Third time's a charm: Why an unsuccessful OKR implementation doesn’t mean failure with OKR

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[fs-toc-h2]Show notes

OKR is an iterative process — it's essentially change management. The truth is that you may not succeed when implementing OKR for the first time, maybe not even the second time. And that's fine. OKR is a flexible and forgiving framework. Once you've mastered it, it will positively impact how you operate as a business. So don't give up just yet!

We spoke to Vlad Filippov, founder and CEO of Spark Equation, about his experience implementing and working with OKR. His first two attempts at implementing OKR didn't run as smoothly as planned. Each time he acquired learnings until he knew exactly what his organization needed to be successful with OKR. We talk about:

• How and when he knew his business needed a framework like OKR
• What he learned during his implementations
• How he finally found success with OKR
• How he finally implemented OKR to everyone
• What changes he has seen in his organization now that they're successfully working with OKR
• What tools he uses to manage all moving parts of his business

Tune in to learn more!

[fs-toc-h2]Transcript

Henrik: Welcome to another episode of Goal Diggers. I'm Henrik, founder, and CEO of Perdoo. Joining me today is Vlad Filippov from Spark Equation. Vlad, could you tell us a bit about yourself?

Vlad: Hey, how are you doing Henrik? Yeah, sure. My name is Vlad Filippov, CEO, and founder of Spark Equation. We're a boutique consulting company specializing in complex B2B applications and product design.

We've been doing this for over six years now. Excited to use OKRs and Perdoo in particular.

Henrik: And how did you find out about OKRs? And, perhaps even more interesting, like once you found out about OKRs, what made you decide to implement that in your organization?

And perhaps you could also share a bit of insight about what stage your organization was when you decided to implement it. So what were like, what created the immediate need for something like OKR?

Vlad: Yeah. So I heard about OKRs first time around 2016. It was the first, second year into running the company. And at that point, it became apparent to me that the kind of, "let's do everything that sticks", doesn't work anymore.

And, in order to get to growth stage, we needed to figure out what and how we doing things and why we doing things. So that's when I started educating myself on ultimately how run a company. Because when I first started it was like, okay, so this is a business. This is what we do. We build software.

Okay, so let's go. And it got us to a certain point. But after that it's like, okay, so what's next? How do we get better? And, I started learning about it. I read multiple articles about it. I saw some of us, and throughout the years I saw some of our clients implementing them (OKR) and I liked them.

I liked them. So I started trying it. This is my third approach, kind of attempt, to implementing OKRs this year. And I tried to do this in 2018, then 2020, right before pandemic. And with various success rates, I guess. But overall, because this is a third attempt, those two attempts, they didn't really stick. So..

Henrik: But still, they kept you motivated?

Vlad: Yes, because again, the problem was still apparent that we need a direction and alignment. We needed to have certain beacons and pillars in the sand, right? And we needed to know where to go. And that had to be, not just in my head, or heads of a couple people that I talked to regularly, like the leadership team, but it had to brought to everyone in the company, in the organization.

And you know, we've always been a remote-first company. We've always been distributed. And, it's hard to align the team without being really explicit and transparent. So, what I try to do with OKRs, uh, I try different tool sets.

With my first attempt. Okay, so tool set, fine. It was a Google sheet, right? So it works. But my first thing was, I created this "space station" that I call it, with a lot of different things in it. And when I present to the team, they're like, Okay, this looks great, but Vlad, this is unattainable. This is just too much. This is something that maybe we're not gonna be able to achieve like ever.

And do you even have resources for that. And let's be honest here, my results and my.. The results that I said, the key results, right. Objectives, Okay, fine. But the key results, they were not really measurable. They're not really achievable. They were more like wishful thinking, than anything else.

So, and because of the tools that I used, also, the team was not able to provide the feedback. It was, it was basically, static. You know, I came up with it at the beginning of the year, I share the screen with the team. I share this Google sheet with the team. And they looked at it and said, Okay Vlad, okay, let's see what happens.

And then, because there's so many of them, because the environment was changing, by end of Q1, everybody already forgot what we've planned to do in the beginning of the year. And, it was just process as usual. You know, I was like, let's work on what works and let's just do what we do and, the goals, Okay, we'll revisit them at the end of the year again, we'll see where we are, right?

So that was a first attempt. Second attempt was more a dynamic in 2020, where I said, Okay, fine, let me scale it down. Let me pick fewer goals. Let me get a more dynamic tool. I started using the OKR plugin for Jira, and try to connect the strategy with execution. And, it worked, but it didn't.

