OKRs: Compliance or effort?

OKRs are a governance model that serve as a vehicle for value for teams. They externalize the contribution that teams generate to the business and the organization. Many people believe that value lies in meeting KRs (key results) and no, unfortunately not. The focus of OKRs is primarily on meeting objectives.

Key results are the way we validate the achievement of objectives. These are affected by factors that the team has control over and those that it does not (the latter lead to the imperative need for dependency and risk plans to mitigate the impact).

Each KR is nothing more than a hypothesis that is built based on a set of assumptions:

We define an objective framed in key factors for its achievement (assumption 1), based on these we determine the team's own control factors (assumption 2), based on these we prioritize the most important ones (assumption 3), based on these we choose the value indicators that can measure these factors (assumption 4) and based on these, we choose goals that will serve as a reference and which we call KRs or key results (assumption 5).

This makes each OKR behave, of course, like a hypothesis. If we have done the exercise correctly, it is likely that we have good OKRs (good, in the sense of fulfilling their purpose of connecting strategy with operation).

OKRs operate mainly in highly variable environments, where the "strategic" condition does not exceed a few months of stability, precision or visibility. That is why they are worked on cyclically, in short periods. At the end of each cycle, an evaluation is made, decisions are made and guidelines are generated for the next cycle.

Meeting the key results does not guarantee that the objectives will be met. A bad choice of assumptions, 2, 3, 4 or 5, can make it a poorly constructed exercise and the KRs really are not as representative as they should be.

If we add to these external factors (dependencies or risks), poorly managed, the strength of the correlation between objectives and key results can decrease.

Today, we are working on OKRs with a KPI mindset . I am talking about the KPI mindset when referring to the predictability that the operational part usually has. The operation, being more stable, has a stability condition that the KR does not have, because the latter is affected by a set of multivariate assumptions. The instability of OKRs often makes it impossible to achieve them, to reach them. Each KR you add adds complexity because you add variables to cover.

OKRs represent a simplification of strategic variables to cover a governance model that is robust enough for the necessary actions to be taken.

Meeting OKRs only corresponds to the understanding that the hypotheses were validated. Demanding compliance with KRs as if they were KPIs is a bad decision, since KRs only represent the metrics of a few variables chosen as the most important, leaving aside in the mental exercise other team control factors, as well as factors that are not controlled and that will impact the objective.

Hypotheses are validated. Pretending that the objective must be considered fulfilled just because certain indicators are met is pretentious.

Last but not least, assumption 5, about KR estimates, adds further complexity. We know that estimates in complex environments are a problem.

Since all estimates are inherently wrong, but necessary, we must understand that assuming them for granted (and thus demanding their fulfillment) is a mistake. The estimates generated around the metrics we use as KRs will be close, but rarely exact.

Fulfilling a KR is an evil that must be sought but is not something that is normally achieved (adding to its aspirational quality). The day we can understand that we have fewer and fewer chances to "control" fulfillment, we will focus on something more relevant: effort.

---

A matter of effort

What if we stopped focusing on compliance and instead sought to ensure the team's effort to achieve its key results? Isn't it true that if we seek to ensure that teams that do OKRs give their maximum effort, the result will be the best possible? Wouldn't it be better to create conditions for the team to maximize its effort and not micro-management that only aims for compliance that may never come?

Organizations that are having the best results in monitoring OKRs are betting on generating conditions that they control. This means that teams seek to improve their level of communication, cooperation, participation, commitment, decisions, interaction, sense of responsibility, among other variables that allow them to define what they consider to be the team's effort to achieve their OKRs.

If we are concerned about seeking the maximum possible effort from the team, the result is likely to be the maximum possible. The best compensation models based on OKRs that I have been able to observe have been built around this assumption.

Do you dare to experiment?