Schedule the Meetings in Advance

In a study, university students were asked just prior to their Christmas break to name a project they intended to work on and complete during their upcoming vacation. The proposed endeavors varied widely, from writing an important paper to settling a family conflict, to engaging in a challenging sports activity. Participants were also asked whether they had formed intentions on when and where they would get started to work on the projects. When the results were tabulated after the holiday, fully two-thirds of those who had formed “implementation intentions,” by noting where and when they would work on the task, had successfully completed it. However, only about a quarter of those who did not form implementation intentions were successful.⁴ Hundreds of subsequent studies have replicated this effect, demonstrating that in order for real change to occur, we must move from noble ambitions to specific behaviors that outline in detail when and where we'll do the work.

Scheduling review meetings in advance may appear at first glance as a piece of banal and common sense advice, but we've both witnessed change programs (OKRs and others) that have died on the vine not because of some fatal flaw in the program itself, but simply because when the framework was up and established the organization never followed through on holding regular meetings to discuss and learn from results. In the study cited above, the researchers deliberately chose the Christmas holidays because they knew the students would be bombarded with potential activities that could impede them from completing their stated goal. Parties, shopping, time with family, all of these and many more are enticing alternatives to completing an important project. For most companies, in that sense, every day is like Christmas. There are innumerable issues and activities vying for your attention, and thus it's easy to put a “review meeting” on the backburner in favor of a seemingly urgent need that demands your full response immediately. Clear the change path for your team by scheduling your review meetings in advance and making them a sacrosanct commitment.

We hope we've convinced you to get the quarterly meetings on your calendar and never, ever cancel them. Assuming that's the case, and you've assembled your team to review results at the end of a quarter, let's look at a number of things you can do to maximize that investment.

Manage Your Expectations

Ulysses S. Grant once sat for a photo shoot with the famous Civil War photographer, Mathew Brady. Finding the studio too dark to work in, Brady sent an assistant up to the roof to uncover a skylight. The assistant slipped and shattered the window. With horror, the spectators watched as two-inch shards of glass, every one potentially lethal, fell from the ceiling like daggers, crashing around Grant. As the last pieces hit the ground, Brady looked over and saw that Grant hadn't moved. He was unhurt. Grant glanced up at the hole in the ceiling, then back at the camera as though nothing had happened at all.⁵ Sometimes the results of OKRs will not be what you expected or hoped for. It is in those moments you need to be Grant-like: Steely, resolute (and maybe lucky). Have faith in the process and maintain your commitment to learning. Surprising results may come in two forms, poorer than expected, and, conversely, better than expected.

Scoring low on key results is entirely probable, especially as you begin using the framework. In your zeal to generate breakthroughs you may be overly optimistic in projecting what you can accomplish during the quarter, setting targets that are ultimately unachievable. As we discussed earlier, hopefully any unrealistic objectives will be identified early in the process during either your Monday meetings or the mid-quarter check-in and can be dealt with accordingly at that point. However, it is possible that end-of-quarter results will disappoint. If that's the case, your goal should be to critically examine what happened and learn from any less than desirable outcomes.

At the other end of the spectrum are OKRs scores that all approach a 1.0, at first blush, a stunning accomplishment worthy of wild celebration. But let's not pop the cork on that Veuve Clicquot quite yet. Chances are, again, as you become accustomed to setting and scoring OKRs, there is every bit as high a probability that you will set targets that are too low, as you will targets that are excessively demanding. In this case, a set of 1.0 scores shouldn't signal a party but, again, an opportunity to calibrate and craft more appropriate targets going forward.

According to most OKRs practitioners and clients we've worked with, the sweet spot for results are scores hovering around 0.6 and 0.7. But, regardless of the score, as we argued above, what really takes precedence is not the number but the conversation the results produce. Let's consider some ways to stimulate that discussion.

Solicit Feedback from Everyone

What is your favorite Pixar movie? Wall-E maybe? How about Finding Nemo? Or perhaps 2015's Inside Out. There are many others to choose from, all exemplars of a standard of excellence that is unprecedented and almost entirely unheard of from a major Hollywood film studio. Pixar's extraordinary success can be attributed to many factors: compelling and universal stories, talented directors and writers, and stunningly imagined and rendered worlds, to name just a few. However, perhaps the most significant contributing factor is their inclusionary process. When Pixar films are in production and screened at the studio, all employees, literally everyone regardless of their field, are asked to send notes to the film's creators. Pixar directors consistently cite this process of soliciting all voices in a film's final version as key to their success.⁶

We encourage you to follow Pixar's lead and, when reviewing results, include your entire team in the process. After all, transparency can be one of the biggest benefits of using OKRs. Cloistering your management team behind closed doors to interpret your quarterly results not only impedes support for the OKRs program but also robs you of one of the greatest sources of potential value at your disposal—the brainpower of your team. Your goal should be to establish a sense of ownership in OKRs from every single employee, regardless of rank or function. The best way to engender that feeling is including all voices in the ongoing OKRs dialog.