Well, because also pandemic started, so I don't know if that potentially kind of threw me off.

Henrik: Is that the plugin called Upraise?

Vlad: No, I think it's called OKRs. That's the plugin for Jira. Yeah. And the thing is the team was not taking to that. Also, I think because that plugin is, again, that's my perception, too much rooted in Jira and execution.

And Jira has this tactical purpose, right? The team looks at Jira, it was like, it's a tactical execution. The OKRs, it's something secondary, right? The strategy is something secondary. So you basically put in strategy tools into the execution tool, and they take a second stage right, versus the front stage.

And that's where this why, what and how, they flip. You start with the how and then you kind of tag the why to it. If we're talking about .. I'll give you an example from software engineering is a TDD test during a developer unit testing, right? It's like you doing unit testing as an afterthought. You're not starting with the testing, you're not starting with discovery.

You're not starting with the user, you're doing it after because you just need to check a checkbox and not something you actually doing it because you, you know, it works or you know it's the right thing to do. So, and that was also a failure for me.

And also the pandemic started. So I was not able to, that was my fault. I was not able to calibrate fast enough. And when I got back to this.. Goals that I set up for 2020, in like September 2020, right? It's nine months later, it was already too late. So I said, Okay, I'm gonna start, fresh. I started looking for tool that would put strategy first right, and OKRs first, and also give us the..

Give us the points and dynamic points. What I like about Perdoo in this case is that it has those best practices. It has those examples of the goals right there. Once you're writing them, you don't have to open another page. You don't have to go look on a website. You are there and you're working with this in real time, right?

And then you can connect everything else to that. You can connect your execution to that. You can connect Jira to this. The ultimate goal, the pillars, they take the front stage and the team's attention is basically .. You put a flashlight on it, right? You basically center forward, forward and center.

And another thing too, but that comes to me because throughout my two attempts before I realized that, look, first I needed to scale down. Okay, well let's be realistic. Let's reset expectations. B, I need to make sure that those, key results are actually measurable. They're not just initiatives. They're actually measurable.

I know. Where are we going? Why are we doing things? I know how we measuring them and I know through what we trying to achieve it or we plan to achieve it. And, all those three things are constantly in like dynamic execution. And that's what I did this time around.

Scale things down. I brought the team early on... I brought everyone in place and I also improved my cadences, personally. As a CEO. And I started being more consistent because instead of doing quarterly updates, now I'm doing monthly updates to the team. I'm showing this every month. We're doing dynamic check-ins every week, right? We're never letting off.

We're never just.. Oh, we're gonna come back to this in three months. We are not doing the strategy exercise, OKRs exercise as the afterthought. As something that somebody made us to do. We start our day with that, basically. We start our week with that, right? We have check-ins with the team or daily updates, you know, weeklys and we go into check-ins.

We'll look it up. We see what's been done. And again, we always ask our questions: what's happening? So this year we had some curve balls as well with the competition and the environment, what's going on in the world. And I had to recalibrate. I had to recalibrate a lot, and because I had this tool and now mindset.

It was natural to me. I said, Okay, fine. So I'm gonna recalibrate. I'm going to scale a bit more down because I started with the four goals for this year. I scaled out to two because four became unattainable. And I realized that, you know, back in like Q1, but I scaled it down and now I was able to recalibrate and realign all the resources, all the team time, and I can show it.

And the team also appreciates that because they see that we still go in a direction we chose, but we are now more focused. And they see that I'm responding and the leadership team is responding to the reality that is happening. And not just, not just being like, Okay, yeah, we planned this a year ago, and yeah, we know things change, but we're not gonna replan it.

Or this is a plan, we're gonna have to stick to it, even though it's not realistic.

Henrik: I'd like to talk about the, Yeah... about the benefits that you're seeing in your organization in a minute. But before we move to that point, it was really interesting to hear like the different approaches that you've tried and all the things that you've learned over these past couple of years since you started working with OKRs.

And I think there's already so many tips and best practices that you packaged in your answer here. But I'd like to go one step further back just to understand better, like what was that situation in your company that made you decide to implement OKR?

So what I found really interesting is that you mentioned at the start. You started a business, you were doing.. You knew what you had to do. You were doing these things, and you said that up to a certain point that actually worked. And I mean, I can guess some answers of course, like perhaps it's the size of the, it's revenues increasing and it becomes more serious, or the team size is increasing.

But what is it that made you realize all of a sudden that like, Hey, the way we've been doing things up until now, this doesn't work anymore? This is not what's gonna get us to the next few milestones for our business. What were those things like? Was it team size? Was it new hires that didn't understand what was happening?

