All posts by Vikram Kohli

7 Steps to achieve success in OKR Implementation

OKR is a management tool to drive execution on your annual operating plan and strategic priorities.  This goal-setting framework is different from the tradition KRA/KPI goals in a way that the starting point of OKR is your CEO/Company goals, not Job Descriptions and Roles.

Photo by Štefan Štefančík on Unsplash

While in theory, the OKR framework looks good, but many companies fail to implement the OKR successfully. Here I am sharing the 7 steps we believe and have seen are critical for successful implementation:

  1. Be brutally honest about why you want to implement OKR?   Is it only because Google or Intel has implemented it? Or is it because your existing business KPI’s are sitting in silos and/or your annual goal-setting exercise is a checklist activity and doesn’t add any value to company growth and setting accountability at work?
  2. Create a core leadership team for implementation. This team should consist of 3 members  (1) CEO (2) Strategy Head/Corporate Planning Head/COO/Marketing Head (3) HR Head. This team should be the one who has the horizontal understanding of your business and company.  And this is the team who will drive and manage the change of implementing OKR across the company.
  3. Get your CXO’s and managers OKR ready: Getting ready for OKR means imparting the training to managers and business heads about what is OKR, how it’s different from traditional KRA/KPI’s, and how it will help the company achieve required focus, alignment and accelerated execution. The primary focus of this training should be to enable the manager to come up with their own OKR’s . Don’t try to push the OKR’s from the top. You should just be supplying the guiding force and contours under which OKR should be created.
  4.  Set the OKR cycle:  The guiding literature around the internet suggest and promote quarterly OKR’s. Which should be the case if your company is disciplined and ready to put the effort at the start of every quarter to create OKR’s. But to start with, we at qilo recommend the 6-month cycle approach. For the first time, set OKR’s for the next 6 months, observer the adoption, quality of OKR and then reduce the cycle frequency to quaterly.
  5.  Set OKR format and timeliness to share the OKR’s : Even if you involve your company in the entire process, people still will forget to share their OKR’s internally. A good format is simple yet powerful in a way that to forces people to make a write inspirational Objectives and quantifiable Key Results. Pro tip: Setting a quantifiable Key result is the key to successful implementation. Your training should help your managers and employee to put in more quantifiable key results that push people to go beyond what they can achieve at ease.
  6.  Communicate the review frequency up-front: This again depends and directly linked with the  OKR cycle.  If your OKR cycle is quarterly, close the cycle with OKR review and probably in the same review, ask the manager and employee to come up with their next quarter OKR’s.
  7. Answer what’s in for me from an employee perspective:  At employee end, what works is (a) greed- the greed of going to the next level and earning more money (b) to bring meaning to their work. As a company when you implement OKR, it can help you to achieve both.

Implementing OKR by taking it as the guiding principle. And the beautiful thing about OKR is it much more meaningful for company, managers, and employees, help you to bring accountability at work and accelerate execution. But remember, what works for other companies might not work for you. You can and should always customize it based on your requirement.

Read this post to check why OKR implementation fails

Goal Setting gone wrong

In most of the companies, goal-setting is done to either achieve one or all three perspectives mentioned below.

  1. To achieve the annual sales targets.
  2. To achieve the annual operational plan and strategic priorities.
  3. To fulfil the annual checklist activity of performance management.

Ever wondered why all 3 works in silos and doesn’t connect with the big picture? Almost all the companies do the exercise of annual sales target setting but do the half cooked job for setting goals to achieve the annual operational plan and strategic priorities. If done right, goal-setting helps you to accelerate growth, bring alignment and accountability across the organization.

If your goal are not the guiding force of your day to day work, they are not the goals, but just a formality.

There are various goal-setting frameworks that a company can opt to drive their sales, operations and strategic plan. 3 of the major goal setting frameworks that are widely used are:

  1. Hoshin Kanri
  2. Balanced Score Card
  3. OKR

Hoshin Kanri

Hoshin Kanri (also called Policy Deployment) is a method for ensuring that the strategic goals of a company drive progress and action at every level within that company. This eliminates the waste that comes from inconsistent direction and poor communication. Hoshin Kanri strives to get every employee pulling in the same direction at the same time.

