Recently, Huddles engaged in an in-depth discussion with a large manufacturing company on how to further promote the deep application of OKR. The company began piloting the use of the OKR framework in 2021 and fully introduced it to three departments from the end of 2022 to the beginning of 2023, covering over 300 employees. In 2024, the company plans to expand the OKR framework to a larger scale, encompassing a workforce of a thousand or more.
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Throughout the process of advancing OKR within the company, the primary focus has been on digital cross-departmental teams. While the company has introduced and grasped some fundamental concepts and tools, they have encountered certain challenges in practical implementation. Therefore, they hope to seek advice from Huddles through this interview to further enhance the company’s application of OKR.
We’ve realized that our overall understanding of the OKR concept is not deep enough. As we plan to expand the implementation in the future, we’d like to know how to help more people quickly understand OKRs deeply and integrate them into their work management?
First, regarding the issue of understanding, although we have been using OKRs and have conducted one or two training sessions, the depth of understanding may vary. Supervisors might have a deeper understanding of the training’s concepts and the underlying philosophy, but as you move down the hierarchy, this understanding might dilute. Some employees might perceive OKRs as something the company requires them to write without truly comprehending their essence. Therefore, it’s essential to provide multiple training sessions to ensure that everyone can embrace goal management and self-management effectively.
Revisiting OKRs within a year or half-year is also necessary because the OKR process involves three stages: setting, tracking, and reviewing. Correspondingly, there are three meetings, and all of these need to be done well. This represents an ongoing learning process.
You mentioned empowerment through training. Does this mean that it’s not just about teaching people to use OKR tools but also about transforming their mindset? If so, what should be the focus of empowerment for managers, and what should be the focus for employees? Specifically, what can be included in empowering employees?
For a manager, the focus of empowerment should be on enhancing their ability to apply OKRs as a team management and communication tool. They should transition from a controlling and directive leadership approach to an empowering one. This shift includes managers understanding the specific logic behind the transition from KPIs to OKRs and taking on the responsibility of coaching employees.
For employees, gaining proficiency in using the new goal-setting tool (OKRs) might be a challenge. They need to be taught how to write OKRs, how to manage their goals, and how to track progress. Employees should also undergo a shift in mindset from “I have to do this” to “I want to do this.” It’s important to explain the differences between OKRs and KPIs, emphasizing that OKRs are not assessment tools. Employees should understand why OKRs are being used and the benefits they bring.
We are considering categorizing OKRs into Commitment OKRs and Challenge OKRs and assessing Commitment OKRs. I would like to hear your thoughts or recommendations on this approach.
Regarding performance assessment after implementing OKRs, there are two possible approaches. First, you can consider making OKRs the sole goal-setting tool, eliminating KPIs and incorporating them into OKRs. In this approach, KPIs and OKRs are integrated, with KPIs serving as minimum commitment-level OKRs, and then you add challenge-based OKRs. Assessment can be done using a 360-degree feedback method.
The second approach is to maintain KPIs and implement a dual-track management system with OKRs. In this model, OKRs are used for quarterly process management, while KPIs are used for annual or semi-annual assessments. KPIs can still be retained, perhaps as some foundational KPIs, supplemented by challenge-based OKRs. These two methods have their own advantages, and you can choose the one that suits your specific circumstances.
When employees propose challenge goals from the bottom-up, but the management level cannot cover them all, how should this be handled?
Indeed, OKRs encourage employees to autonomously set their goals, express their work ideas, methods, innovations, and improvements. There are three dimensions in OKRs: top-down, where leaders share goals and employees acknowledge them; bottom-up, where employees proactively propose their ideas and goals; and horizontal alignment, such as supporting the OKRs of other teams. The combination of these three dimensions may vary.
When employees have completed their OKRs, there will be a consensus meeting. If some goals cannot be covered, leaders may provide suggestions or modifications, or allow employees some room for innovation.
Starting next year, we plan to expand OKRs to other teams. Initially, we may face some difficulties, such as team members perceiving it as a waste of time or generating excessive paperwork. Therefore, I would like to hear your advice or strategies in this regard.
Yes, while OKRs are generally recognized as a valuable tool and method, the practical workload during implementation, including tasks like updating progress bars, scoring, and conducting weekly review meetings, can become an issue.
Process management can be achieved through consensus meetings, retrospective meetings, and progress tracking meetings. These meetings help in better tracking team goals and progress, reducing the need for unnecessary meetings and paperwork.
