OKRs & Cognitive biases
Bruce Dorey is an Executive coach and founder of Bruce R. Dorey Consulting. He has integrated a technical background with over 30-years extensive corporate and consulting experience, almost half of which is overseas in the Middle East and Europe. In this Voices of OKR piece Bruce explains how to take advantage of cognitive biases when implementing OKRs.
Starting with OKRs
As a coach and consultant for senior executives and their teams, OKRs are now an important part of my practice. But the reason behind my admiration for OKRs is deeper and more subtle that I initially realized.
I, like many, began considering OKRs after reading John Doerr’s book, Measure What Matters, which outlines his experiences working with Andy Grove at Intel and narrates the story of OKRs. At the time, I began using them because they made sense from a logical perspective, and I intuitively appreciated the effectiveness of shorter-term goals.
After working with OKRs for several years, I have found another dimension to them which supports and reinforces their usefulness, effectiveness, and their relevance to my coaching and consulting. This dimension is the degree to which they take advantage of our human biases. I am referring to the biases described by Daniel Kahneman in his best-selling book, Thinking Fast and Slow.
OKRs and cognitive biases
OKRs are more than a goal management framework. Executed well, OKRs focus and drive the organization’s most important strategic objectives. They also inspire individuals to test and push themselves, tackling their most important personal aspirations. The cadence and frequent team updates help bond team members, providing a reminder of how their work fits into the company strategy.
An effective OKR implementation cascades symbiotic behaviors by taking advantage of our cognitive biases (making decisions based on unconscious thoughts, beliefs and perceptions). In my work with clients, I coach them to be aware of their own biases and the influence they have on all decisions and behaviors.
It’s not that OKRs are an inherently transformative solution. They are effective because of what Andy Grove found through trial and error as the CEO of Intel, driving innovation and 4,400% growth to $200B.
Dr. Grove also understood those aspects of human behavior which predictably derailed success. The 90-day cycle of the OKRs is designed to counteract two particularly harmful biases.
The Planning fallacy
The first bias is often called the Planning Fallacy. It leads us to believe what we want to believe when setting budgets, revenue goals and timelines. With home renovations, for example, we believe the job will cost less and be completed sooner, even though multiple studies show that home renovations are predictably underestimated.
The other bias that derails us is called the Optimism Bias. While the Planning Fallacy is most dangerous around initial planning and goal setting, the Optimism Bias exists constantly and can disrupt a project at any time. C.N. Parkinson was addressing this bias when he developed his famous Parkinson Law, essentially stating that “work expands to fill the time available for its completion.” Grove used this insight to reduce the “time available” from the traditional 12-month project time frame to 3 months.
Availability bias (one of the good ones)
The OKR process introduces transparency and visibility, which can trigger the Availability Bias. By being visible and conspicuous (available), your Objectives and Key Results stay on top of your mind. As a consistent reminder of the important tasks at hand, Availability Bias drives focus and engagement.
As focus and transparency interact, they elicit accountability and discipline. Because tasks are public, transparent, and top of mind, they get done. The public transparency sets up a natural competitive tension, which tends to motivate. This also drives trust and psychological safety, since team members know what is expected of them and others. Focus and transparency working together also compel clarity, which is where a good software program dedicated to the OKR process is particularly effective.
Why should you be aware of these biases when using OKRs?
Cognitive biases result from the way we process information. Our brains have evolved to use such biases to quickly absorb large amounts of information, deal with challenges, and create strong bonds. But identifying and expecting cognitive biases can help you counter their negative effects and decision-making errors.
Except for the awareness of cognitive biases you should develop, it is best to get feedback on your OKRs to counter thinking biases that might have propelled you to make the wrong conclusions about your goals and plans. Working with an external consultant can help with that.
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