OKRs Don’t Measure Human Performance

OKRs are a fantastic method of measuring business performance. But blindly applying them to measure human performance is a significant mistake.

First, some background:

What are OKRs?

OKRs are objectives paired with key results. First, we identify what we are going to do (our objective).Maybe our goal is to grow sales, or grow clients. Then, we specify how we are going to measure that growth (our key result). To do this, we must identify where we are now as a baseline, and what our target is.

A quick history of OKR success: OKRs started in the 50s with Peter Drucker and MBOs (managing by objectives). In the 70s Andy Grove used OKRs to propel Intel to remarkable growth and market leadership. In the late 90s John Doerr took OKRs to Google, and Google continues to use OKRs to drive growth.

Why do they work so well to drive growth?

Reason 1: Focus

When used correctly, companies have only a few top OKRs. These top OKRs are used for two things:

1. Determining what business goals to focus on to drive growth

2. Identifying work to stop that doesn’t drive the to the key result – even if the work seems valuable

For those of us in tech – we have seen this before. Imagine you have been working on a significant release, and there are code bugs to solve. You can exhaust thousands of hours solving bugs. OR, when you have a clear rule about what bug must be solved first, you can immediately identify repairs to focus on and others to ignore. (For example, when I worked with Walgreens, the top category of bugs was equivalent to, “There is a risk someone can die if we don’t solve this.”)

Stopping unnecessary work clears resources to focus on and accelerate key work that will make the most impact.

Nearly 10 years ago, I was with McDonald’s during the ‘year of the drive-thru’, and the rule of thumb was – if your project didn’t improve drive-thru business, it didn’t make the cut. Brilliant projects that you see in production now (kiosks for ordering and digital menu boards inside restaurants) were paused to put resources on drive-thru, which ultimately supported ~70% of McDonald’s US sales in normal times, and later, upwards of 90% during the pandemic’s peaks.

The bottom line – using the objective and key result to say ‘no’ is as important as using it to say ‘yes’.

Reason 2: Constant Measurement

OKRs create an expectation of constant experimentation and constant measurement. The best OKR structures I have seen are set quarterly, measured monthly, and transparently shared with the full organization. These frameworks show what is working, and what isn’t.

In my organization, we use transitional roadmaps. These roadmaps group product feature candidates that are prioritized and link to OKRs. These are features we THINK will drive the business metrics. We complete discovery (research that indicates the feature will succeed) and then complete testing (rapid Agile development on a small scale to see if the discovery holds true and we gain a measurable edge).

This means we fail quickly, and we succeed quickly – constantly determining within the Agile framework what development work to prioritize based on those results.

Both Focus and Measurement make OKRs exceptional for driving growth. They are not exceptional for measuring human performance.

Why you can’t use OKRs to measure people

There are at least 3 key reasons OKR fail to measure people and their performance well.

Problem 1: OKRs are company based, not team

Go back to the last section – did you catch ‘we fail quickly’? Not all the feature candidates are successful. Some teams build features that have a large impact on the Key Result, and others build features that have a lesser or no impact when their test fails.

If you use OKRs at an individual level to determine bonus, ratings, promotions – only the individuals on teams with top features in production will be promoted. Crazy ideas and fringe experiments have a higher rate of failure, yet as an organization we need those crazy ideas and those fringe experiments to uncover innovation. A hybrid ecosystem of features promoted to production and failed experiments is needed, otherwise we reward cautious, conservative ideas and miss the best chances to grow.

The holistic ecosystem itself (of tests that fail and others that succeed) and the overall outcome has to be rewarded.

Problem 2: There is necessary non-OKR work inside of companies

“Wait,” you say, “Isn’t the strategy that we only do work that ties to OKRs and we set other work aside?”

The secret is that there are critical, foundational things happening in companies that don’t tie to business growth strategy - bringing in talent, building leadership, closing the quarter, modernizing tech platforms, and so on. These bodies of work are about business strength, not growth. They are hard to measure (though some can be measured), and the resources we put toward them versus growth is a separate conversation. We could waste a lot of time trying to force these goals into OKRs, but I don’t believe that administrative overhead drives value.