It achieves this by aligning the goals of the company (Strategy) with the plans of middle management (Tactics) and the work performed by all employees (Operations). The 4 steps for Hoshin Kanri are:

Hoshin Kanri Step 1: Clarify your current state and identify Mission, Vision, and Behaviours

Your company’s Vision and Mission statements are a good place to start if they have been well written and are still relevant. Answer these questions to help you identify your vision, mission, and behaviors

Mission: Why do we exist as a company? or How is the world a better place because of us?

Vision: Where do we want to be in the future (5-15-30 years)

Behaviors: What are the behaviors that you and your employees should be living by on daily basis to achieve your mission. These behaviors are different from the values which live on your website.

Hoshin Kanri Step 2: Define Breakthrough Objectives (Hoshins)

The breakthrough objectives are mission-critical objectives. These objectives may take 3-5 years to fully accomplish.A few good questions to ask your team to get to these Breakthrough Objectives are:

Q1. In 3 years from now, if we look back on what we have accomplished from now till then, what is the biggest, most significant accomplishment we could achieve?

Q2. What is the single most important objective we need to accomplish to remain competitive 3-5 years from now.

Hoshin Kanri Step 3:  Define Annual Objectives (Goals & Metrics)

Breakthrough Objectives should then be broken down into Annual Objectives. These annual objectives are the basis for your departmental and even individual annual strategic plans.

Hoshin Kanri Step 4: Deploy Annual Objectives through the organization (Catch-ball)

Cascading your goals is a powerful and important part of Hoshin Planning. Each Annual Goal or Objective must be broken down into specific goals and projects for each functional group or team. It is only when each team member has a challenging yet achievable goal that they can see how they contribute to the overall Hoshin Plan.

Balanced Score Card

KPIs traditionally have had a bias by measuring past costs, revenues, and profits but offering little insight into how an organization was likely to perform in the future. Robert Kaplan and David Norton’s balanced scorecard framework, introduced in 1992, revolutionized how businesses connected KPIs to the company’s broader mission. The balanced scorecard, incorporating financial and nonfinancial measures to guide operational and strategic goals achievement.

If you’ve ever seen the Balanced Scorecard in action, you’ll know it’s essentially a strategic framework, divided into four areas (called “perspectives”) that are critical to business success.

OKR(Objective & Key Result)

Objectives and Key Results (OKR) is a management tool that brings in the discipline to achieve excellence in execution aligned with organization and CEO’s priorities. OKR is a goal setting framework originally created by Intel and later adopted by Google in the way back in 1999 when it had had not even celebrated its first birthday. OKR has supported Google’s growth from 40 employees (when it first started using OKR) to more than 60,000 today, proving that it can be used by small organizations as well as large corporations. Today, both technology and non-technology companies are moving fast to leverage OKRs to enable a high-performance work culture.

Here are a few examples of what objectives could be:

1)  Reduce the variable cost in production by 2.5 %.
2)  Increase revenue from product X by 10%.
3)  Become a more effective sales machine.
4)  Move to the new office by December end to provide a happy environment to employees.
5)  Solidify brand and position as market leader.

And following are some example of ‘Key Results’ with respect to above-stated objectives. There can be more than one key result(s) that can define how one will achieve one’s objectives.

1)  Hire a consultant to review and improve the six-sigma process.
2)  Ensure at least 75% of the sales team members achieve their quota.
3)  Hire three sales managers by end of June.
4)  Identify an office that facilitates company and employee growth for 250+ employees.
5)  Hire a new branding agency by end of Q1.

Whatever goal-setting framework you are selecting, expecting it to work out magically and contribute towards your company growth without the involvement of your leadership is naïve. At qilo, we have seen many implementations succeeding when leadership from the CEO to every business gets involved, and many fail when you implement these frameworks just for the sake of implementing it because someone else is also doing it.

 

CEO’s Number One Problem- Accountability in the workplace

When it comes to people specific challenges, what we constantly hear from CEO’s of growing companies is – “People in my company lacks accountability”.  Lack of accountability within individuals and managers is one of the primary reason of inability to scale the company.