Ask Simple Questions to Get the Conversation Started

The organizational psychologist (among many hats he has worn) Edgar Schein tells a story of how posing a simple question made him a star in the eyes of one CEO client.⁷ The executive was concerned that his company's culture had become immovable and frustrating. He noted that just the previous day he had a staff meeting of his top 15 people who always sat in the same place at the table. On this particular day, only 5 people were able to attend and, despite the surplus of available seats, each person sat in his or her usual position, causing them to be scattered around the enormous table. “You see what we're up against?” the CEO lamented to Schein. He then gazed at the consultant expectantly, hoping for affirmation and support (and possibly a magic solution). Schein thought about the situation for a few moments and then, rather than offering any solutions, he simply asked, “What did you do?” The CEO replied that he didn't do anything, and in that moment a light bulb went off in his head. The frozen culture was most likely an artifact of the executive team's inaction. For the next several hours, they explored ways in which they were complicit in their own situation, and how they could improve it. Over the next year, they were able to transform their culture, all the changes stemming from a humble and simple question.

At times, the situations you encounter appear nastily complex, and it's difficult to find your way into the subject. When that occurs, the temptation to offer solutions is second nature to most of us. After all, that's how most “stars” rise through the corporate ranks—by providing answers to anything and everything that ails the organization regardless of how intractable a problem may appear. Any void when a challenge exists, any deafening silence on the part of a leader, can mistakenly be interpreted as a lack of knowledge, impacting the individual's ongoing credibility. No wonder we all talk too much in meetings. But a stream of spontaneous answers can often lead to difficulties when the underlying issues aren't properly understood, or the ramifications of the response haven't been carefully considered. Perhaps Peter Drucker said it best when he noted, “The most serious mistakes are not being made as a result of wrong answers. The truly dangerous thing is asking the wrong questions.”⁸

As appealing as it may be to rattle off solutions for every issue the business faces, upon deeper deliberation, it's usually evident that most problems are immune to simple solutions. Always start with questions—the simpler the better—when reviewing OKRs results, before proceeding to possible answers. The deeper you burrow into a challenge or issue, the more elements of it you expose. With the problem's dimensions standing in bold relief, you're much more likely to then generate insights.

Diagnose Issues Using the “Five Whys”

Consistent with the advice offered in the preceding section, one very simple question you can ask, one that inevitably provokes careful thought and yields results, is “why.” And in the spirit of “You can never get too much of a good thing,” we suggest you ask it five times in order to resist the gleam of surface issues and get to the root of the problem at hand, which is typically buried much deeper. That was the original intention of the method as conceived by Sakichi Toyoda and used at the Toyota Motor Corporation. Today, the technique is employed in many forms (some people prefer three whys) and for numerous purposes, including strategic visioning, but we feel it is best suited to assist you in diagnosing issues when reviewing key results.

In his book The Lean Startup, Eric Ries describes how using the five whys led to the development of an important employee training initiative.⁹ His firm, the metaverse website IMVU (a metaverse is a virtual-reality space in which users can interact with a computer-generated environment and other users), described as the world's largest 3D chat and dress-up community, suddenly began receiving complaints from users after a new version of the product had been released with a key feature disabled. Obviously, a metaverse relies exclusively on active and engaged users, and thus it was crucial that Ries and his team discover what was wrong. So they turned to the five whys:

1. Why was a key feature disabled in the new release? Because a particular server failed.
2. Why did the server fail? Because an obscure subsystem was used in the wrong way.
3. Why was it used in the wrong way? Because the engineer who used it didn't know how to use it properly.
4. Why didn't the engineer know how to use it? Because he was never trained.
5. Why wasn't the engineer trained? Because his manager didn't believe in training new engineers because he and his team were “too busy.”

Ries and his team began their inquiry fully anticipating that a technical fault was to blame for the customer discontent. However, on using the five whys their assumptions were shattered when they determined the true cause of customer complaints could be linked to a very human managerial decision. This was undoubtedly a startling, but equally insightful and beneficial, revelation. As a result of their analysis, IMVU launched a training program for all new engineers. Whenever you face a perplexing issue, one that defies easy, off-the-shelf solutions, challenge your team to answer why five times to uncover the more likely root cause at play.