Problem 3: Human talent development is an art form

All we see in research about human engagement from groups like Gallup is that the worst way to develop talent is to treat our talented people the same. Innate strengths, areas of individual curiosity, driving motivators – these are unique and when understood and optimized will drive exceptional outcomes from our people.

To translate this – if I am a great manager and developer of talent, I should be able to tell you a specific strength of each of my team members, what I am doing to help them build on it, and what I expect the value to the company to be.

You can be exceptional as a people manager or a contributor, ultimately driving material value for the company. It’s possible this management work doesn’t directly show up in an OKR (though it likely shows up in your development goals).

The solution:

Success comes from having 3 categories that make up our performance discussions, including compensation and promotion decisions:

OKRs – clear, few, transparent, measured often. When successful, they drive transparency, strong decision making and priority – and most importantly, results. These are usually broken down into nested Product OKRs that both support the top organizational OKRs, and serve to track all proposed engineering work / feature candidates in the Product & Engineering organization. Building Product OKRs and watching their results gives us stories and examples about employees that we can bring into talent roundtables. We can learn as much from how successfully someone deploys a key feature as we can from when someone stops a failed experiment, leads innovation brainstorming, and assesses the cost and value of features to prioritize them.

Reward structure for OKRs: Company bonus for all based on total performance.

Business goals – separate, these are usually set at a division level, and are confirmed by leaders as priority for business stability (modernizing platforms, improving retention, creating talent pipelines, maintaining security and so on). These are set by owners, and not necessarily transparent to all in the company.

Reward structure for Business Goals: Division / team or individual reward for owners of the work.

Human goals – separate, individualized. Aggressively personalized, these are the things we know drive engagement, excellence, innovation, and ultimately strong profits.

Reward structure for personal or human goals: Set individually, these clearly identify and build the case for promotion and opportunity.

This work we do is beautiful, challenging, and complex.

The structure for performance management needs to measure it all.

Want Progress? Measure.

If you don’t measure your impact, you don’t really know if you are having one.

You may have a sense that your efforts are driving changes, but you only know you’re making progress if you have a baseline and quantitative measurement of your improvement.

Corey Flournoy, VP of Diversity at Aurora, advocates that June be Black Progress Month. It’s a great challenge to check ourselves:

Are we implementing a well-considered action plan to hire and retain diverse staff and measuring our progress?

To improve our talent pipeline, we built diversity OKRs comprised of Objectives (goals) and Key Results (quantitative measures of outcomes). One of the OKRs requires each leader in Product and Engineering to have a certain number of informal networking conversations with both external and internal diverse talents. Interviews don’t count; the goal is to take some of the load off our Talent Acquisition team by nurturing connections before job opportunities arise.

A peer asked:

“Christine, how do I reach out to people without being creepy or transactional?”

It’s a great question.

• First – make it a habit to connect with people you used to work with every year or so. They may ‘boomerang” back to you, or at least give you perspective and potential connections outside of your organization. Every conversation needs to include the question “What can I do for you?” Perhaps they need the name of the Agile coach you used in the past, a recommendation for an Intellectual Property firm, or a phone number from an old contact. It’s only an email / virtual coffee / after work beer. The connection may be brief, but it’s important to find a way to be of service. A woman recently came back to work for me and is making a big impact for the company. We had coffee once a year, and I helped her with a few challenges in her other positions in the years between.

• Second - pay attention to new hires in your org, and reach out. I heard a recent grad who had just started at our company mention she was new to Chicago. I reached out, and we chatted. She was isolated in an unfamiliar city, so I connected her with four folks on my team who live in her area, and suggested they share favorite food deliver sources or see if they could connect for walks. As we chatted that first time, she mentioned she led a diversity organization at her college. When we had new job openings, she was my first call and her network gave us two terrific, smart folks who start in a few weeks.

• Third - mentor and volunteer. There are many organizations looking for volunteers to speak, coach, and support. Through these opportunities you can be of service while amassing insight about talent in your geographical area.

So, let’s talk about our measurement of our progress. In my team alone, the measured impact on diversity has been great (our last seven hires have come from connections like these), and ALSO we’ve lowered our talent acquisition costs, expect to see higher engagement because of connections we share, which ultimately leads to discretionary effort, high performance, and retention.