Image Credit: Alvin Mahmudov on Unsplash

The term accountability is used interchangeability with responsibility. The main difference between responsibility and accountability is that responsibility can be shared while accountability cannot. Accountability means how well or effectively you carried out what is expected of you.

While there could be many reasons for low accountability, the top 4 reasons why individuals & managers lack accountability are:

  1. Spending far less time in communicating why accountability is important.
  2. Setting accountability before alignment.
  3. Lack of discipline in following rituals to set the accountability.
  4. Not able to link behavior of accountability with rewards.

Spending far less time in communicating why accountability is important

Accountability is what differentiates a good company from a  great company. People are much more career-centric today than before and they want to be the part of success. CEO, functional heads, and managers spend far less time in repeatedly communicating why accountability is important, and how it’s going to impact the company growth and success.

Setting accountability before alignment

If accountability means how well or effectively you carried out what is expected of you, alignment means defining what we should achieve and what we should not achieve as a company. The first step to achieve the highest level of accountability is to start with achieving alignment from top to bottom. The experienced entrepreneurs & CEO’s know why this is important. And spend far more time to get teams aligned on operating plans and strategic priorities.

Lack of discipline in following rituals to set the accountability.

Every company who is serious about growing or maintaining the competitive edge sets some rituals to set and enhance the accountability in teams. The weekly Monday meetings are one of those rituals. Those Monday meetings fail to perform because

a) Agenda of those meeting is too broad (b) those meetings are not data-driven (c) the size of the team is too much such that not all get the opportunity to put in their point or share status or share the challenges they are facing  (d) feedback post these meetings are not captured to measure how well these meetings are performing.

Not able to link behavior of accountability with rewards

The behavior of accountability should be directly linked with monthly, quarterly and yearly rewards and bonus from top to bottom. This should not be the KPI per say to be measured but should be the parameter on which you should enable continuous feedback on. The data point generated from this should help in decision making for rewards.

Summary

  1. Communicate often the importance of accountability
  2. Align before you make people accountable
  3. Set rituals to drive accountability
  4. Reward/Punish people for not being accountable

Building Sports Culture in your Company

India has finally started performing well in sports other than cricket. Indian sportswomen/men performance in CWG , 2018 games was commendable and was one of the best in a decade.  Per my understanding, there are 3 main reasons for this much-awaited success:

  1. Better Coaching.
  2. The discipline of practice with better equipment.
  3. Improved reward & incentives.

Many companies can succeed & executer better on their growth plans if CEO & leadership team can make each individual in the company(or at least 50%) behave and execute like a sportsperson.  Though linking sports directly with business is not fair; as in sports you practice 90% to 95% of the time, and the actual performance is only 5% of the time. In business, you have to perform every day. You don’t have that much time & budgets to practice.

To build sportsmen culture in your people, you have to follow the same 3 principles stated above: “Better Coaching Culture”,” The discipline of execution with better equipment” and “Better Reward & Incentive System”.

Build Better Coaching Culture

Managers are the coaches in a company. A coach is someone who helps in “Understanding the strength and weakness of the coachee”, helps in “Making sure the coachee remains disciplined every day” and “Motivates the coachee whenever she feels down”. In sports, coaches are a former player(might not be the rockstar player of their time), but now has the ability and hunger to make the coachee perform best at the highest level.

To get the managers who are better coaches in your company, 2 critical touchpoints are when you are “hiring a new person as managers” and “promoting individuals to become managers”. When you are hiring the new person as a manager, she should possess all the required coaching competencies. And when you are promoting the individual contributors to the manager role, make sure that you have enough data points on following core competencies a manager should posses

  • Ability to understand the strength and weakness of each report
  • Should have required functional and technical know-how
  • Should have the ability to get execution done with discipline every day
  • Should have the ability to give feedback & coaching on a regular basis
  • And above all, can communicate well in written/verbally

 The Discipline of Execution

I played badminton at my school level and have represented the school at the district level. But failed to perform better because I was not disciplined enough.   When a company performs better than its competitors, its because at every level every person brings disciplined of execution towards the direction set by the CEO/Management.  And the managers play a very important role in bringing this discipline. The managers will be able to bring a better discipline to the team ONLY when there is a high level of alignment within the company forwards business priorities that need to be achieved.

