Google didn’t become one of the most valuable brands in the world by accident. It’s been rated the #1 place to work by Fortune for seven of the last 10 years, and called “employee heaven” by leadership advocate Will Marré.
The secret to their employee engagement is a little trick they picked up from Intel: the OKR system. OKR stands for objective and key results. The premise of OKR goals is that every employee, from entry-level to CEO, is working towards a single objective that aligns with the general mission of the company. Each objective has key results which serve as measuring sticks for the success of that objective.
Now used by tons of tech companies, the OKR system has become hugely popular in the tech community. But misuse of OKR goals can not only prove ineffective—it can prove fatal to your organization. Here are four disastrous goal-setting mistakes that startups make.
Your OKR Goals Aren’t Quantifiable
You walk into a meeting with your team and ask each employee how successful they were in achieving the goals you guys set last time. Their answers are all something along the lines of “kind of” or “I can’t really tell” or, even worse, “I thiinnk so.”
The problem is that your team set qualifiable goals, making it impossible to test whether they’ll be achieved or not. Here’s an example of a non-quantifiable OKR goal:
- Objective:
- Increase our companies brand recognition
- Key Results:
- Increased social media presence
- Focused more on blog promotion
- Improved our referral program
None of these key results are measurable. Would engaging with one user or with 3,000 users mean that we attained our key result of increasing social media presence? Does “improve our referral program” mean that we must change the UI of the page it’s on or that we dedicate more of our budget toward advertising it?
The only way to make goals measurable is to make them quantifiable.
Solution: Every OKR Goal Needs a Number
John Doerr, the board member that brought the concept of OKR goals to Google, says that one of the biggest mistakes that businesses make is not putting a number or a date on their goals.
Here’s how we can amend the above example to make the OKR actionable:
- Objective:
- Increase our companies brand recognition within six months.
- Key Results:
- Increased overall social media engagement by 15% by July.
- Increased click-through rate on our Facebook by 3% by July.
- Extended reach of referral program by promoting it on three new platforms immediately.
This way, just by taking a glance at the analytics, you can see whether your team achieved their OKR goals. This takes all the subjectivity out of measuring the success of the team.
Your OKR Goals Are Dictated
88% of workers in the US are disengaged at their jobs, costing the US economy about $500 billion. If you delegate OKRs from the top down, then you are only perpetuating this epidemic. When each employee gets no say in what they work on or how they achieve their goals, they feel dissatisfied, overworked and under-appreciated.
But the entire idea behind OKR goals is to increase engagement so that everyone can participate in making the company more productive in achieving its goals.
Solution: Make OKR Goals a Product of Negotiation
OKR goals should come from the bottom up. That means managers have to let their employees decide on their own OKRs, and then use meetings as a time to negotiate their objectives.
Here’s what an I Done This product manager’s OKR might look like:
- Objective:
- Create a checklist feature within the task list on the desktop app
- Key result:
- Create a user satisfaction survey and include it in tomorrow’s newsletter
- Create three mocks and send them to the engineering team by the end of next week
- Get a time estimate from the lead engineer for the next product meeting
Now let’s say her supervisor has a different objective: for the company to become more mobile-friendly. The negotiation might result in the product manager’s team working on the checklist feature within the mobile app, leaving both parties happy and working toward one common goal.
Your OKR Goals Are Used as Employee Evaluations
Google expects its employees to accomplish 60% to 70% of their key results, pushing employees to pick goals that are slightly out of their reach.
If you’re using OKR goals as performance indicators, you are asking your employees to set realistic goals, putting a cap on their ambitions. But if you take the negative consequences out of goal setting, then your employees will reach past what they think their limits might be.
Solution: Use OKR Goals as Process Evaluations
If your employees aren’t hitting 60-70% of their objectives, then you know that the issue is one of these three problems:
- The OKRs were set too low
- The OKRs were set too high
- The employee isn’t working as productively as they could be
If the OKRs were set too low, it will be immediately obvious because the employee will be easily reaching the 90-100% mark. The solution is to set these benchmarks considerably higher.
If the employees aren’t reaching their OKRs, work with your employee to identify stumbling blocks that impeded them from accomplishing their task. If there were no stumbling blocks, work with the team or employee to come up with more realistic OKRs.
The achievement of OKRs should be a collaborative effort where you are working with your team, not against them.
Your OKR Goals Don’t Align with Company Goals
A common issue in SaaS companies is a misalignment between what the CEO is envisioning and what the engineers are deploying. One study showed that 67% of HR and IT organizations don’t have their business unit and overall corporate strategy aligned.
OKR goals should be used on every rung of the ladder, from CEO down to office managers. Otherwise, it’ll be everyone working on their own projects without any unified idea of what the ultimate objective for the company is. This will result in a decrease in the influence of the CEO, making it less of a company, and more of a shared office space.
Solution: Set Every OKR Goal with the Company’s Objective in Mind
Part of the give-and-take in your negotiations should be trying to find the objectives that the individual proposes that fit into the goal of the group and the overall goal of the company.
For example, tangocode, a software development company, set their overall corporate objective to “improve customer satisfaction by X%” For the engineering department, that meant that all their goals had to be related to improving the quality of the software they were making.
One manager’s objective was to put into place a peer review system, and one developer’s objective was to find an application that could help with reviewing code.
Share the Company Vision
Google’s OKR goals are public information within the company. Every employee, whether it’s Larry Page or a brand new Googler, can check in on the OKR of any other employee. This keeps everyone’s objectives at the front of their mind and unifies the ambitions of the company with the ambitions of the individuals.
When an employee’s focus is completing his own tasks without any kind of big-picture goal in mind, the tasks can feel mundane and unimportant. But if you align every individual’s mindset with that of the CEO, everyone will work their hardest to achieve their collective goal, making the possibilities for what you can achieve as an organization, limitless.
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