Why OKRs Fail

It’s no secret that Objectives and Key Results aren’t for everyone. They’re ideal for businesses with a goal-orientated, innovative culture of high ambition and high-performance. Great for those looking to grow a business faster and maintain strong consistent communication amongst distributed teams as they do so. However, that’s not every business out there.

In his book, Measure What Matters, John Doerr states “OKRs are a shared language for execution. They clarify expectations: What do we need to get done (and fast), and who’s working on it? They keep employees aligned, vertically and horizontally.” However, there are some reasons as to why OKRs may fail within an organisation and not achieve the anticipated success that’s expected.

To help you avoid making mistakes and ultimately assess whether OKRs are right for you and your business, we’ve highlighted 8 reasons why OKRs may sometimes fail:

1. Not having a ‘champion’ that’s committed to change

We see this a lot with change in general, but more often when businesses try to implement any kind of performance management system. You’re going to have to have a champion for this change. Usually, this is an ambitious CEO, who generates a real commitment to change amongst the Senior Leadership Team to support the change, especially when it comes to rolling out OKRs amongst the wider business. For more information on positive change read our blog: How to drive positive change in your business

2. Not setting them correctly

Objectives are the ‘what’ you want to achieve and the Key Results are the ‘how’ you are going to achieve them. Key Results need to be measurable in order to know if you have successfully achieved them. OKRs themselves must be significant, absolutely crystal clear, action-orientated and inspirational, including some stretch goals to push teams forward. If they are not set correctly matching these characteristics, you could be setting yourself up for failure.

3. Too much too soon

A bit like running, when you initially plan out your OKRs, don’t overdo it. When you begin to run, start slow and short. With an OKR system, set the company objectives at the CEO level and then get the Senior Leadership Team on board first with their Objectives and Key Results. Once that is cemented, and they are tracking progress, roll out to the senior management team, then other managers, followed by front line team members, etc, to really ensure OKRs are cascaded effectively throughout the business. Check out our blog on how to cascade your company vision effectively

4. Not having the Vision

It’s vital that you have a crystal clear idea of ‘why’ you want to implement OKRs within your business. We call this the overall Vision. This is the inspirational piece, it’s everything you and the company aspire to be and forms the basis of all other decisions, in terms of where to focus and direct team efforts. Our 1-3-5® OKR system starts with setting the Vision for the business. It’s not good enough to just have some objectives and key results if you aren’t clear of exactly why you want them or they aren’t linked to the bigger picture.

5. Setting and forgetting

Some companies simply set and forget their core values and objectives, leaving them stored on a (digital) shelf to gather dust. Once they’re set, they think ‘great, that’s done,’ and they move on. The same can, of course, happen with OKRs if implemented very loosely at an individual level without full company buy-in. However, success requires the CEO to set OKRs and then cascade these throughout all teams within the business as part of the goal-setting culture and as a means to track progress and achieve ambitious goals. This avoids OKRs becoming a ‘set and forget’ exercise. They need to remain front of mind, day to day and week to week. Make them part of your 121’s and performance reviews. Imagine a culture where your team asks for a 121

6. Teams are overloaded

Launching an OKR system in your business takes effort and focus. If you’ve just launched some other initiatives with your team, for example, a new operating system or a brand new CRM system, it may overload the team to introduce OKRs on top of that. In this case, it might be better to let those other initiatives bed in first. Furthermore, OKRs must be clearly defined, achievable (occasionally with stretch) and constantly reviewed. OKRs can fail because businesses try to set too many and in doing so, overwhelm their teams. That’s why our 1-3-5® performance system limits the number of objectives to just three and then allows the focus to move on to the goals (or key results) required to achieve them.

7. Wanting immediate results

Some businesses think they’ll get immediate results the minute they implement OKRs. Whilst we agree they can be transformational and should become part of your business DNA, it does take time. If you expect immediate results and then get impatient, it won’t work.

8. Thinking they will solve everything

OKRs are great but they won’t solve everything. They are not a solution to other underlying issues in your business. If you are facing any cultural challenges, or you don’t have a clear Vision, OKRs may not work best at this time and you should aim to resolve the other issues first.

Conclusion

I hope we have enlightened you as to some potential reasons why OKRs may fail within an organisation. We’ve seen instances where a business has a very loose culture where there’s never been any real talk about goals, KPIs or targets in the past. Then one day the CEO decides to launch OKRs and it doesn’t work. As previously mentioned, they are not for everyone and every business. There needs to be a fit and a real desire to change internal processes to make them work as they should and when they do, the results are astounding!

OKRs should become part of everyday life within an organisation and set the direction and focus for all teams to achieve the overall business vision. They provide the perfect platform to facilitate 121 meetings and annual reviews, making it clear where someone is up to in terms of performance to targets and overall workload. However, we recognise it can present a learning curve when implementing OKRs company-wide. At Reclaro, we offer bespoke coaching with all our new customers and their teams to cover the 1-3-5® OKR methodology in detail and offer support during onboarding and beyond. Once companies implement OKRs in their business one thing’s for sure, they never look back and say ‘I wish we hadn’t done this’ simply because, like running, you never regret it once you’ve done it, as long as it’s the right exercise for you. You never regret doing something that moves you closer to achieving your goals. Are you learning to achieve your goals?

Posted by Pete Wilkinson

Last updated: 26 March 2021

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