What was it in your company that you observed? That you said, Okay, we have to change some practices right now.

Vlad: Yeah, it was a combination. As we started growing, it became apparent to us that the complexity is increasing, the level of the products and projects that we were building, the number of moving things, and different variables and factors increasing as well.

And we realized we need to start making some strategic choices and both from a client perspective. From the verticals, from the types of the technologies that we are using, and then the skill set as well, right in the team. And, I realize that I can't just have a disconnected hiring, where we're hiring people on a training, potentially on something that we're not gonna be doing. And, and having a sales function and having, marketing that are all kind of pulling in different directions.

Right? Because if we get a client that I don't have the skill set for, right? Or have a skill set that's not matching exactly, I'm gonna fail with that client. Right? So that means before we go onto the marketing and sales, before we start doing a lot of the work, with the discoveries, or hiring, right, we need to make sure that we know where we're going.

Because otherwise when we get there, because one of the functions succeed, Okay, I have a great team, but then there's a mismatch between the project that we're getting. Well, we gonna fail then. And then that's it, we're done. And, before, up to a certain size and up to certain complexity, I was able to, kind of turn it on a, you know, on a napkin and spit and say, Okay, I'm just gonna go hire a team.

I'm gonna go figure it out. The level of complexity and the skill is needed, is not that high. Or not as deep, so I'll be able to figure it out. But once we started getting to that next level. That was apparent. It was like, Okay, this is not gonna work anymore. You just, you don't have enough hours in the day.

You don't have enough time. You don't have enough money to just do what you needed to do. And you know, from what I remember before, like again, I used to rock climb when I was a teenager. And, before you get to next level, you need to be ready for that next level. You can't just go there if you're not ready, you're just gonna, it's gonna end up...

So you need to have everything set up first. You need to train.

Henrik: Interesting.

Vlad: Figure out, you need to prepare for it, and then you figure that out, right? So that was for me, that step where, okay, let's align it. Let's get the tools, let's figure out where we're going. Let's put those beacons in place. Let's have those weight points.

Let's still be flexible and agile, but let's put those beacons in place and explain it to the team. And then we can go again, right? Or we can go to the next level. I mean, and so that was the point. Again, it was a size, the complexity, and, the abilities.

Henrik: Understood that was definitely helpful clarification.

Now, you ended your previous answer saying, or you were starting to share like, some of your insights about, like the benefits that this has unlocked in your company and some of the changes that you've observed. Yeah. Could you share more about that? Like, I mean, you have a couple of years of experience with OKRs now, you had previous attempts that failed.

You kept working through that and you've gotten to a level that you see, and you have an approach now that you believe is better than what you had in the past. Now, since you've started working on this most recent approach, like what are some of the changes that you've been able to observe across the organization?

Vlad: So the first things kind of benefits fall into three categories. It's like people, the team, execution and planning. So I start with the team because the team is a foundation of everything we do. The team. I see that and I see that from behavior perspective, and I see that from the results and from the outcomes we're getting.

They get it now. You know, they see what we do. They see why we do it. They see where we're going. They see how we making changes. If we making changes, why we making those changes like in strategy, and direction. And there's no more, like I've had suggestions like, but Vlad why are we doing this? Why are we working with this — a product like this?

Why work with a client like this? Why are we changing this direction? Right? And what happened before? That's a detractor, right? Because you have a great team member, you have a great skill set, but that skill set is not working towards how to achieve the goal or results, how to get us there, how to help our clients, how to get us to next level.

But that skill set, that mind is trying to figure out why we're doing it. It's like, uh, first things like why are we doing it? Is that a right thing? Are we going the right direction? So now, they don't.. I took that problem away. Right. Or at least I'm working on that and it's working because I see that it teams like, Okay, well I get it.

Yeah. It like makes sense. And if it doesn't make sense, I can ask you like before we actually start executing on that. Right. As opposed to later on in the process. Well, the second thing is, again, that leads to execution because, um, the team is focused and it gives them more power and self-organization.

Cuz now they know the goals and they own the resources that they have and the time, and now they're able to self-organize better and self align those resources better because they don't have to come to me and say, Okay Vlad, but can I do this? No, because they see the goal and if it aligns, yes, they can do it.

If they don't, well then they might ask me about it, but ultimately now they see it. Before they either would do something that was completely not aligned or they would have to go to me. And going to me that's, you know, not practical. Especially again, in a distributed world. We try to build this synchronous self organization, self-organizing organization where there's a 360 transparency. And I like to use this model pops up from the engineering publish or subscribe.

