Leadership, alignment and why OKRs work
Many companies have fallen into the trap of implementing Agile practices, but without understanding the reasons and philosophy behind agile. Like the islanders in their a bamboo towers donning coconut headphones, hoping for bountiful planes to land again, software teams are told to do sprints and standups and retros, often leading to measurable improvements in outputs, but seldom in better outcomes.
Similar to Agile, the Objectives and Key Results (OKRs) management framework has taken over much of the tech world since Intel’s John Doerr introduced it to Google, and several advanced tools now exist to help companies implement OKRs.
But it wasn’t until I read a 30-year-old article that I really understood what makes it work.
In What Leaders Really Do, first published in the Harvard Business Review in 1990, John Kotter lays out a clear, simple framework for understanding the difference between management and leadership:
Management is about coping with complexity; leadership is about coping with change.
Management is planning, budgeting, staffing, organizing and problem solving; leadership is establishing a direction, aligning people in that direction and inspiring them to move there. Successful organisations must have both.
OKRS are a tool for aligning people and, critically, alignment goes along with empowerment. This works in at least two ways: first, when there’s a clear vision that everyone understands, employees who take initiative have some protection against the kind of managers whose first instinct is to keep everyone marching in lockstep. Second, the vision provides an external standard that can be used to resolve conflicts and logjams.
When done right, high-level OKRs articulate a clear vision that can align an entire organisation and get everyone headed in the same direction. When every team develops, owns and reports on its own OKRs, you get the kind of empowerment that supplies the energy and initiative to get things done.
As Head of Product at Qantas Insurance, my teams doubled Health Insurance sales and more than doubled our monthly active users on the Wellbeing app – and I credit OKRs with that success. Not just because it provided clear goals for the teams, but because the teams had to set the OKRs themselves. I asked my Product Managers to create OKRs not just for their own domains, but for every strategic pillar of the overarching business strategy.
For example, the “Sales and Service” team had to create OKRs for Culture, and the Wellbeing team had to create OKRs for Growth. One of the Culture OKRs in the Sales & Service team involved a fortnightly ‘lunch & learn’ session, where new team members were asked to give a presentation on work they did prior to joining. One of these presentations was given by an expert on Accessibility, which inspired the team to pitch an initiative to the leadership team to make our website dramatically easier to use for people with disabilities.
None of this is easy, though; doing OKRs right is hard work. When product & engineering teams are used to measuring their success and being rewarded based on their outputs, they can easily lose touch with the organisation’s broader goals. If you launched seven new features last quarter but nobody’s actually using them… well, that’s somebody else’s problem (probably sales or marketing). You just focus on what you can control, which is delivering the next set of new features – this works for a while, but sooner or later you simply have a ‘feature factory’ delivering high output, but little value.
When you’re seeing through the lens of well-designed OKRs, on the other hand, you’re no longer just building apps and features – you’re responsible for delighting a customer. That brings a whole new energy and focus to every day’s work.
As well as keeping individual teams aligned around a common vision, using OKRs can also shift communication and collaboration between teams across the organisation . They provide a common language and a common reference point, so it’s harder to shift responsibility to someone else and easier to talk about how to get things done together.
Transitioning to OKRs involves some hard thinking: exactly how does our daily activity contribute towards achieving our overall objective? Do we even have ways of measuring that, or do we need to invent a new set of metrics? But if you do them right, OKRs have immense power to take your organisation further and faster than you ever dreamed possible.
