to allow others to turn these ambitious goals into real world outcomes. When OKR is implemented correctly, it should be an integral part of how the business runs. If the CEO is actively involved in the business they shouldn’t be able to ignore the Company OKRs. 

Perdoo: 

What role should Human Resources (HR) play within an organization’s OKR program?

Peter: 

The simple answer is that the HR department needs to have their own OKRs. What are their objectives? How do they align with the strategic goals of the company as a whole?

In my opinion, it’s a mistake to give ownership of OKR to the Human Resources team. It’s not a training program. OKR is a skill that requires training. Just like software engineers require training. HR facilitates the training but they don’t dictate the technology platforms the business chooses to adopt. OKR is about strategy execution, so the ownership should always sit with C-level execs and their senior managers. 

As organizations of all sizes are looking at alternatives to the ineffective annual appraisal. The concept of continuous appraisal is becoming increasingly popular. The CIPD even use the phrase “continuous conversations”. Anyone who’s worked with OKRs will recognise that CFRs – conversations, feedback and recognition – are integral into making OKRs work well. Therefore, it seems logical to link the replacement of annual appraisals with the adoption of OKRs. Right? 

Wrong! The OKR conversations colleagues will have with each other when discussing the progress of their goals, will be different to those that will shape their future careers and how they feel about their job. If the HR team wants to change how they deliver appraisals, they need to create their own OKRs showing how this change in staff appraisal strategy is fully aligned to the companies values, beliefs and strategic direction. 

Perdoo: 

Thank you so much for sharing your views with us. Is there anything else that you’d like to share with our audience?

Peter: 

The only other point I’d like to emphasise is that OKR is about changing how a company thinks about, and then plans, its strategy. It means learning how to do something new, something that may seem uncomfortable at first. Doing OKR well requires some talent, and lots of effort. In time, it’s possible to create an OKR skill-set within a company, that when used consistently, will deliver great long-term results.