This is why we measure informal coffees in our diverse networks: they make a material impact on our talent pipeline.

When we reach out to people we know or are connected to, it’s not creepy.

When we ask, “What can I do for you?” and do it, it’s not transactional.

When we measure our outcomes, we stay accountable to our goals.

So yes, Corey.  Let’s go for progress, and let’s measure and celebrate it.

Efficiency & Toads

Unintended consequences – outcomes not foreseen.

I knew I wanted to be a parent; I didn’t realize how it could help my career.

In the Harvey Nash / ARA 2018 Women In Technology survey, the survey team shared one of my comments in the section about having a family and a career in tech: “Every minute is valuable, and my ability to distill the most critical things to complete has sharpened with each year as my personal responsibilities expanded.”

Years ago, I asked my father if he was always ambitious. He replied cheerfully: “I got more ambitious with each one of you.” Punch line: there were seven of us, and yes, he was one of the hardest working men I knew. In his case, he worked hard, and long.

I had the benefit of technology, and being in technology. I worked aggressively smart (and long - but also remotely and at flex hours). The skill I developed most was vigilant prioritization.  Nothing motivated me to figure out the fastest way to solve a problem than a car-line pickup deadline at school. Nothing motivated me more to structure meetings efficiently than needing every minute of my face time in the office. I didn’t linger over nonessential messages, articles, distractions.

The payoff was 4 little ones at the kitchen table doing homework while we made dinner and talked about toads, great books, science experiments, lost gloves etc. I was all-in in the office, and I was all-in in the kitchen cooking, and on the couch reading books, and on the floor working puzzles. 

To be completely honest, I was not all-in to my fitness, to keeping up with friends, with finishing the books for book club, with keeping the house clean, and heavens knows what else.

But EVERY day I flexed my decision-making muscle about where to invest my time, and how. It made me better, it made my projects successful, and I learned a lot about toads.

Abandoning Your Work: The Key to Unconventional and Effective Strategic Planning

If you want to innovate, drive profits, and keep your staff engaged, you have to dispense with traditional strategic planning.

While leading IT strategy years ago, I used one of the most sophisticated modeling tools. The team built out roadmaps by capability/category, tied in our resource plan to forecast length of stages, created a capital plan and depreciation, and delivered timelines. It was comprehensive, the outputs were colorful, clear, complex, visually compelling and beautiful.

Changing a project in the model was this side of hell.

So, we didn’t update the models. Teams were socialized to complete things they were working on, even if the projects were bad ideas. Instead of discussing changes to make projects stronger, smaller, different, teams would either quietly insert scope changes or proceed on the original path.

Leadership wanted to know why there was no innovation.

As I lead teams in strategic design, we deliberately design our strategic planning to allow us to abandon ideas.

About 90% of our crazy innovative ideas that go through a rapid proof of concept are happily dropped as we find something better, something different, or realize the business need has changed. About 10% of our crazy ideas become projects.

Nearly 60% of the projects on our current year road map change in some way – they are accelerated forward, moved out, or deliberately replaced with more impactful projects.

We do not invest in extensive analysis or planning of our projects until they reach the inception stage. If you think about it, if we spend time doing a deep cost and value analysis on all our early stage ideas, we will end up discarding more than half our analysis.

Instead, we redirect our smart people to doing challenging work.

Key to our model:

Tiered roadmaps. These roadmaps have different criteria for each stage; our goal is to be good, not perfect, seeking just enough information to make decisions that are appropriate for each level.

• 2 and 3 year vision These efforts have placeholders by year, simple aspirational titles, and are supported directly by business partner, or by CTO if the work is technology replatform)

• 1 year potential  These efforts have placeholders by quarter, reviews starting with architects and business partners using discussion documents, and placeholders for capital funding)

• Current year active   These projects have early design, charters, committed dates and resources and show timeline by month.

Discussion Documents – These one-page documents are used to guide conversations with leaders and impacted teams about the early stages of ideas or projects. They have: Enough information to have a good conversation with IT leadership about the possible project, Space for someone to take notes, Focus on options or decisions that need to be made, and / or reasons for doing. This is a precursor to charter, design reviews, and funding approval. As a result, no hours are invested in calculating costs for something that may be adjusted, abandoned or delayed. IT Leadership can then…suggest adjustments in direction (before all the charter work is completed, and would have to be redone), suggest others to involve in the early discussion (like another impacted business team, or Cybersecurity), become familiar with the project and offer support early in the process.