Learn from Mistakes

Back in August 1928, Alexander Fleming was anxious to go on vacation. So much so that the Scottish biologist left a pile of dirty petri dishes stacked up in his hospital lab. When he returned, most of the dishes had, of course, been contaminated, as you might expect. Fleming discarded most of the dishes in a vat of Lysol, but when he came upon one containing staphylococcus, he hesitated. The dish was covered in bacteria except where a blob of mold was growing. Around the mold was an area free of bacteria, as if the mold had blocked the bacteria from spreading. Fleming had a flash of insight that it could be used to kill a wide range of bacteria, and from his “mistake” of leaving petri dishes out during his vacation, penicillin, one of the most widely used antibiotics today, was born.

Today, “We need to encourage risk taking and learn from our mistakes” is as common a sound bite from executives in the corporate world as the “We're going to take it one game at a time” refrain echoed by athletes of every sport around the globe. It's become popular, of course, because it's true. The only sure path to success in any endeavor is to tolerate and learn from failure, sometimes repeated failure. So it is with OKRs. We encourage you to embrace a spirit of inquiry as you review your results each quarter. What at first glance may appear to be an ignominious and frustrating failure of some sort could be cloaking an innovation that will swiftly differentiate you from competitors.

Leaders Should Speak Last

In working with executives around the world, we've encountered a vast array of personality traits and leadership styles, but in our experience one thing most CEOs share in common is their stated desire to harness the wisdom of their subordinates when making decisions. We've lost count of how many times a CEO has whispered to us just before the start of an important meeting: “I'm going to just sit back and see what the team has to say.”

Whether they are consciously aware of it or not, this inclination to listen before speaking has significant ramifications for the dynamics of the meeting. Research has consistently demonstrated that if a leader contributes an idea first, group members will often unwillingly follow suit, effectively ending contemplation of alternative ideas.¹⁰ To phrase the effect of this much more colloquially, “If something interests my boss, it fascinates me.” It's human nature to feel the stifling influence of an executive's comments and fall into line behind them. Therefore, if you're a leader and wish to ensure that you are gathering the best ideas available from your entire team, be sure to listen first and speak later. The team will appreciate your careful consideration of their thoughts and you can use the opportunity to weigh their input before reaching and sharing your own conclusions.

How Many People Will Use the OKRs Tool?

As with nearly any software category, different OKRs vendors target organizations based on their size. Let's divide the market into two categories: Large and small/medium. Any organization with more than two thousand employees we'll classify as large. Small and medium-sized businesses are those between a hundred and two thousand employees.

Large: Vendors attempting to sell OKRs applications to large organizations may also sell to midsize companies, but typically not to very small firms (those we identified above as numbering a hundred or less), unless there is a strategic reason to acquire the customer. Software offered by vendors targeting large firms is designed to accommodate thousands of users, and the engineering team proactively seeks to ensure the product is available on every platform including mobile phones and even smart watches.

Small/Medium: Vendors selling to small and medium-sized companies will often sell to divisions of larger organizations but are, of course, happy to work with organizations of limited size as well. Since these vendors themselves are smaller, their products may not include every bell and whistle the larger providers can offer. However, for smaller firms with tight fiscal constraints, their software may offer the perfect match of functionality and price.

Do You Want an OKRs Tool Designed Primarily for Executives, Teams, or Individual Contributors?

The software market is also stratified based on primary users of the system. Each solution targets a different key user for the tool, typically skewing toward either top leadership or individual contributors. When we ask vendors whom their software is primarily designed for, they are very quick to answer. Some solutions are clearly designed for the individual contributor, while others are geared for the CEO. Still others may be configured chiefly for team leaders. Exhibit 5.2 outlines how tools designed for the CEO compare with those targeting teams and individuals as key users.

Systems designed principally for the individual contributor seek to enable workers to make measurable progress on goals, see how their goals connect to the bigger picture, and increase employee engagement. Those intended primarily for the CEO, however, may increase employee engagement, but are primarily envisioned to reduce surprises and enable the CEO to take proactive actions such as allocating resources based on early warning alerts. Tools designed for teams strike a balance between the two other approaches.

Will You Score OKRs Based on Entering Predictive Data or Progress-to-Date?

All OKRs tools we've analyzed require that users enter data to update status on OKRs throughout the quarter. However, when you enter data about progress on your OKRs, what do you wish to communicate? Do you want progress to date or predictive data outlining expected results at the end of the quarter?

Historical data reflect past achievements and progress-to-date. For example, if a user has created a key result to add 20 customers, and 10 are added, the user may enter “50 percent complete” into the system (or may enter “10 customers”) and the system automatically translates the input to a progress of 50 percent toward the target.

