While setting Objectives and Key Results (OKRs) can be energizing, doing so without the right method can be like exploring a new city without a map and you can get lost on the way. Although OKRs can revitalize organizations, when poorly executed, they often lead to frustration and missed opportunities. Here, we highlight 5 reasons why OKRs fail and offer tips on avoiding these mistakes to harness the full power of this framework.
The Sandcastle Effect
OKRs without a solid foundation can crumble like a sandcastle when the tide comes in. This mistake occurs when teams hastily implement OKRs without aligning them with company systems, culture, or priorities.
How to Avoid: Build a robust foundation by aligning organizational goals with a supportive culture, ensuring all teams understand the purpose of OKRs.
Example: A rapidly expanding e-commerce startup aimed to double its revenue quickly. However, without the necessary systems and processes in place, the increased demand led to delivery delays, unhappy customers, and employee burnout.
Key Learnings: Establish foundational systems and cultural readiness before setting ambitious OKRs to prevent them from failing under pressure.
The “Set and Forget” Mistake:
Merely setting OKRs isn’t enough; they require continuous attention. Ignoring regular check-ins can derail even the best plans.
How to Avoid: Treat OKRs as an ongoing journey with regular check-ins, ideally weekly or bi-weekly, to monitor progress and adjust to changing needs.
Example: A retail chain set quarterly OKRs to boost customer satisfaction via a loyalty program but failed to conduct weekly progress reviews, leading to incomplete implementation with no substantial customer satisfaction improvement.
Key Learning: Regular check-ins keep OKRs on track by identifying roadblocks and ensuring alignment with changing priorities.
The Issue of “More instead Less”:
Having too many objectives in OKRs can lead to a lack of focus and diluted outcomes.
How to Avoid: Emphasize quality over quantity. Limit objectives to 3-5, each with 2-5 key results, to maintain focus and achieve the greatest impact.
Example: A global consulting firm assigned over 10 objectives per team each quarter, leading to mediocre performance. The result was employee frustration and decreased client satisfaction. Pending the size of the organisation, there could be more than 5 key results if the organisation has enough resources to get them done. KRs are a good way to delegate and empower team members or to let different units work together against the same objective.
Key Learnings: Keep OKRs focused and manageable for better outcomes and to avoid burnout—aim for no more than 3-5 objectives.
Not distinguishing between KPIs and OKRs
Confusing KPIs, which measure current performance, with OKRs, which aim to enhance future performance, can cause confusion.
How to Avoid: Use KPIs as a measure of current progress in an extra dashboard and OKRs as tools to define strategic goals and guide future achievements. They complement each other but serve different purposes. KPIs can become input OKRs for one quarter if these KPIs are a priority to work on in the given time and support the strategy.
Example: A SaaS company treated its revenue KPI as an OKR by setting an objective to reach $10M in revenue without specifying actionable key results.
Key Learnings: KPIs serve as performance indicators; OKRs should define strategic aims and the steps to achieve them.
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Finding the Right Cadence with KR owners
The same OKR cycle may not fit all organizations. Quarterly cycles work for some, but not all.
How to Avoid: Choose a cadence that fits your business. Startups may thrive on quarterly cycles with 4-6 weeks sprint planning, while larger companies might benefit from quarterly, 4 months or semi-annual rhythms. Make sure you have KR owners as coordinators of all task and actions below the OKRs.
Example: A fintech startup copied quarterly OKR cycles from larger banks but found its goals irrelevant due to rapid industry changes and different company structure. KR owners are not empowered and therefore every action and task is checked by the management.
Key Learnings: Adjust your OKR cadence to fit organizational needs—startups may need monthly adjustments while established firms may prefer longer cycles.
Conclusion of 5 reasons why OKRs fail
OKRs can fundamentally change organizations, but they must be implemented carefully. By avoiding these frequent mistakes, you can guide your teams toward achieving ambitious objectives with clear direction and intent. To overcome these challenges and achieve measurable success, consider reaching out to OKR Asia today.
For more information how to introduce OKRs, Project & Action Management and how to achieve a result-oriented and agile culture please contact us here or on transform@asiapmo.com
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