What to avoid when planning OKRs with your team

There are no two teams that have the same way of planning their OKRs. Differences are around all the cycle from the plan, track, report and forecast metrics. The process of using OKRs is a means for a specific end. Different companies have different business goals. However, many mistakes and mismanagement of OKRs can be common across teams and businesses.

Before dipping down on the 3 common mistakes in planning OKRs. It would be useful o mention that are two main approaches for doing OKRs from my experiences.

📙 Fist approach is what John Doerr wrote about in the book “Measure What Matters: OKRs: The Simple Idea that Drives 10x Growth”. Where objectives are represented as what the team or company wants to achieve in a single sentence. Then the key results are the quantifiable steps to achieve the objective.

One of the most interesting points of Doerr is the four superpowers of the OKRs, focus, align, tack and stretch boundaries. Along with the CFS, the concept stands for conversation, feedback, and recognition. Where the team has reflections, open discussions and open feedback creating a continuous growth approach in the execution and implementation of OKRs.

In addition, Doerr suggests that each OKR should have only one person responsible to maintain ownership and accountability to achieve the objective through the key results. Also, the mission shouldn’t be confused with the objective. Where the mission is the directions and the objectives are the steps to get there.

📗A second different approach to the OKRs is to have the main business goal and the KPI/ metric for the goal be transposed into objective and key results.

For example, if we have a business goal to reach in the next 12 months a £1M ARR along with the KPI/metrics of a 15% month-over-month (MoM) growth. We can transpose this into OKR. Where the objective is what we want to achieve described in a singular sentence. Then the key results will indicate respectively: what we want in numeric terms (£1M ARR), what we don’t want (churn %) and what will make it sustainable over time (margin %).  

Objective: sustainable growth of the revenue for the next year.

Key result: £1M ARR by Dec

Key result: monthly churn < 4%

Key result: average margin 70%

One interesting point in this approach is to factor in how the OKR can’t be tricked. For example, in the case of the £1M ARR key result a team can start offering discounts to get more clients to the door. However, this can trick the revenue key result because each discount can be detrimental to the growth of the revenue. This doesn’t mean that you never give discounts but this is something to be mindful of for a revenue key result. In the OKR plan, this can be solved by adding an extra key result like a maximum discount of 10%.

Here are the 3 mistakes and an extra bonus point, that many teams do wrong when planning and executing OKRs.

👆 First point: unrealistic objectives and an exorbitant number of OKRs

Picking many different OKRs could dilute the team’s focus. For example, if you have 10-20 different OKRs in your team and many are shared between different functions and each function has on top their own different objectives would be too much.  

Analyse this scenario from a function perspective. If a commercial function has 4 main objectives and an additional 3 to 6 shared objectives. It will become very challenging to plan and maintain a good execution against the plan. Also in many cases, it would be confusing for the function members to prioritise their time and track the progress across all these objectives.

In fact many small teams on average pick from 3-to 5 companies’ OKRs. Having more than 10 company OKRs can create ambiguity for the team and spread their focus to tin.

Rule of thumb if you are unsure if an objective can contribute to the main business’s goal. In the majority of the case would be worth removing this objective and focusing on the main impactful. Simplicity is key to dedicating more of the focus to execution but also maintaining the ability to zoom out from the execution and reassess the objectives periodically is very important.

🙌 Second point: Who would be responsible for this?

The company’s OKRs should be split at the department level and then personal level. More granular is the contribution and so responsibility for a single OKR and more actionable it would be. In fact, if you can’t split an OKR into departments and then attribute it to a single person you should reconsider your OKR. If you have OKRs that are shared among different teams need to split them up further. When two or more teams have the same OKR the responsibility is not clear and it can create misalignment.

For example, if we have a commercial objective to increase the acquisition of new users. The commercial team would be able to calculate how much they have to increase the traffic to the website given a specific conversion rate to reach the OKR. Then for a singular team member like a content marketer, it should be possible to track the target number to produce to achieve the content pro-rate traffic objective for contents. Also, it is not recommended to have shared OKRs across different functions as destabilise clear responsibility and then actions.

👉 👈 Third point:  Back of the napkin OKRs calculations for key results

The importance to set clear responsibilities is vital to break down the key results for each objective and then calculate metrics and milestones. These calculations can be done in many ways. I found useful teams that use past data as a baseline to forecast their future desirable growth rate. Then work backwards the result on what they need, how they need and give a range of possible execution times.  

There are many things in reality that can expand the time to reach a specific milestone. One thing to avoid is to be over-optimistic and keep your feet on the ground-based on your numbers and what is possible. Having unrealistic goals or an exceptionally optimistic view of the time to achieve a milestone just puts unnecessary pressure on the team pushing them to cut corners.

This behaviour of cutting corners can just deliver a few months of quick wins. Then you will find yourself just investing in what can pay off in the short time rather than building growth strategies that can deliver in the next 3-6-8-12 months and beyond. It is important to have a balance between the time you are allocating for short wins and the time you are using in the present to harvest in the future.

🎡 Bonus point: Automatise dashboards to real-time tracking progress

Another common mistake is to have a very long process to report progress against the OKRs. If the reporting is done daily, weekly, bi-weekly or monthly and you do it manually. It would add up and get a lot of time invested for reporting and not in the execution.  

It is a good practice to decide first all the top metrics that you would report from your key results and objectives. Then create an automatise dashboard to let all the team in real-time track the performances against the targets. A good practice is to remove all the metrics and data that are part of your OKRs in the dashboard to reduce the possibility of misalignment and confusing team members.

If you want to do the extra mile, you could automate the daily, weekly, bi-weekly or monthly reports and pre-schedule them to be sent via, email, Slack or any other channel to the key people that contribute and need to be informed about these metrics.

🥡🥢 Takeaways

Less is more. Start small with 3-5 OKRs and then see if you are making a dent in your annual goal. Spending a good amount with all your team to decide the OKRs is vital. Also, bringing people into the decision makes it easier to have them buy into them and be more driven for the execution.

The OKRs are in constant questioning and reviewing from all the team at the same time you are executing them. However, it is important to be careful to balance the content review of OKRs with the commitment to execution. In many teams, a constant questioning of OKRs doesn’t make your team hyper agile but is an indication that you haven’t planned properly and you're changing your direction too often. Automatise the reporting and dashboard is a boring job but can save you and your team much time especially if you compound 30 minutes of weekly reporting for a year, that is 24 hours of annual reporting.