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Every organization wants to grow. Growth is not something that magically happens. It’s the result of carefully designed strategies that are successfully implemented.
OKR is the perfect tool to translate your organization’s long term strategy into short-term goals for teams and individuals.
The reality is that 9 out of 10 organizations fail to fully implement their strategies. In 70% of these failed cases, the problem isn’t bad strategy, it’s bad execution. As it turns out, implementing strategy (and realizing growth) is complex.
Why HR shouldn’t run your OKR program
Don’t get us wrong, we truly admire HR people. Within every organization, people are the most important asset. And managing this asset well is challenging (why else do you think corporates are so excited about robots, automation and AI). A good HR team, therefore, is an incredible asset. They not only help you attract and retain the right talent, they also help create a culture in which they can thrive.
However, since HR is focused on people, there’s one thing that they can’t be in charge of: OKR. You see, OKR is a tool for (business) growth. OKR is about the organization—not the employee.
Within the field of growth, an employee is a resource needed to achieve an OKR. That resource (the employee) needs to be managed well, and HR and HR software help with that. One such HR software is a people management tool (see “People management” section below).
Who should run your OKR program instead?
In each and every organization, the CEO is responsible for designing the strategy—but also accountable for the successful implementation of it. After all, a well-designed strategy has little value if it isn’t delivered on time. If the CEO fails to deliver the strategy, the owners of the business will eventually start looking for someone who can.
OKR, therefore, is not a fancy HR gadget—it’s a critical tool for CEOs and executives to help them deliver their strategies and accelerate growth.
To make this happen, the CEO will have to make sure that his or her strategy is translated into the right KPIs and OKRs for teams and individuals. And they would want to make sure that — for the most part — the goals are achieved. The only way to ensure this is for CEOs to be heavily and actively involved in the OKR program.
Now that we’re on the same page, let’s talk about what people management and business growth are all about, and what makes them different:
People management tools enable you to do things like performance reviews, eNPS surveys, and keep track of career paths and personal development. Things that you need to take good care of your employees. (Existing HR and HRIS solutions like BambooHR, SuccessFactors and Workday often also have such functionality built in.)
Some people management tools have recently added OKR to their product. Unfortunately, they make OKR all about the employee and—put euphemistically—making sure he or she performs well.
Some say that the combination of OKR with performance reviews is powerful. But that’s nonsense. Almost every OKR expert will tell you not to tie OKRs to performance reviews. As Google’s Rick Klau wrote: “OKRs are not synonymous with employee evaluations. OKRs are about the company’s goals and how each employee contributes to those goals. Performance evaluations—which are entirely about evaluating how an employee performed in a given period — should be independent from their OKRs”.
Performance reviews also always run after the facts. Once you’ve figured out what the right executable OKRs to focus on are, you want to be sure that everything is being done to achieve them. A performance review doesn’t help with this as it always reviews the past (here’s what you should do instead).
The components of growth are strategy, goals, and people (Perdoo brings these three components together in one place).
Business growth is a completely different topic than people management. Business growth is about your organization. It’s about mapping your strategy, so that you have a clear roadmap to success that everyone in the organization can access (after all, you need the support of all employees to successfully deliver your strategy). It’s about aligning your resources behind your strategy, and empowering your employees to focus on the outcomes that will deliver the strategy. Strategy delivery is about creating overview and accountability, so that you can see how everything and everyone is progressing.
HR can play an important operational role within an OKR program. They’re often great Ambassadors: they educate everyone in the organization, make sure everyone sets their OKRs on time, and so on. But they shouldn’t be in charge of OKR.
OKR (and a solution like Perdoo) are critical tools for executives to help them with their core responsibility: delivering the organization’s strategy. They can’t afford to outsource that responsibility to HR.