Program Leads Program Leads co-own roadmaps with business partners and use the consistent guidelines above to organize plans. They take planning a step deeper, and use release plans to organize Agile epics into releases, or project plans to build stages of work.

Lean, but frequent reviews. Roadmap priority meetings happen every three months with all leads. These are casual, supportive meetings over lunch with a review of each plan. Subtle adjustments are made to active projects, managers of teams can discuss resource contention or changing priorities, and bring challenges forward for advice. Senior leadership can give early indications of shifting need and support from Executive leadership based on their discussions. In addition, teams briefly review resourcing changes across projects monthly.

This process took three months to stand up the initial structure (coaching teams one-on-one to develop baseline roadmaps) and another twelve months of quarterly reviews to establish efficient patterns and cadence. Early on, review meetings were longer, and they have become shorter and more efficient over time.

Quick math says we have saved at least a person-month of time each year for our program and leadership teams, which we have redirected to ‘running the experiment’ to test out new ideas. 

We are stronger, our projects more impactful, and our folks get to work on intellectually stimulating technology.

Planning to abandon work in flight and take on new work instead is key to our impact.

Let the Plants Die

“Oh crap, I’m watering the plants,” was how Emily (a young mentee of mine) started our call the other day. She had been listening to Women at Work (a great podcast out of the Harvard Business Review).

The particular podcast was about women and people of color being assigned or volunteering for ‘non-promotable’ work – taking notes, watering office plants, ordering lunch.

And she realized….Oh crap, she was watering the plants.

As she listened to the podcast, she recognized though she was a peer in terms of education and contribution to her team, over time there was an assumption of tasks she would take on. (She was the youngest, and a woman). Her desk was by the door, so people assumed she should receive and send packages, welcome visitors – but mostly, everyone assumed she would water the plants.

This, combined with her lack of progress to more complicated work demoralized her. She talked (maybe ranted a bit) and I listened.

I said, “Emily, you have to let the plants die.” She laughed, and we talked seriously about how to start to turn the tide. We talked about a solution that included two things in a statement – a gentle ‘no’ or delay, and a reinforcement of her work.

• If someone asked her to mail a package, she could reply, “I should have some time tomorrow, I need to get this analysis done for the Board.”

• If someone asked her to plan the happy hour, she could reply, “I really wish I could, but I have a meeting with the team to solve the crisis from Tuesday.”

• If asked why the plants were dying, she could reply, “Oh gosh, feel free to water them, I’ve been heads down on the new interface work.”

With each interaction, she keeps her professional relationships strong, and starts to build a new narrative: she is too busy with critical project work to do non-essential tasks. It’s a way to reinforce who she is on the team – a bright person trusted with executive communications, crisis management, and key emerging work.

She was recently promoted, and yes, plants were harmed in the process.

Resolutions & Agile Delivery

New Year’s resolutions and Agile Delivery have a lot in common, and February is a good time to talk about the similarities. According to US News, 80% of resolutions fail by the second week of February.

When you make a resolution, your optimism about positive change is strong.

Much like a resolution identifies change that is needed and aspirational, Waterfall to Agile transformation holds great promise for organizations as well because of the:

• ability to frequently validate with our business that we are on track

• autonomy we grant teams as they alone set work pace and approach

• clarity that user stories bring

The little-discussed secret of successful transformations is that they involve really smart people….who need to change. And, as US News notes, the deck is stacked against success, with most aspirational changes(resolutions) failing.

When I wrote this blog, our organization was in our 3rd year of Agile transformation, and making progress reinforcing change. These are ways we held on to our Agile resolutions:

1. Strengths clarity. Much as we assess our team on where their strengths lie and how to amplify those strengths, we do the same with Agile teams. We observe ceremonies and work, and define a different plan and goals for each team. More mature teams focus on refining prioritization of work, or expanding their capacity. Less mature teams focus on the consistent execution of scrum ceremonies, or a focused effort to swarm a challenge point like testing or writing stories.

