Empowered teams built on OKR

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[fs-toc-h2]Show notes

Every organization strives to have teams that perform well. However, the process of designing such high-performing teams and creating an environment in which people can thrive is often an overlooked process. Why is that the case? Aren't people your most important resource after all?

So, what are high-performing, empowered teams? And, how can you create such a work environment with the help of OKR? We spoke to Christina Wodtke, ex-OKR consultant, and author of Radical Focus and The team that managed itself, about:

• What the meaning of an empowered team is?
• What does it mean to consciously design and maintain a high-performing empowered team?
• How do you design such a team?
• What do organizations get wrong when designing their teams?
• What role do goals (eg. OKRs) play in the empowerment of teams?
• And what is the process of goal grading in such teams?

Tune in to learn more!

[fs-toc-h2]Transcript

Henrik: I'm Henrik founder and CEO of Perdoo. I'm the host of today's episode, and joining me today is Christina Wodtke. Many people know you from your wonderful book, Radical Focus, which is now onto its second edition. In my view, the book offers a great and very digestible introduction to OKR. For those who do not know you, could you tell us a bit about yourself and your journey with OKR?

Christina: So, right now I'm working as a.. I'm a lecturer at Stanford. So right now I do a lot of teaching, but I was in industry for a really long time before that. So I worked at LinkedIn and Yahoo and MySpace and Zynga. And Zynga was a John Doerr company, and that's why we were using OKRs as well. And so, when I quit Zynga, I was pretty burned out and pretty tired.

And I thought, you know, I'll consult a bit. Right? You know, help some startups. And this is Sterling by the way. He's gonna interrupt us occasionally if you're meowing in the background. So I decided, well, you know, these, these startups are really messed up — maybe I should introduce them to OKRs? And it just made such a difference in their ability to get their heads straight and pointed in the right direction and get everybody on the team aligned.

And so, I decided I didn't really love consulting, but I did love what OKRs did for people. So I decided to write a book and I thought, Oh my God, I'm writing a book about an acronym. This is a terrible idea. So I thought, how can I make this interesting and help people understand it? And I ended up writing a fable, you know, a simple story made up of some real folks that I had helped combine them.

So to protect the innocent, as they say. And put out the book, and people really enjoy it and love it. The using a fable turned out to be surprisingly effective. Cuz I've had people talk about other things they've learned from, like how to fire, how to handle conflict. You know, there's something about an illustration, a sort of case study if you would, a fictional case study, that really helps people get their head around what OKRs can really do and why they're useful.

Henrik: And your, your latest book is called The Team That Managed Itself?

Christina: Yes.

Henrik: Which I'd love to talk a bit more about during this episode. In that book, you write a lot about consciously designing and maintaining empowered high-performing teams. What is your definition of a high-performing empowered team?

Christina: Well, empowered means that the company is using OKRs. And OKRs, of course, set a goal. And then once you've set those OKRs, an empowered team is a team that says, these are the results we'd like to see, right? We'd like to see these outcomes cuz the key results are not projects, they're business metrics that you would like to achieve.

And so then the team says, okay, if we want to improve customer retention, what are we gonna do? And it's the team itself who runs lots of experiments in a lean approach. It's the team itself that really figures out what's working, and what's not working, learns, and decides when there's something that's worth launching to create a more effective product.

So high performing means they get results and empowered means they do it by themselves, I guess is the simplest version of the story. And it's a really hard thing for a lot of companies to do, but as Marty Cagan, points out, it is something that is incredibly effective when you make it happen.

Henrik: So empowering is a lot about creating autonomy in your organization.

Christina: Yes. I mean, an empowered team has to have everything they need to make shit happen. Excuse my language. So really they have to have design and product and engineering. They have to have their own resources. Maybe it's okay to have marketing somewhere else, and then they're given a problem.

I mean, the first time experience, was actually at LinkedIn way before OKRs or empowered teams people talked about it. You know, I was hired by Reed Hoffman and Reed said, We know events are important, but we don't know how. So go figure it out. And that was amazing.

Henrik: Yeah.