You publish what you do. It's almost automatic and I subscribe to it, so if I need to know. But ultimately, it's a complete observability. And the team is self organizing based on the goals that are set and based on the fact that they're participating in that. And then the planning as well. I.. Now.. That's on me.

It's not necessarily OKR, but I just realized that I need to do a better job because there's no magic bullet. There's no magic. Oh, I'm just gonna implement OKR I'm just gonna put those goals, mission statements. I've had that before, but it's a daily work that you have to actually do as a leader to align your team around it, right?

The instrument is important, but if you don't know how to use it well, or you're not using it right, you're still gonna fail. So that is the part where I said, Look, I need to be more consistent. I need to bring the team in early. I need to let 'em work with this and give feedback, and participate in that stuff.

Sometimes team is more involved, sometimes it's less. But ultimately I know that they see it and I'm being transparent to them as much as they are to the rest. And what I like about tools like Perdoo is the check-ins, right? For example, check-ins are orgwide. I do my check in and everyone in the team, they see it.

And there's no, Oh, I'm just going to do my check-in and then I'm gonna distribute to someone. Like, No, our director of marketing, for example she does check-ins and she sees my checkin. She knows what I'm working on and what she's working on. And there's no, this cloud of, oh, CEO is somewhere doing something nobody knows about, and everyone was doing something else.

Because before, what I seen before is like this hierarchy where I knew what's going on in the company. Because I see everyone's doing stuff, but they didn't really know what I'm doing. And that also kind of put a dent in your, I dunno respect Towards you. Towards me,

Henrik: Yeah.

Vlad: In this case.

Henrik: Absolutely.

Vlad: What I noticed, like, But what are you, that's what I do right now.

And everyone sees this and it's like, okay, so fine. So this is great. So I'm not just sitting there, you know, somewhere and looking at everyone doing the work, I'm actually doing it a lot. And now everyone sees this, so that's important for us as well.

Henrik: You mentioned a few things that could be highly interesting for employees and for the different teams.

I mean, being more self-organized and more autonomous as a team or as an individual, for example. Being able to see progress better, not being siloed anymore. Did you have any challenges implementing OKRs across the organization, with your teams? Do people naturally see the benefits of this? Do they appreciate the benefits or was it not that straightforward?

Vlad: From my experience when I first started, it was a 10,000 feet view and, people generally, the team generally understood that it's valuable, but they didn't really buy it. Because, Okay. Well, this is great. This is valuable. Again, as I said, my goals were really overly optimistic, sometimes wishful thinking, and it was, kind of thought as just an exercise that is done there.

Like, okay, Vlad and the team is getting together, directors getting together and figuring that out. What's gonna happen? Nobody knows. And we're probably not gonna get there. Right? Or it's just gonna end up being something else. Right? Because that's been like the last year or a year before that. So the team didn't really see the end result of that execution.

Again, they couldn't put the dust together. And that's why to me, there was not enough of buy-in. And again, the first attempt, the second attempt, that was discouraging to me. I was thinking, what's going on? Right? Is that the tool? Is that the setup? But I like to look at a mirror first.

So I looked in the mirror and I said, Look, let's start with me because I think I'm not doing that implementation properly. I think I'm not putting enough work as I mentioned before, that I should have, and I think I was able to turn around. So, the second thing is to, to instill that self management into, everyday's work.

And to basically trust the team and say, Look guys, this is the goal. We agreed on that, right? You saw all this. Right. Now you have certain resources, you have certain budgets, you have certain things. It's up to you to decide how to use that, right? Because ultimately at the end of the day, you are the ones deciding what to do with your time during day, right?

And how to achieve it. So take ownership of that, and ask me or help me achieve it, but come to me as a coach, more like, not as a director to direct your actions. Right. And that's what I'm seeing right now as well, because I'm seeing with this, more ownership, more responsibility, less micromanagement.

Ultimately, I'm achieving the goal that I set as well for myself, for the organization is: I hate micromanagement. I don't like it. I want to enable the teams and give them all the tools that they need, and ultimately, have this environment where the information's freely flowing. And that's what OKR has allowed us to do because again, from the top, we're setting those goals.

I mean, are we a hundred percent perfect right now? No, absolutely not. There's a lot of still things to work on, but, from a buy-in perspective, the main challenge was they didn't see how it works. They thought it's like too broad. They didn't see how they affect it affects their daily lives and daily work.

