Why do OKRs fail?
Not every team that decides to implement OKRs will succeed in doing so.
We, at Gtmhub – just as other vendors – will give advice and point out solutions, but the fact is that OKRs are not a right fit for every team. In this post we will share what we’ve learned over the years working with different businesses – as well as what we’ve learned from our own experience. We’ll focus on the reasons why teams failed and/or abandoned OKRs.
In our experience, the reasons for OKRs to fail are either technical or fundamental. Technical reasons are fixable, though it’s not always easy. On the other hand, fundamental problems are a sign that organization should look into different management methodologies.
1. The Google video
I have yet to talk to a person about OKRs that doesn’t mention the Google video as the place where they’ve first learned about OKRs. It really is a great video and has done amazing thing for evangelizing OKRs to a wider audience.
The problem however is, that when people start (and end!?) with that video, often they have a solution and are looking for a problem. Obviously, most – if not all – companies aspire to be like Google. Taken outside of context, however, it is trying to be like Steve Jobs by being harsh to your colleagues.
Most of the teams that implement OKRs simply because someone watched this video will fail. Some will learn and successfully restart, others will abandon OKRs.
2. Missing data
The basic mechanics of OKRs (Objectives & Key Results) include setting a qualitative objective (e.g. Improve on-boarding) and quantitative key results (e.g. increase T+3 logins by 8%). When team is data aware and data driven, OKRs feel very natural and adoption is pretty straightforward.
The reality is, that many businesses don’t have widely available metrics – even the basic ones. For OKRs to be useful, data needs to be:
- Available in general
- Available to everyone that needs it
- Up-to date and easily accessible
Teams that don’t have generally available and up-to-date data will tend to use their OKRs as an elaborate to-do list. Soon after, they’ll figure out that the overhead that comes with OKRs is simply not worth it. When this happens, there are really only two options: company gets serious about data or company abandons OKRs.
3. The treadmill syndrome
I’ve decided to be fit and healthy, so I bought a treadmill. It is a divine form of procrastination. I could give up sugar, wine, walk more – but that’s so much harder than buying a treadmill. Unfortunately, as the saying goes “you cannot out-excercise bad diet”.
Some of the teams that we’ve worked with had a hard time focusing on what is important (to be frank, we at Gtmhub also had this problem now and then). They’ve tried to introduce OKRs, only to face the same problem again – lack of focus. Just to touch on the treadmill analogy, OKRs can help companies focus – but they cannot make them do so.
The bottom line is, OKRs are a tool or a framework, that helps teams achieve focus and alignment – but it’s not magic. Teams that fail because of treadmill syndrome, generally fail pretty quickly with OKRs and very rarely they attempt to restart them.
4. Wrong cadence
Google and many other suggest that team should plan their OKRs for a quarter and a year. That is perfectly fine for Google – obviously – but it may not be fine for your team or businesses.
What is the right planning cadence depends on many things. Small startups typically move very fast, so 3 months is an eternity. Similar thing also happens in larger companies that are growing very fast. The basic rule here is: the faster the change, shorter the cadence. There is obviously an overhead with each planning session, so if you do choose a shorter cadence – keep the planning lean.
When wrong cadence is chosen, teams will usually stop updating their OKRs very soon. Often, teams will report that their OKRs are obsolete or irrelevant by the time everyone is done setting their OKRs. Once the team is not paying attention to OKRs, the process is already dead – even if not officially. Teams that choose wrong cadence, can recover relatively easily by choosing a more appropriate cadence.
5. Being religious about the “best practices”
OKRs have a lot of “best practice” rules, though they differ depending on who are you talking to. Trying to follow the rules when they don’t make sense, is a quick road to bureaucracy and before you know it your teammates will start resent the process (perhaps even you ;)).
Some of the examples of this problem are: making everyone own OKRs, even when it doesn’t make sense; force aligning everyone’s objectives, insisting everyone has 3 objectives and so on.
This is a rather typical phenomenon with every new paradigm. Because the practical knowledge and experience are scarce, people always tend to follow the rules blindly. Going down this road will usually result in a lot of push-back from the team and eventually, when the critical mass forms, OKRs will be abandoned.
At the same time, this is one of the easiest things to fix: just talk to your team and adjust the process in a reasonable way.
When OKRs simply don’t make sense
So far we’ve focused on common reasons why the implementation of OKRs fail. Now, it’s time to face the elephant in the room – when OKRs fail, because they shouldn’t be implemented in the first place.
Organizations and teams which are experimenting are not a good fit – unless, there is a way to structure the experiments. OKRs are very much about execution, doing something better. So if it’s unclear what needs to be done and how the success will be measured, OKRs are generally a waste of time.
Another type of organizations where OKRs don’t make a lot of sense, are strict, micromanaged environments. Now, there is nothing wrong with such organizations (for example, you wouldn’t want your surgeon to push herself to operate your heart faster, nor would you want your pilot to try to save fuel by sporadically turning off engines) – but, in organizations where what needs to be done is well known and a way of doing it is prescribed, implementing OKRs makes no sense.
Finally, I would say that so called “lifestyle businesses” or businesses that are profitable and are not looking for growth, would not be served well by OKRs. OKRs are about changing status quo, about pushing oneself one step further, about ambition. If you are running a profitable restaurant and have no desire to turn it into a chain, OKRs are not for you.
OKRs are one of the simplest goal and performance management frameworks out there. Though, however simple, OKRs bring about change and do require certain characteristics of the teams that implement them.
OKRs implementation mostly fails because there is no strong use case for using them (just hype), the company is not data driven, there are fundamental decision making problems or simply, the mechanics of the process, are being applied without the context.
Some of the problems can be solved, either by fixing the fundamental issues of a team or by tweaking the OKR process to fit the team. On other side, there are teams and organization that are simply incompatible with OKRs – and that is fine.
If you’d like to discuss your own implementation of OKRs, you can reach us at any time.