Christina: You know, I had to actually understand the event business. I had to go out there, I had to do a lot of customer interviews and customer development. It was.. I've never been completely empowered in that way, and it was amazing. And then later when I've worked at other companies, I just have to say that the results that I got as an individual, you know, that sense of trust and it made me really passionate, made me wanna work long hours.

It flipped around when I was a manager because it meant that I had more time to spend thinking about strategy. You know, I could say, Here, team, this is something that needs to happen. Go figure it out. And if you've hired well, and you've created psychological safety, then they just go figure things out.

And it frees up a lot of my time to do, what I would think is more critical work at that level.

Henrik: You would, you would think though that every organization would strive right to ensure that its teams are performing well? Yeah. So why is that so hard? Like what do organizations get wrong when they design their teams?

Christina: Well, first of all, they almost never designed their teams. You know? I mean, think about the last team you were on in a company. You probably were kind of thrown together, and then they hired someone and some of the people were left over from the old boss. You know, there isn't a lot of thought about how do we take care of the whole gestalt of the team as opposed to hiring a bunch of A players maybe and throwing 'em together. You have to think about the personalities, the culture. People have to figure out how are we gonna talk to each other. How are we going to disagree? What happens when I think you've just said something stupid, you know? Do I just say "that was lame" or do I like spend some time talking it through?

So you need to set norms, which is an agreement about how we'll treat each other. And you have to revisit it because as you add more people, the team's going to change. So why don't companies do it? Let me think. It's kind of hard because sometimes companies don't have a lot of faith in their talent.

I work with CEOs who say, Well, you know, it'd be nice if we had Silicon Valley talent, but you know, we got these people in Ohio, or, you know.. And the reality is they're often really, really, really smart. They may not have as much information as we have at the information fire hose of the Silicon Valley, but they're really smart people.

So if you can just spend some time with them and be patient enough to grow them, you can take a place where you're like, There's no great talent and grow your own. It's not like there's only idiots in Ohio. Right? So I think it's really important to.. If you can't hire for experience and sometimes you can't, you have to hire for intelligence.

Both emotional intelligence and classical intelligence. Somebody has to be able to know how to work well with people as well as, have some raw intelligence where they can learn really, really fast. And that's, uh, the most important part about intelligence is, can you learn quickly? So if you're designing your team, maybe you just need one real experienced person and then that rest can be raw talent. Or you can build a team of raw talent, but then you're personally gonna have to spend some time with them.

But you can't micromanage them because then they don't grow. They don't think. By giving them problems and challenges, that's how they become that A player that you're dreaming of. It's hard for a company to do that. It's really hard for managers to let go. It's hard for managers to believe if you don't know something yesterday, will you know it tomorrow? Well, hopefully you will. You know, it's hard for managers to let go. I mean, the pandemic, the hardest thing on managers were I can't watch you and see what you're doing all day. You know, a lot of people were kinda forced into allowing autonomy cause they didn't really have a lot of choice. Right?

Henrik: But it starts with consciously designing your teams, right? Cause at the start you mentioned that, well, most people.. Most organizations don't design their teams at all.

Christina: Yeah.

Henrik: So that conscious process of designing empowered teams, I mean, you're touched in the beginning on OKRs and on goals that they should be working on, which I guess through goals, you can create more autonomy, right?

Christina: Yes.

Henrik: And I think goals have the ability to take you away from micromanagement. Trust is important. You said, how should we, how should we respond to each other? What are the norms that we need to put in place? So you put together framework in the book, right?

Christina: Yep. The framework is pretty simple. It came out of a combination of working with companies. We were having a hard time with OKRs, and it's because they didn't have these empowered teams and trying to figure out what does it really take to make it? And so I, I came across, in the literature, you know, the business literature which just have been around forever, that you need goals, roles, and norms.

So goals are clearly stated, you know, things that the team is all aiming for together. That's very easily OKRs. I was like, Okay, that's easy. Norms. Norms means that when we enter into a team, we all have these unspoken assumptions about how things should work. Like some people think interrupting is fine cuz they grew up in a New York Italian family perhaps.. The old stereotype. Other people are really upset and hurt when they're interrupted.