Now they see it and it enables them to do more and better. And it changes the outputs in the organization because people take ownerships like, okay, so I know where I stand in this and I'm not just here to take orders. I'm here to move things forward with everyone else.

Henrik: Did you involve the team when you were implementing OKRs? I mean, did you involve them from the start or did you like tailor the approach together with them or is that mainly coming from the top?

Vlad: So, we kind of have a flat organization because we do different products that we're building and in every team we have different team leads and then team members. And we don't really have this giant you know, hierarchy cuz it's a small business. So I did not have any formal engagement saying like, look this is the OKRs, the trainings.

What I did throughout a year, like last year, right? I talked to different members of the team and I was soliciting feedback, and seeing how and who works better and what setups, right? And then I was able to bring them in once I put a certain blueprint together. I bring them in and I said, Look guys, this is my thoughts right now.

Like I got it based on the feedback that I work with you, and my experience. What do you think? Right? So it's not complete bottom up, but it is, I think it's a hybrid approach right now that works for our size and for our organization where it's not like, Okay, I'm just myself and a leadership team, and then here's what we're gonna be doing.

But it's not also, let's go vote on what kind of goals we're gonna be achieving. How are we we going forward? So it's a mix of here's the goals that we are thinking of based on the feedback that we received over last year based on the environment, based on the competition. What do you guys think?

Any kind of feedback, any kind of input, and then.. Is that reasonable or not? And then I work with them on setting up the key results and execution because they own execution ultimately, right? Every day. And it's up to them to do this. Like without our director of marketing our, like, for example, sales and SDRs.

They get together. It's like, Okay, here's our goal. Here's our budgets, here's the constraints that we have. Those are realistically, those are our key results. How do we achieve that?

Henrik: Like what are there any other tools and, and potentially even like frameworks that you use in your organization?

Vlad: Yes. So we have created this, well, this is our goal in one of our OKRs actually — to create the self-managing organization and the correct information, data, and then a knowledge sharing is really, really important for this to work. So we have several different tool sets depending on the purpose.

So for strategy and alignment, we use Perdoo. For product management execution we use Product Board. For, sales and marketing, we use specialty tools like for sales we use HubSpot. For marketing we use HubSpot and Zoom info. And then, we use several tools on engineering side, Jira, LinearB, it's engineering intelligence.

And then for people management, we use Lattice. And together those tools allow us to take care of the strategy, execution, knowledge sharing. Get Guru we use for the marketing and sales piece part of things. And then, for Lattice for example, it allows us to connect with our team and do a regular updates and check-ins and performance reviews.

So we kind of tie that together, so that we have people, strategy, and goals or we tie them all together.

Henrik: Yeah, interesting. Cuz that's exactly how we look at the building blocks of a company as well, right? You have strategy, goals, and people. And at Perdoo right now, we are building out that, that people component.

So we have the check-ins, we have the reflections, the engagement reports, et cetera. But the next things that we are currently working on are the peer recognition, one-on-ones, but also performance reviews. By the way, do you see value of having it all in one product or do you rather use like, specialized tools for each of those?

Vlad: I see a lot of value in having it in one product as long as the direction, again, from my perspective, the why, what and how is there and the alignment flows in a direction that it makes sense. Because right now that alignment has to be kind of artificially put together like Lego blocks, right? Because of different tools.

And some tools, like I mentioned with Jira and OKR, right? They put execution first and then strategy later. And I could not realign it in the opposite direction. So we have the tool that aligns the goals. Places them the outcomes, right? The result chain, the inputs, activities, outputs, outcomes, and impact.

You know, put the impact and outcomes first. Then you go into outputs, your execution, and then you go to the activities that you need to do, and then resources, and then ultimately the team that execute all of that, right? All one block. Yes. That would be great. So right now we have to jump through a lot of hoops to connect it all together.

Henrik: Cool. Thank you Vlad. Thank you so much for joining us on this episode today. I think it was very interesting for our listeners to hear about your experiences with OKR, the different approaches that you've tried, the challenges that you've faced and, and the approach that you've now yeah, got into that unlocks the benefits that you mentioned today in this podcast.

So thanks a lot for joining us. And I think it'll be interesting to reconnect in like six months time to see where you are, see what changes or how you further tweaked your OKR program and and how your team is taking that all in.

Vlad: Great. Yeah, that would be great. And, thank you very much for having me on and, it's a great opportunity to share experience and I hope more people out there, more teams, you know, start using this approach or improve it and use Perdoo for that.

Henrik: Thank you. Ciao Vlad.