2. Innovation | Autonomy. Just like a stand-up meeting has democratic participation from each member of the team, we have a lovingly titled Scrum Masters Support Group where teams bring best practices and problems to each other. This group has solved roadmap planning by leveraging an add on tool to Jira that one team discovered on their own. The issue of releases spanning multiple sprints was solved by another team. Retrospectives were made more effective with a public domain tool.

3. Let the Rabbits Run. We work hard to figure out ways to let people move fast, and stay out of their way. We still have accountability to executive leadership in how we track budgets, commitments to business, and expected deliveries. But we have adapted financial tracking, charters, architecture approval and cyber security review to better fit Agile and not be a barrier. Charters identify the iron triangle (whether scope, cost or time is primary criteria), epics that define work by priority, and the project vision. Architecture review is done in stages, and cyber review is embedded instead of front loaded to the projects.

4. Performance Coaching. Much like a resolution for fitness is more likely to succeed when a person has a coach, we adjust PMO strategy each year to offer personalized support to teams. Whether it is observation and feedback to ceremonies, the ongoing support group lunch and happy hours, or best practice review to solve issues, we coach one-on-one and sometimes in groups. We share a Scrum reference guide and create our own tools to enable scrum teams to execute their own health checks of processes.

Agile is revealing. A slacker team member has nowhere to hide in a daily stand-up. A product owner has to have a spine and make tough decisions about priority. A scrum master must find their peaceful inner self and have the health and consistency of team process as their most important focus.

When you give your teams thoughtful support, Agile also reveals powerful collaboration, results, team spirit and joy in delivery. And aspirational resolutions become reality.

Radical Delegation

Everyone delegates. My company is in the middle of consolidating two technical organizations while reporting to a third organization. Every week I look over my normal steady-state workload that I can define, describe and have someone on my team take over. This delegation frees me to focus on the ‘un-steady state’ of technology and people in our merger.

Radical Delegation is different than delegation. It feels different, looks different.

Radical Delegation drives innovation.

When I worked at VW/Audi my focus was on our financial IT data centers in the US; I was also part of the National Diversity Council and was exposed to VW’s cultural expectations around work and decision-making. Many of these had their roots in the German education and work systems.

During this time at VW/Audi, US business growth was fueled by the new Beetle and Audi TT Coupe – both design disrupters in a time of look-alike cars. These were designed by two Americans (J Mays and Freeman Thomas) out of the Simi Valley based VW of America design center.

In hindsight – I can see why the new Beetle and TT Coupe came out of a somewhat disconnected work center.

“What is your one tip on transformational leadership?” was asked of me in a panel discussion. ‘Radical Delegation’ was my answer. Delegation is defined as entrusting a task to another (usually less senior); I used ‘Radical Delegation’ to reinforce the separation, and trust needed for innovation.

When a leader deliberately, fully hands a challenge or task off, it is an unnerving leap of faith in our teams and takes leadership courage - we remove innovation barriers. Oversight creates caution. Review creates adjustment to meet expressed or perceived expectations.

An unfettered team may be joyous or terrified, but they are going to think unlike us. Unlike what got us here. And that is exactly what innovation is.

Effectiveness & Cookies

If you have worked with me, you likely have had these cookies. As I bake them for my team on a snowy Sunday, it’s striking how the origin of these remind me of work we’ve done to mature our Agile development practices and to develop our staff. Much as Agile Scrum is centered on ‘inspect and adjust’ -- these cookies came from years of trying adaptations out. They are the same recipe on the back of the Nestle package with 3 small tweaks that make them stay soft and terrific for days.

We just completed an Agile refresher, and as we did deep dives with teams who have been delivering in Scrum for a long time – we found small, unique tweaks that each is going to try in the next months – I am certain we will increase our Scrum velocity as a result.

My favorite recipe for talent development is similar – quarterly objectives instead of annual goals. The opportunity for transparency around an individual’s strengths and potential is huge when we set measurable targets that are only 30 – 90 days out. As critically, it gives us the chance to change direction if the business needs something different or new since we last set priorities.

More to come as we inspect and adapt. Wishing all a productive week ahead.