Predictive data reflects the latest forecast of future achievement levels. Each time the users enter data, they are communicating the anticipated likelihood of reaching the goal as set at the beginning of the period. The pros and cons of historical and predictive user inputs are summarized in Exhibit 5.3.

Do You Want Software That Makes Use of Gamification?

Gamification is typically defined as the use of game mechanics and rewards in a non-game setting. The goal is to increase engagement and drive desired behaviors. Gaming is an immensely popular pursuit around the globe, even with senior corporate executives. One study found that 61 percent of surveyed CEOs, CFOs, and other senior leaders say they take daily game breaks at work.¹¹

The techniques employed in gamification include (but aren't limited to) providing users with goals to accomplish, awarding them with badges, engaging them with competition, encouraging them to collaborate in teams, giving them status by leveling up, and enabling them to earn points.¹² Of course none of this is new. Karate has long awarded different-colored belts as a visible way to signal status. And “belts” are used in the workforce as part of the Six Sigma methodology. Boy Scout badges and medals in the military perform similar functions. And of course, chances are you're part of at least one frequent flyer program, which have relied heavily on gaming elements such as point accumulation, status, and leveling up. What has changed, and made gamification a growing force, is the availability of big data that enables businesses to harness these techniques in an elegant and cost-effective manner.

Almost all software applies some form of gamification. Anyone who uses LinkedIn to build a professional profile, for example, has experienced it. Users receive feedback on their profile via a “percent complete” status bar. Each time the user performs a desired behavior, such as loading a photo or adding a skill to their profile, they are rewarded with percentage complete points. This is a simple but powerful and well-designed use of gamification.

In fact, it's so powerful that you might start worrying about whether your LinkedIn profile is in fact complete. We just checked Ben's profile and found out that he's an “All-Star,” though the remaining progress in the circle is making Ben wonder what he can do to make the entire circle blue. Since LinkedIn's use of gamification is impacting Ben and he feels inspired to do more, this appears to be a good use of the technique.

While we find this use of gamification somewhat valuable, others may see it as distracting and confusing. Still others may seek more gamification. Perhaps a feature that allows them to see how their profile stacks up against their peers, for example. You need to be clear about your company's attitude toward gamification since some people will enthusiastically embrace it, while others may consider it offensive to receive a virtual badge for taking certain actions in the software system.

Software vendors in the OKRs space have varying approaches to gamification, some incorporating only minimal “games” while others offer more extensive game-like features. Each of the dozen or so solutions we've researched falls into one of three categories.

Minimal gamification: A distraction is how these vendors generally view gamification. Users may be able to flag goals as “green” or “on track” or “red,” which equates to “not on track.” These are basically binary inputs. The systems typically will not feature badges or reward systems for making progress.

Some gamification: These vendors see gamification as a strategic tool that can be effective in some instances, but should be used sparingly. Systems in this vector provide higher resolution inputs, providing users with more options to define progress. They also may encourage frequent key result updates by making it easy to see which were (and were not) recently updated. Finally, usage metrics may be employed at this level of gaming, showing, for example, how many times a key result has been viewed.

Extensive gamification: In this instance game techniques are expected to drive behaviors such as defining key results, updating progress, and rewarding high performers. Points, badges, and leveling up will all be employed in order to drive goal achievement. OKRs may be scored using an automated system that provides more points for more challenging or higher-priority goals.

Should Your OKRs Solution Get Everyone on a Weekly Cadence?

Once OKRs have been finalized, how often should performance be reviewed? Daily, weekly, biweekly, monthly, or just whenever you feel like it? Do you want to enable teams to review progress as often as they see fit or will you require that every team update their OKRs on a weekly basis?

Some OKRs solutions totally ignore this question. Other solutions emphasize a weekly cadence inspired by weekly status reports and team meetings. Yet others offer features that encourage frequent updating but do not define a standard cadence. Should you choose to evaluate OKRs applications, we advise you first to think about whether you'd like to require a standard cadence across the organization. Software with a minimal focus on cadence does not encourage users to adopt a review standard and update goal progress. These tools may enable users to check a box in order to request reminders to update goal progress on a weekly basis. The tools that are built on a weekly cadence require all users to update status each week. They frequently include charts that visualize progress on goals week over week.

Once you've considered requirements, it's time to get on the phone and start arranging product demonstrations with software vendors. We're sure they'll love to drive the product demonstration. However, we recommend writing a list of questions that are important to you prior to the product demo so that you can control the discussion. After all, it's your money! So…