The process starts with CEO’s ability to cut down the complexity and put in company’s strategy and 3 to 4 business priorities/goals very clearly. And communicates this to the entire company. And than HOD’s take those priorities up and work within the functional unit on what, how and who will work on which goals which will impact CEO’s priorities.  Once the managers exactly know what they and their teams need to work on, only then they will be able to bring the discipline of execution in their teams. Currently, the way I see we implement qilo, managers to get hell lot of work done from their team, but lacks the focus on what should be executed.

As a company, you & your managers can get many things executed from your teams. But if they are executed on wrong priorities all this time, it will result in you working for your competitor.

Adopting an efficient goal-setting framework like OKR or Hoshin-Kanri or One-Page Strategy framework can help here.

Better Reward, Recognition and Incentives

Money is a universal motivator. Most companies fail to put in an effective and transparent reward and incentive system in place. And because if this you fail to deliver the message clearly to employees about “What’s in it for me to execute with discipline every day?”.   And more than anyone else, it should be the managers who know your reward and incentive system in and out.

A better reward system should always link the people performance with business performance. It should be data-driven and above all should be able to generate enough data points for better decision making on individual performance. And this data should be communicated to employees/managers on the monthly/quarterly basis. Your reward policy and the process should always reward the end tail of the company on their individual performance, managers should be rewarded for their individual + team performance. And HOD’s should always be rewarded for the company performance.

Building the sportsmen culture in your company is not an easy task. But if you are able to bring this change in your company, you will have a far better competitive advantage.

Summary

  1.  As a coach, your managers should be able to (a) Understanding the strength and weakness of their team members (b) Put discipline of execution within the team every day and (c) should be able to motivate/give feedback to the team members on the continuous basis.
  2. To get the discipline on execution, you manager should clearly be knowing what they are trying to achieve. And how their achievement is linked with bigger picture/CEO priorities
  3. Your reward system should link people performance with business performance.

 

Why OKR Implementation Fails

OKR is a management tool helps you to link business priorities with people. Adoption of OKR in companies as a goal-setting framework is still at a nascent stage. In most companies, the age-old KRA and KPIs are used as a goal-setting framework which is more role-centric than business-centric. While implementing the OKR in many companies, we have learned and picked up few things which results in the failure of OKR implementation:

  1. Force fitting KRA & KPI approach in OKR : For OKRs, the input is CEO/business priorities with respect to cash generation, margin, growth and enhancing customer satisfaction & success. For KRA/KPI’s the input source is the Job Description.
  2. CEO and Department Head not getting involved in the process: Since OKR’s is a business-centric approach of goal-setting, leaving the process to HR to someone else in the company will lead to failure. The process starts with CEO defining the Business Priorities that the company has to achieve in that particular financial year, followed by leadership team owning the accountability among themselves on how those priorities will be achieved. And then subsequently, its given to team below the HOD’s. If the leadership team doesn’t get involved in the OKR implementation, the end result will again be a mere formality.
  3. Company-wide lack of communication why we are implementing OKR. The KRA centric approach of goal-setting is there from last 30 years. When implementing the OKR, you need to invest the time in education your people what OKR is and how its different from the KRA approach of goal-setting.
  4. Delaying implementation of OKR when the new financial year start’s:- When the new financial year start’s, leadership teams put up an Annual Operating Plan(AOP).   The output of AOP is your business priorities. Delaying the implementing of OKR  means the delay in putting AOP in action.
  5. Failing to put Monthly/Quarterly Review Process: Unless the cadence of review from top to bottom is not put in the place, people will not take updating the progress on OKR’s seriously.
  6. Not using OKR performance data in your Rewards/Incentives: Failing to link the OKRs with Rewards/Incentives of the individual employee will fail to answer the question for employees “What’s in it for me to help the company implement OKR successfully “.
  7. Not leveraging a tool to implement OKR: OKR helps you to link business priorities with people and helps you to align the teams and individuals better. Implementing the OKR in excel sheet might suit for the small company with the size of 10 to 15 people, but implementing OKR with employee size of more than 20, will increase your administrative time of managing the OKR’s across teams and individuals.

