There’s something exhilarating about facing a challenge head on and overcoming obstacles in order to make our goals a reality. Consider mountain climbing, for example. It’s not for the faint of heart—and certainly requires extensive planning, physical preparation, and a dogged sense of determination. But probably even more important, climbing a mountain requires that you adapt and learn as you go—step by step, and camp by camp. In fact, we like to draw parallels between climbing a mountain and facing challenges within an organization. We describe this as leveraging “objectives and key results” (OKR) using a “camp-by-camp” strategy.
When it comes to transformation, there is no shortage of organizations that have failed. The newspapers are littered with their stories. These missteps are often attributed to a range of issues—both endogenous and exogenous. But the key to getting past these roadblocks is to have an organized and structured framework for learning from our mistakes, and applying these learning lessons to future transformation initiatives.
The problem today: companies are failing to adapt
Every CEO today knows the importance of adapting and accelerating their company’s time to market. When trying to move the needle in their organizations, they round up the troops and rely on traditional business management models, such as annual business planning events and traditional organizational structures. Why not? They’ve worked for decades, right?
This model relies on a top-down approach, where senior leaders establish a multi-year business plan. This assumes, however, that an organization’s leadership fully understands all the problems and knows all the answers.
To engage the entire organization in a multi-year roadmap, management creates incentives tied to predetermined outcomes. The hope is that teams will focus their energy on particular activities because it will drive the business forward regardless of what’s happening in the marketplace. But what happens when a startup enters the fray? How about the changing tastes of your customers? And of course, there’s the ever-present threats and opportunities introduced by new and emerging technology.
Overcoming problems with objectives and key results (OKRs)
At CI&T, we’re strong proponents of applying Lean principles to digital initiatives. Think about it: short cycles, planning, learning along the way, and adapting based on feedback. These are all essential ingredients of a successful digital initiative, particularly considering how fast the marketplace is changing. The organizational transformation you’re hoping for won’t be accomplished by next Monday, however. Change like this takes time—but it’s not impossible.
A change in organizational thinking—camp-by-camp
Think about changing mindsets like we’re about to climb a mountain. We have to keep our eyes on the summit, but focus our efforts on what’s directly in front of us. For instance, mountaineering involves spending many nights camping on the mountain. We begin at our base camp, and we start each day focusing on how to reach the next camp. Once we reach the first camp, we consider what we learned along the way as we prepare for the second one. We also have to realize that those “successful strategies” that helped us this time may not necessarily produce the same results. Think of the journey as a series of zigs and zags rather than a straight line. This is the reality of your learning cycles.
As we think about our organizations, let’s set a very ambitious goal of transforming the entire organization. That’s our objective. Next, we need to ask ourselves, “What would progress look like three months from now? What would get us closer to our objective?” These are the key questions we need to periodically ask ourselves—at each camp.
Creating OKRs for your organization
To make meaningful use of OKRs within our organization, remember that our objectives must be very ambitious and the key results provide us with evidence that we are closer to achieving those objectives. We also must remember that these OKRs need to enable decisive action. As an exercise, ask yourself, “What do I want to learn?” It should be ambitious, qualitative, time-bound, and actionable by the team. Maybe you want your organization to deliver the best customer service within your industry in the next 18 months?
For our key results, we need to consider how we can measure our progress. Key results must be measurable and quantitative. They require a plan. Are we seeing improved response time to customer queries? Are product ratings improving? Or maybe we’re seeing evidence of increased adoption of a new digital product or service.
Remember that we may not have everything accomplished in three months. But if we’re focused on learning and applying that learning going forward it’ll be clear that we’re making progress towards our ultimate objective—transforming our culture and business.
In short, think of objectives as very ambitious goals. Meanwhile, key results can be captured as measurable evidence that you’ve made progress. After measuring your results and consolidating your progress, it’s time to review, document, and share the lessons learned. And finally, define your OKRs for the next camp.
A new mindset: overcoming organizational resistance
While seemingly intuitive and logical, implementing an OKR / camp-by-camp strategy within an organization can present a number of challenges. Change is hard. And within most companies, people are not allowed to utter the F-word—i.e., failure. Instead, they day-to-day life is often consumed with damage control and mitigating the potential impact of failure.
However, with OKRs, we have to challenge ourselves to think boldly and shoot for the stars—otherwise, we’ll be predictable. We want to make as much progress as possible. If we reach our camp, but miss the mark, this isn’t a total loss. In fact, failing is still a success as long as we capture what we’ve learned.
Why didn’t we reach our goal? How can we help other teams facing this same set of challenges? If we allow ourselves to embrace failure as success, provided we learn from the experience, this is a profound shift in organizational thinking.
Common mistakes when using OKRs
In order for this shift to happen, there’s no overstating the importance of organizational support. For example, we need to move away from attaching OKRs to bonuses and performance reviews. If we want teams to be ambitious and bold, we can’t tie their hands with outdated incentive structures that compel people to play it safe.
We also can’t keep our objectives shrouded in secrecy. How are teams supposed to mobilize around a bold vision for our organizations when we keep them hidden in darkness?
Another mistake is to set key results that are “tasks” rather than “results”. In the scenario described above, we explored the idea of being the best in customer service. To that end, we’ll measure our success in customer approval ratings of four stars or more for product X. This is a result. Next, a task might be to survey customers to gather their feedback. Do you see the difference?
Lastly, avoid looking at OKRs as a quarterly reporting mechanism. OKRs are powerful for transforming organizations into more agile, innovative leaders in their respective industries. However, if we allow them to become just another mechanism for navigating internal bureaucracy, then we’re missing out on a tremendous opportunity.
Your OKR cheat
As you embark on your journeys with OKRs using a camp-by-camp approach, here’s a quick rundown of what we need to remember:
- Be bold with what you hope to achieve
- Cascade the tactical actions
- Engage teams with the goal of achieving those goals
- Use three-month cycles
- Create a safe environment within your OKR / camp-by-camp framework so people aren’t afraid to fail.
- Learning is progress: aim to capture what we’re learning so that it becomes valuable for the entire organization
And remember, as Bill Gates once remarked, “Success is a lousy teacher. It seduces smart people into thinking they can't lose.” Instead, embrace the failure—and learn from those experiences. That’s the only way to move your business forward in this ever-evolving digital environment.