The culture needed for OKR to succeed

Implementing OKR within an organization is hard. The organization needs to be ready for OKR and have a culture that helps it thrive.

We spoke to Roger Longden from There Be Giants about the culture needed for OKR to succeed.

Perdoo:

It’s great that we have a chance to talk again. Our last interview was exactly one year ago. How have you seen the OKR space develop since then?

Roger:

One word really (well three actually) “Measure What Matters”.

Measure What Matters pushed OKRs into the mainstream, which is great in that OKRs are gaining popularity. In parallel to this, we’ve also seen some forward-thinking organizations decide to assign roles and resources specifically to strategy execution and goal management.  I think this is great news as there’s been an assumption for far too long—especially in large organizations—that everyone just gets it and that they know what to do. With so much complexity, background noise and the need to get things done in the modern workplace, it’s rarely a priority to step back and see the bigger picture.  I’m pleased this problem is now being taken seriously.

Perdoo:

When you talk about OKR, you often also talk about culture. How do you see the relationship between the two?

Roger:

They are two sides of the same coin; the value you gain from OKRs is directly related to the norms within your culture.  Most people think that OKR is a model or a method. While there are some similarities in their use from one business to another, there can also be much variability.  So I believe OKRs are best thought of as a set of principles which can be applied in a way that best suits the company. How these principles play out depends hugely on culture. For example, if there is a high degree of criticism and blame then it’s unlikely that people will feel “safe” enough to be honest about their confidence levels when discussing their OKRs.  

When used well, OKR can unite teams by making it clear what everyone’s contribution needs to be towards a higher level goal and how vital their input is.

Perdoo:

What kind of culture is needed in an organization for OKR to succeed?

Roger:

Above all, people need to feel safe.  Some equate “safe” with “comfortable”, but I don’t mean that at all.  The sense of safety needs to be seen in the preparedness to be open and honest, eg. when discussing confidence levels around achieving key results.  Any sense that management will use a lack of confidence as a reason to criticise and blame means that they will only be told what they want to hear, and that’s not always the truth.  

Psychological safety is also vital when it comes to using OKR to drive innovation.  If the organization has a cultural belief that all failure is bad, then any attempt to encourage new thinking and experimentation will likely fail as people will fear the consequences of failure.  Here it’s important to distinguish between different types of failure; that which happens once, is learnt from and then the learning applied to the next attempt is how innovation happens. I like to call this “intelligent failure.”  Failure which is repeated is a performance issue and should be addressed as such.  

Perdoo:

How do you know whether or not your organization is ready for OKR?

Roger:

Very good question.

I look first at their motivations for wanting to use OKRs as that can reveal a lot.  Some want them to strengthen alignment as they can see that their pace of growth needs it; others want to use them to replace more traditional forms of people performance management.  The first is more about motivation, teamwork and cross-functional working. The second is more focussed reinforcing existing control structures. It’s probably no surprise that I believe the latter (people performance management) is not a good use of OKRs at all.  

Given that I firmly believe that OKR works best when used for managing growth, change, and innovation, I look for the organization’s inclination and appetite for this.  If it’s high, OKRs are likely to be a good fit for them. The prevalent leadership culture is important too as OKRs only work well in an empowered environment. If the leadership culture is more directive, then OKRs will likely feel just the same as what’s gone before as they will be used to control rather than empower.

Perdoo:

When organizations get started with OKR, what should they watch out for to make sure the implementation becomes a success? (from a cultural perspective)

Roger:

Change management.  That’s what usually trips up (or even undermines) OKR in the early stages.

A lot of organizations who adopt OKR are relatively young, and OKR is the first major change to their way they working.  So a lot of organizations that implement OKR aren’t experienced in “managing change.”

TBG uses our own model to help with this, which I adapted from Kotter [a professor of leadership at Harvard Business School]. There are three things I’d recommend the leadership team to focus on:

1. Be crystal clear in communicating what will happen for the business if they do, and if they don’t, change (ie, the imperative).
2. Make sure the WIIFM (what’s in it for me) is clear (ie, how will it make life better at individual and team level).
3. Role model the change they want to see.

Number 3 is the main reason why OKRs fail: leaders not embodying the change they want to see. So that should be their top priority [also see our interview about the importance of CEO involvement].

Perdoo:

We see some organizations that rollout OKR struggle with resistance from (some parts of) the organization. Do you recognize this? How do you overcome such resistance?

Roger:

Yes, this is often due to them not managing the change properly. If they’re following the three steps I’ve already mentioned, that will help.

In addition to that, they really should be anticipating the questions and concerns which will be raised in advance. That way, they will be ready to answer them and prevent uncertainty (which often fuels resistance).  For example: how OKRs link with pay and reward. You need to have a clear answer ready so you can nip potential resistance in the bud, before it starts.

If they’ve launched OKR without following the 3 steps above and started to experience resistance, there’s still time to fix it.  Being clear on the WIIFM (what’s in it for me) means really understanding what matters most to individuals and teams, so you can show them how OKR is the right solution.  This requires listening, followed by a thoughtful response that shows their concerns have been taken seriously.

It’s also possible that they may have rolled out OKR out too quickly.  All organizations have a limited capacity for change at a given time and if you exceed this then resistance will show up.  This is why a pilot can work really well. It allows the time and space to practice, learn from and then communicate the successes which, if done well, can start to create a “pull” from the rest of the business, rather than the change feeling like it’s being “pushed.”

Perdoo:

What are your top 3 tips for changing (read: improving) your organization’s culture?

Roger:

Great question.

1. Measure it.  Believe it or not, it’s possible to build up data on your culture by measuring the values which are present within it.  As the saying goes, you manage what you measure.
2. Create (or validate) a set of three values.  Three is the magic number for recall and that’s really important. If you want them to have impact, they need to be remembered!
3. Once you have your three values, facilitate teams in translating them into what they look like if they’re working really well in their area.  The same value could look quite different for Sales than for Finance. This “local” translation helps make them far more relevant and meaningful.

Perdoo:

Thank you so much for sharing your views with us. Is there anything else that you’d like to share with our audience?

Roger:

Only that culture and OKR go hand in hand.  You need the right values, norms and behaviors to see OKR work really well.  If your culture isn’t right, then work on that first.