Whoever neglects day-to-day business, dies today;
whoever neglects strategy work, will die tomorrow.

Objectives and Key Results (OKRs) is an agile management system for goal-oriented and up-to-date employee management. Invented by Intel and popularized by Google, this mode of operation has now found its way into other countries.

OKR offers many advantages, but there are also many myths about it. Therefore, we would like to clarify the five most common false assumptions and outline, from our point of view, the most important success factors.

Myth #1: OKR is a good way to manage day-to-day business

First of all: The main benefit of OKR is managing strategy implementation (“strategizing” and “strategy execution”). However, in order to have time and resources to work on the strategy, the people involved have to free themselves from day-to-day business and create extra space to focus on this work. Of course, this creates time and resource conflicts. As a result, this area of tension needs to be addressed and resolved in a sustainable manner.

At the beginning of an OKR implementation, key questions managers should ask themselves are: Which of our day-to-day business activities actually follow the strategy? What can I delegate or even eliminate in order to free up more time to work on OKR?

Generally speaking, day-to-day business and OKR are closely interrelated. Objectives can subsequently become part of everyday activities and daily work can be affected by the objectives. Nevertheless, it is critical to distinguish between day-to-day business and the OKR operating mode.

Why? This is because the logic of running the business (day-to-day) and changing the business (strategy work) is different! In the first case, it is clear what needs to be done. Cause and effect relationships are known and there are established routines and processes to be followed (implementation mode).

OKR, on the other hand, is the mode of operation appropriate for complex strategic challenges, where the cause and effect relationships are blurred and a trial-and-error approach is part of the game. Teams involved need to switch from their implementation mode into a discovery mode. Therefore, we believe that teams need a protective space for their work on OKR, with the right workload combination of key results and other activities in order to stay focused.

Myth # 2: The right objectives only have a success rate of 60 to 70 percent

This rather confusing statement originates from a Google video, aiming to convey the approach of  “goal stretching”. This is based on the hypothesis of “overstretching” goals and making them unattainable (so-called “moonshots”), thus pushing employees to think outside of their usual framework. In principle, “goal-stretching” is feasible, however, it is unreasonable to believe that employees can easily switch to this mode.

The “goal stretching” approach requires an established learning culture (instead of the often prevailing error culture), innovative strength and management skills, as well as sufficient free resources in the company. From our experience so far, organizations rarely fulfill these prerequisites immediately.

Depending on the maturity of the teams and the company, it is not advisable to start with objectives that are almost impossible to achieve in the initial phase of OKR. It is absolutely fine if objectives are 100 percent achievable, as long as the responsible team agrees.

On the other hand, we would like to state clearly that in the strategic mode, achieving less than 100 percent of a target does not necessarily mean a failure. Apart from achieving objectives, the most important factor is always the key learning of the previous three months. This is the basis on which the subsequent agreement is made, in terms of what to keep, discontinue or adapt in the next cycle.

Myth #3: OKRs need to start at the individual level, or at least have to be broken down to that level

This myth is often kept alive by OKR software providers. Some people believe that there may be business interests involved regarding the sale of software licenses. OKRs can be applied at the individual level, in which case the approach helps the individuals organize their own work. This can be beneficial, but the added value for the entire organization is limited.

OKR is nourished by team spirit, the energy of co-creation and team successes. The smallest critical unit in strategy implementation is always a team in the OKR operating system.

As mentioned at the beginning, OKR operates in the discovery mode and not in the implementation mode. We cannot escape the latter; the daily company routines (“the urgent”) do not give employees much leeway. The discovery mode (“the important thing”), on the other hand, is more demanding and can easily be neglected because of day-to-day business. Because of this, the group’s motivation, engagement and creative potential are all the more important.

Myth # 4: Objectives are stipulated by the management, the key results are to be invented by the staff

Following classic hierarchical thinking, the management team develops the objectives and afterwards expects the teams to find adequate key results. However, this does not work in the above mentioned discovery mode and inevitably leads to demotivation and lower performance among employees.

Objectives and key results go hand in hand. They can only be developed, executed and subsequently evaluated by a self-responsible team. However, such high degree of autonomy on a team level needs some guardrails. Therefore, transparency across all hierarchical levels, as well as a horizontal and vertical alignment should take place before the next cycle begins.

Therefore, the principle of  ”loose coupling” should always apply, instead of  ”strict cascading”.

Myth # 5: OKR pays for itself after the first cycle

“OKR is a method that you just have to “teach” your employees properly… read a few books and then it’ll work!”

The truth is, however, that OKR is an opportunity that requires not only the art of leadership to formulate the right objectives, but also focus, consistency in implementation and a corresponding mindset in the organization. As a result, it is not primarily about knowledge, but about ability – and ability does not necessarily come from knowledge.

Ability is only acquired through trial and error, repetition, making mistakes and a continuous improvement process – ideally with the support of an OKR Master or a consultant.

From our point of view, even with good support, it usually takes three to four cycles before companies are ready to really benefit from OKR. However, if the introduction of OKR is really thorough and systematic, an organization can develop enormous energy for change within a very short time.