This is by far one of the questions we receive the most in our deployments, and it will probably be one of the first questions you receive when you decide to implement OKRs in your organization is: How - exactly - to deploy OKRs in your organization.
In practice, companies do all three, but in this post we'll explain the logic and how to address this doubt/challenge in your organization.
3 ways to define OKRS
It is necessary to take a step back and understand how OKRs are defined in an organization.
Basically, there are three ways in which OKRs are defined:
- Top-down: supervisors and managers usually define the objectives and key results
- Bottom-upBottom-up: usually the teams (and collaborators) in this team come up with the objectives;
- NegotiationHere managers and teams (team leaders and employees) discuss and negotiate objectives.
1, 2 or 3 will depend directly on the level of maturity of your team and your organization, because if you do it 100% top-down - even if you explain the whole context - which already helps, teams won't feel like they "own" that OKR.
If you do 100% bottom-up - depending on the maturity of the teams and the organization - you run the risk of generating OKRs focused on outputs (deliverables that aren't necessarily linked to business results) and the teams achieve the OKRs and the company doesn't achieve the strategic goals.
This is by far the most frustrating reason why OKRs don't "survive" in organizations in the long term, because senior management is frustrated with the management model and makes up some story like "OKRs aren't for us, they're for Google".
In fact, it's for everyone, as long as you have patience and are assertive in diagnosing the maturity of your team.
Our recommendation is a mix of top-down and bottom-up, in a 1st exercise, in a ratio of 60% top-down and 40% bottom-up, but these percentages are the least important.
What matters most is the how: the negotiation process must be fun, engaging and have an atmosphere of intellectual honesty and openness so that - in fact - the teams feel they "own" the OKRs.
Some OKRS truths and results
The 4 main promises of OKRs (which they deliver) are transparency, alignment and engagement and - most importantly - a step change in results.
And herein lies the key to answering the question in the title of this post: "at what level should OKRs stop?" .... very rarely do we see a person who has the ability - single-handedly - to change business levels.
Given that no one does anything alone - and the basic premise of an OKR - is that it should represent a change in the level of results - and for this reason, OKRs should be team OKRs, because they do have the capacity to - jointly - change the results.
But what about the individual - what about the individual performance appraisal? Now we're going to demystify the 2nd most common mistake that can "kill" your OKRs program. Don't confuse KPIs or targets with OKRs.
KPIs or targets can - and should - be individual. OKRs are efforts that the organization makes to achieve strategic, step-change challenges and objectives.
OKRs shouldn't be "routine" or "business as usual" KPIs. If you look at "your OKR" and it looks like a job description, it's not an OKR. And it's not because you and your organization call a KPI an OKR that it will become an OKR.
In fact, if you confuse KPIs with OKRs, what will happen is that people will achieve the KPIs and the company runs the risk of not achieving its strategic objectives, generating frustration and "killing" the OKR program.
OKRs should be another input into the performance evaluation process, not the only one. The achievement of kpis and individual targets, as well as observable behaviors, should also be part of this performance evaluation process.
Watch the testimonial below from Daniel Abbud, founder of 7 Stars Ventures.
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