Biggest Mistaking in OKR Implementation: Cascading OKR

One of the biggest reasons for failed OKR(Objective & Key Results) implementation is Cascading OKR’s. Cascading means your Line of Business(LOB) Head Key Results becomes the Objectives for the reports of LOB Head. And then the flow of cascading goes own till the last mile in the company. It looks something like this:

OKR Cascading

The 3 major flaws with Cascading OKR’s

  1. If your OKR cycle is quarterly, which means you create and close OKR’s every quarter, then you end up spending too much time going top-to-bottom. What if the cascaded OKR ownership needs to be changed? In 90 days, deciding your OKR’s and then cascading means you end up your entire time in cascading than execution.
  2. Cascading means CXO’s and Managers are not owning any Key Result, which means they are not executing anything. But that’s not true in the real world and should not be true. If that’s what you want to implement, then you are again promoting hierarchy in your company.
  3. Deciding which Key Result to cascade and which to not is not always clear.

We at qilo,  have learned it in a hard way after many implementations. Clients want Cascading, and we have given them what they want. But at the end, any OKR Software success depends on the OKR implementation and adoption by the people who will execute those OKR’s.

That’s why we at qilo, have focused more on 2 things for successful OKR implementation:

A.  Aligning OKR’s with CEO’s Annual Operating Plan or Strategic Initiatives. This approach is bi-directional and works wonderfully. It gives clarity to CEO and his team that as an organization, where we are going, and how we are doing. And for an employee working below the CXO level, it gives them clarity of how they are connected with the big picture. The only trick here is to successfully come up with the set of 3 to 5 business priority statements that don’t overlap and clearly linked with what company wants to achieve in that financial year.

B. Creating Team-based OKR’s: Rather than cascading, create the team-based OKR’s where Key Results are owned by multiple people. These KR’s go beyond the hierarchies and departments.  The concept is bit more difficult to digest at first, as managers want to hold their boundaries and don’t want people coming from different teams and hierarchy coming directly to their OKR’s.  But it beautifully solves the problem of cross-functional communications and collaborations. Mind you, this needs a bit of change management to occur.CEO and/or COO himself has to take the ownership of communicating why we are doing this.

Summary

  1. Cascading OKR’s results in wasting too much time setting OKR’s.
  2. For successful implementation, Align OKR’s with company’s Annual Operating Priorities or Long-term Strategic Priorities.
  3. Creating a team-based OKR’s aligned with the company’s priorities results in better team communication and collaboration.