Like, you know, most of us out here in California. And it's like, is it okay or is it not okay? But there's all sorts of other things like do we all argue and then the boss decides or do we come to a consensus and then present it to the boss? There's just so many things here. I always recommend, The Culture Map by Erin Meyer to really think about all these stresses that people have.

So by getting together and saying, Here's how we're gonna be together, it just takes it from unspoken, which creates conflict to spoken, which creates agreement. And then roles, you know, we all have these roles, like you're the engineer, you're the designer, and you're the product manager.

Well, what comes with those roles? Do you make the final decisions or are you more of an informer with expertise. But the thing I think is really sneaky is there's all these roles that aren't assigned that slide by us. Like who's gonna take notes at a meeting? And this is one of those things that often falls to a woman or a person of color because there's an unconscious lowering of status when people look at a woman or a person of color, and therefore they give sort of the tasky stuff.

And you don't want that because it's gonna create resentment and anger over time. So instead, you have to kind of define: what are the various roles people have to have? Who's gonna run the meeting and who's gonna take the notes? And then rotate them through the whole team. Because it'll grow a stronger team that really relies on each other.

Henrik: So a role is not a job description, but there are different situations with your team where people have to play different roles. Did I interpret that correctly?

Christina: Yes. Yeah, there's, there's definitely the job description part, but then there's a whole other layer of your role within the team. That's what I really wanna think about.

Henrik: Okay. Okay. And how, how do values come into play? Like is values, are these the norms or is that completely separate?

Christina: I mean.. Values. I don't talk about it a lot in the book, but I am a deep believer in understanding values. There are 12 universal values, that I can't remember his name right now, but this wonderful psychologist put together after doing a lot of research across cultures.

But there are all these other smaller ones that you see. Like, somebody believes in autonomy or very passionate about protecting privacy. And so, those values often come out in both the roles and the goals and the norms because your values inform everything. And so it can be useful if you have a team that's not working well together to clarify what are our values in this particular area. And I like the universal values cuz it's a good jumping off spot. But there's other works like you know, value by design that talks a little bit more about using values to clarify ethics in business technology. And, yeah, value setting is useful.

Henrik: Definitely. I loved that book by the way that you referenced just now: The Culture Map. We have a very diverse team.

Christina: Oh, isn't it good?

Henrik: Yeah, we made it a mandatory thing to read just to make sure that all the different cultures were actually able to understand each other and prevent any issues following that.

Christina: Well, you're European, so..

Henrik: Yeah.. If we zoom a little bit deeper into working with these goals as a team, and goals and also the performance of a team. Cause we're talking about high-performing teams here. What is the process of grading goals and should poor goal performance, for example, have consequences? Or if like, have, have poor performance, but you could also turn that around, of course, it looks like should Great performance, on working on certain goals, should that automatically lead your promotion, for example?

Christina: No, I mean this is sort of a classic problem, which is we tend to lionize the people who bring in the huge business results. But we don't always look at how are they affecting the business altogether. Right? Like maybe they're bringing in a lot of cash and that's like, Ooh, that's so awesome. We love money, but what if they're a complete asshole and everybody else is working at 20% of their potential because this other person just taking all the air out of the room. Right? And we've all met people like that.

Henrik: Yeah.

Christina: They get good numbers and then they become.. Once again, I apologize for the language, dick Swingers. You know, they're in there and they're like, Oh yeah, I'm so cool. I'm so pretty. Little bit like you know.. And you can't let that happen because you're very excited about this one performers superpowers, but you don't realize that he's like a vampire and he sucked out everybody else's superpowers. You wanna make sure that the team is what you lionize and the team is responsible for the performance of the goals.

Does it affect performance management? I think in the way that it should affect performance management is were you working on the things you were supposed to? Were you picking the right activities?

Were you contributing to the final successes? Were you learning and getting better all the time? You know. I always recommend to people when they're doing their performance review, consider the job they were hired for. Right? There's all these daily things you have to do. If you're a manager, you're doing your one on ones and giving feedback and coordinating, but then also think about the goals that the person is contributing to.

As a manager, I wanna make sure that these business metrics are being moved. So when you look at that, you're saying, did this person keep their eye on the ball? Did they do what they could to make it really happen? Why did the metrics not happen? Was it an external force that you couldn't possibly foresee?

