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:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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 “.
- 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.