 

Getting ready for the future of performance, Part -2

In Part 1 of this post, we looked at what should be the purpose of your Performance Management(PM). If the core purpose of PM is beyond annual Performance Measurement, keep reading. If you think that process of performance management can be one of those interventions that can help you to achieve higher levels of productivity and performance at the organization, congratulations you are able to realize the potential of PM. At qilo, we call this new potential of PM as Performance Enablement.

Just think of your organization as a machine, a well define PM process can help you to enhance the accountability on running those parts of machine smoothly and helps you to visualize how those parts are working with each other.

Let’s look at how the 3 core processes involved in traditional PM processes can be reinvented:

  • Re-inventing the Goal Setting
  • Re-inventing Manager / Employee Conversations(1-On-1’s)
  • Re-inventing the Acknowledgement and Feedback

Re-inventing the goal setting

The traditional approach to goal setting is to define the goals & KPI’s with respect to roles people play in the company. During the annual ritual of PM process, every person in the organization tries to prove that they have moved beyond what the KPI’s are stating. Here are the flaws of traditional goal setting process :

  • Goals are too longish in nature that it’s difficult to remain focused on them. By the time you finish define the goal, because of the dynamics of the business environment, goal post changes.
  • The KPI achievement is rating and perception driven NOT data driven. Per Phycology Today, humans tend to lie about their performance.
  • Defining KPI weightages add to more confusion and doesn’t help an employee to judge where she should spend her time.
  • KPI’s itself are too subjective in nature defined in a complex way that a normal person can’t understand it.
  • Most of the KPI’s are lag indicators and are not combined with the lead indicators which can tell us more story on why its not achieved what you are supposed to achieve.
  • Word matter. Pick up any goal or KPI statement, most of them are hardly motivating that a person feels like chasing those.

The new way of goal setting should be Agile in nature and should focus on:

  • Shorter duration goals (monthly or quarterly) backed by the action plan on how that goal will be achieved. The action plan will reduce the subjectivity involved.
  • The progress on action plan should be updated on the weekly or monthly basis, which will help reflect how the person is going on the goal, and whether it will be achieved or not.
  • Each goal should be linked to the overall company objectives thus giving visibility to the leadership on how the company is performing on strategic and operations priorities.

While the advantages of setting the Agile goal process are enormous, implementing the agile process at scale need a high level of discipline within the company.  The success of implementing the new way highly depends on the content(which means goals and its action plan) which goes into the system. Otherwise , the new way will also face the same challenges of traditional way which lacks adoption by people.

Re-inventing Manager / Employee Conversations(1-On-1’s)

While the manager-employee conversation is the core to enable employee evolution, most companies don’t know how to facilitate this in right way. In the traditional way of PM, the formal performance discussion between the employee and manager leads to manager justifying the rating given to employee. The successful implementation of manager and employee conversation starts with

  • Training managers on how to conduct a conversation and give feedback to the employee on how to be more productive and perform better.
  • Give the context to the conversation which forces the open-ended discussions between employee and manager.
  • Collect data points from the discussion to check at company level how conversation are going and how managers are leading these conversations.
  • Combine this process of discussion with the Agile process of goal setting so that manager and employee have the conversation about goal progress.

Re-inventing Acknowledgement and Feedback

At the time when you give feedback to your Uber driver by the time you are out of your cab, feedback to an employee is given once a year. Feedback and acknowledgment of the work should be continuous & real time. While setting up the 1-On-1 process and conducting in quarterly will help you to re-invent the wheel of feedback, what if someone has to give feedback to someone after the meeting or a product launch or after a particular event in the company.

The data generated from the agile goal process, 1-On-1 and continuous feedback should generate enough data for you to help understand how your culture, people, and metrics are performing. And as Ray Dalio, famous CEO of Bridgewater Consultants and author of the book Principles says

“If you can’t visualize how your culture, your people, and your metrics are performing, you will inevitably fail to realize your organization potentials and growth”