Additionally, I emphasize the need for flexibility within different teams. Each team has its own work rhythm and requirements, so we cannot impose the same management rhythm on all teams. While promoting the framework, provide guidelines, but let individual teams decide on tracking frequency, reporting, and reduce the burden on employees. Also, consider replacing some of the traditional paperwork with digital tools.
During the OKR promotion process, people still feel that there’s a lack of material incentives. Relying solely on motivation may not be a long-term solution. However, material incentives involve interdepartmental issues, and we haven’t found a particularly suitable incentive method. Do you have any suggestions?
Material incentives are indeed a topic worth exploring. One advantage of OKRs is that they are not directly used for assessment, which to some extent reduces employee stress. However, it may also be perceived as lacking motivation. For cross-departmental teams, you can design some incentive models.
First, consider some lightweight material incentive methods, such as celebratory events, recognition, etc.
Additionally, for projects that can bring significant value to the business, you can consider providing material incentives. For example, some companies establish a dedicated OKR fund to reward outstanding employees involved in such projects. You can also recognize outstanding OKR warriors based on quarterly project performance and reward them accordingly.
How can we assess the effectiveness of OKR project implementation?
For assessing promotion and effectiveness, you can use surveys, interviews, and retrospectives. Surveys can be divided into three dimensions: promotion team, management, and employees, to evaluate the maturity and actual value of OKRs. Additionally, interviews can provide in-depth insights into employees’ and managers’ experiences, while retrospectives can be conducted at the end of each quarter to evaluate OKR usage and its effects.
An annual survey is also an excellent opportunity for assessment and learning. You can involve a team or promotion committee in the survey. By using these methods, you can comprehensively assess the effectiveness of OKR promotion, identify issues, and make improvements.
As we expand our team size, we plan to introduce an OKR management tool. However, compared to internet companies, we have relatively little experience with OKR software. Do you have any suggestions on how to apply OKR software to work effectively?
I consider OKR software to be essentially a digital goal management tool that provides a more convenient and efficient way to manage goals. To integrate it into your workflow effectively, consider the following:
- Make regular use of the OKR software during meetings, such as weekly, monthly, or cross-team meetings, to review progress for the week and the quarter.
- Ensure that OKR management is regularly integrated with the online software system to replace traditional reporting and PowerPoint presentations.
- Using a digital system is primarily aimed at improving efficiency and making goal management more agile.
During the internal promotion of OKRs, should the HR team and exceptional managers become ambassadors and coaches first? Do they need to provide daily coaching and empowerment?
Yes, these individuals can serve as your initial champions, acting as catalysts for change. Selecting the right people for this role is crucial. HR and exceptional team leaders can become the company’s OKR coaches, responsible for guiding and driving the initiative.
In addition, consider establishing virtual teams to drive OKR promotion, such as OKR promotion teams or committees. OKR ambassadors can focus on promoting awareness, while OKR coaches can provide specific coaching. In the early stages, these coaches can help cover a wider audience. However, ultimately, you should empower pilot teams to lead their own OKR implementation. Coaches cannot be present in every department all the time, so pilot teams need to learn to operate independently and incorporate OKRs into their daily workflow. In the long term, these champions will continue to nurture the next generation of champions, facilitating broader adoption and sustained growth.
Next year, we plan to expand OKRs to be used by a thousand people. Considering that many are accustomed to using KPIs in the past, are there any specific points to note when transitioning from KPIs to OKRs?
In general, during the transition from KPIs to OKRs, two common mistakes can occur.
First, there’s a risk of turning the “O” in OKRs into KPIs. For example, setting goals like “Achieve sales of over 10 billion” or “Attain a customer satisfaction score of 90%” can make the “O” resemble KPIs. OKRs, as a goal management tool, encompass quantifiable aspects but also involve strategy and innovation.
The second mistake is thinking of OKRs as an assessment tool. Despite our efforts to communicate that OKRs are not for assessment, many employees may still perceive them as such, a rebranded form of assessment. Therefore, it’s crucial to repeatedly emphasize that OKRs are not for assessment but rather a tool for self-management.
When expanding OKRs to a large workforce, ensuring that leaders play a pivotal role and that the entire organization, from top to bottom, learns OKRs is crucial.
OKRs should be viewed as a change management initiative. In change management, the key is to make employees genuinely embrace the system and the way of working from the heart. Only then will they execute it voluntarily and effectively, achieving real results.