Or was it just you sucked? Right. And there's a big difference between those two and I, you know, people get pissy. Wow, that's really hard. I have to do a lot of thinking, but come on, that's your job. Like there's nothing more important than the people in your company, especially in a digital company. If you're digital company, your people are the company, right?

So spending that extra time to make sure you're getting things like performance reviews, right, is time well spent. You'll get loyalty. These people are learning. You don't want 'em to take all that learning off to your competitor, do you? So..

Henrik: No, I agree. And then also the reason I asked the question, I mean being a goal management platform, being an OKR software, we get asked that question a lot or we get that request a lot.

Right. And for us, the question is always, do we or do we not build performance reviews as a feature into our product? And for most of our clients, they already have an HR or HRIS software: Workday Success Factors, BambooHR, Personio. And these tools typically already allow you to track performance reviews.

Christina: Yeah.

Henrik: They don't always look as nice or the greatest UX, Just out of curiosity, what do you think? Like, should we build that into the product or you believe you should keep that separate?

Christina: I would prefer to keep it separate. However, how can I put this? I think all software is a point of view that's been frozen into code.

And in order to shift that point of view, you know, you have to change the functionality or whatnot. So that means. Right now you have a piece of software that reflects what I think is your very excellent understanding of how OKRs and goal management works. If you felt very strongly that you had a way to do performance management that made sense.

Then you could extend your product and if there was a lot of demand, and of course, you'd wanna do some experiments and see if people would actually use it, cuz it's possible you'd build it and they've already got monday.com and they never switch over, they'd never paid for that. And that would be a waste of time.

So should you do it? I don't know. You're working lean, I hope. Run some experiments, see if it makes sense for you. And if it doesn't make sense, don't do it cuz just cuz people are asking for it doesn't mean it's the right thing to.

Henrik: No. Totally. Totally. Going back to the topic, going back to the teams, what's your number one piece of advice that you'd give to those organizations that after listening to this podcast decide like, You're totally right, We should be more conscious about designing our teams, and we wanna be designing empowered, high performing teams.

What would you, what is your top recommendation?

Christina: The top recommendation is try to remember that human resources are human beings. That these are people and people are gonna be complicated. They don't work like abstract things. You know, like a human being has multiple talents. They have a personality, they have a culture, they have a background, they have insights.

And so when you're putting together a team, you really gotta think about who are these people and are they the right people to work together? It's kind of a big duh, but it isn't really done. There's something about drawing an org chart that turns every human being into a box with a line going to it, and people are more complicated than that.

Henrik: Yeah.

Christina: Then you have to find the right manager you know, because you want somebody who's gonna treat them like people and not like, These are idiots. I have to micromanage, you know? Management is an important skill that not enough managers have.

Henrik: Yeah. No, It's also typically the only career path that most organizations still offer today. Right. Like you do a good job in the team, and the only next step is for you to become a manager, whether you want that or not, or whether that fits you or not.

Christina: Oh, yeah. The "IC path" that everybody should have the "Individual Contributor' path, Like there's a point where you wanna make more money, have a better title.

Yeah. And you shouldn't have to manage people if you suck at it just to get enough money to buy a house.

Henrik: Yeah. Totally agree. Well, you do see more organizations nowadays offering like a leadership or management track, and then also like an expert track where you can just get deeper and better into what you do.

Thanks a lot for sharing your thoughts with us today Christina, it was a pleasure talking to you again. I would recommend everybody to definitely read your. We put a link to your latest book, or you can learn everything about designing consciously, empowered and high performing teams. So we put a link to that book in the show notes.

Christina: Okay. Yeah. If you don't know if your OKRs aren't working, team that managed itself probably has some of the answers that you're looking for to make it happen. And if you're not using OKRs, this might be a better way to start with them, is actually think about the entire team and the entire system and how can I get what I really want, which is fantastic business results and happy employees.

Henrik: I'm guessing most of our audience is already working with OKRs, but if you're listening and you're not, definitely recommend reading Christina's book, Radical Focus and I've just learned at the start of this podcast that we have a second edition coming out soon.

Christina:  It's out now! You can buy it at your local bookstore! Woo.

Henrik: Perfect.