OKRs vs KPIs
Many organisations have set up existing KPIs that help them to track the state of key measures across their organisation, with these either being transparent to all or shared at regular townhalls. The temptation would be to use these in their entirety within Viva Goals to power the key results of your OKRs but that would be a mistake. One of the super powers of OKRs is to have Focus and to share that Focus from the strategy of the organisation at the top down to each level. Empowering each layer in an organisation to define their own metrics for success for the top level objective brings a more personal goal that is aligned to what the organisation is striving to achieve. You can read more about my thoughts on this in a recent article I shared through Reworked - Why You Need Both OKRs and KPIs (reworked.co). What have you done in your organisationI used to think that OKRs were not for everyone...
So my response to a post from BrittHarper90 got me thinking about how my/our method at TBG has evolved over the years regarding that perennial question: how many OKRs should we have? I've worked with clients who called me in after having dived head-first into OKRs and mandated that everyone in the organisation should have their own. This didn't go well for several reasons: The amount of managerial effort needed to review & reset every quarter was huge, so the effort expended/benefit realised equation was way off in the negative People felt "forced" to develop their own OKR that directly aligned with Exec OKRs. The result: Over 1000 people tried to align with the CEO's OKRs. These had next to no value and caused significant anxiety for those who's work was more "transactional" and so didn't have a direct contribution to make to the growth and transformational OKRs the Exec had. The focus was on individual OKRs which did nothing to foster shared goals and stronger collaboration across the organisation. It's worth mentioning that each time I've seen this, it's been HR who have been leading on the OKR implementation. HR definitely have a huge role to play. Still, in my experience, implementations work best when led by those responsible for the strategic planning process across the organisation. If that specific function doesn't exist, then the COO or Chief of Staff are usually well-placed to lead. Based on those experiences, my opinion has since been: have as few OKRs as possible and think of them as a spotlight to shine on what will generate the greatest value for the organisation. Makes sense, right? I always thought so, and for a lot of clients, it works for them. However, I've shifted on this and I'd like to share how and why. Let me introduce to my concept of "hard" and "soft" alignment. Hard alignment is when you have a clear parent and child relationship between two OKRs. You believe that the child OKR (eg. a 3 month OKR) can make a direct contribution towards the parent OKR (eg. often a 12 month OKR focussed on a strategic priority). These are governed by a recognised cadence of check-in and reporting back up to Exec teams. Soft alignment is when you have an OKR which you believe will have a less direct and more general contribution to a strategic priority or theme. The governance around these is less formal and they don't need to be reported back up to Leadership. By making this distinction, I've found that it helps open up OKRs to those teams who are not in a position to directly contribute towards a strategic priority but can still do their bit, albeit indirectly. Lets look at an example: If the organisation had a strategic priority to improve the quality of its service, it could have one or two specific transformational OKRs which will help to drive that (hard alignment). Also, for a team who's work is more transactional like a logistics team, might still have their own ideas about how they could contribute and so could develop a team OKR to test out their ideas but these are in line with a strategic "theme" (big move I like to call them) rather than a specific parent OKR (soft alignment). By making this distinction, I've found that OKRs can be for all, and not at the expense of creating a bureaucratic beast of a process that buckles under its own weight.Understanding the connection between OKRs vs. Performance Management
The movie "Air" details the intricate relationships that led to Nike signing a young Michael Jordan to his first basketball sneaker contract, and the creation of "Air Jordans." As part of the negotiation, Jordan's mother pushed for -- and received -- a stipulation that the family would earn a percentage of sales for every sneaker sold. The movie ends with Nike CEO Phil Knight (played by Ben Affleck) pondering how many sales they might possibly generate, which Nike estimated to be $3 million in the first three years. The movie later revealed staggering sales of $126 million in year one for Nike, and Jordan winning Rookie of the Year and making the All-Star team on his way to becoming the greatest player of all time. Talk about crushing your goals! I bring this up because there are a lot of elements of "goal setting" at play here ... Nike as a company, Jordan as an individual, sales targets, CEOs, agents, customers, and other stakeholders. At Microsoft Viva Goals, we often get questions around the intersection of goals and performance management / personal development. After all, we're talking about goals, right? What's the difference between the goals we set as a department, and the goals I talk about with my manager at our 1:1? That led us to publish our point of view: Understanding the connection between OKRs vs. Performance Management Within the document you'll see we present 4 key pillars: OKRs are designed for collaborative, strategic goal setting for your business and teams. Performance Management is used to define individual priorities in support of the larger team effort. OKR output could be one of many inputs into an assessment of an individual’s performance, but it’s important that it’s not the only input. OKR output should generally not be directly tied to an individual employee’s compensation. If we apply these to our Nike story, CEO Phil Knight would have set company-wide OKRs for his entire organization. In addition to goals around their running sneakers and clothing, they might have had an aspirational objective of expanding their market share for the basketball division (people forget at the time, Nike was a distant third to Converse and Adidas), and a key result metric of exceeding $1 million in sales a year of Air Jordans. (Boy, would the percentage results in Viva Goals have been off the chart that year). For the use of this example, remember that Michael Jordan wasn't technically an employee of Nike. A better analogy might be Peter Moore, the designer of the shoe. While he might have had a team OKR around the launch of Air Jordans, his individual priorities would have been judged on a broader basis ... how did he contribute to his team, what was his individual impact, how well did he work with his peers, etc. If he was in his personal review, while the success of Nike selling $126 million in year one certainly would have been one of many inputs to his review, it shouldn't have been the only input. Here at Microsoft, we love aspirational goals. So whether yours is for your company to launch a $100 million brand, or a personal goal to become the greatest of all time at what you do, OKRs and Performance management can lead the way. To learn more, review our document: Understanding the connection between OKRs vs. Performance Management
What's the most difficult part of starting an OKR journey?
I've been thinking about starting energy--how it's hard to pick up (and keep!) a new project or habit. Multiply that by 100 people and finding the starting energy to change how we work seems almost impossible. I'm curious to learn from others' experiences. What's been the most difficult part of getting started with OKRs/Viva Goals (leadership buy-in, cultural change, learning a new tool, etc.)? Have you found strategies that work? Or wishlists that could make it easier?Alternatives to Viva Goals?
Viva Goals being retired wasn't good news. It put many of us in the community in a pretty tough spot. There is less than a year to find a new OKR software and migrate. We really liked Viva Goals because our team could use it inside Microsoft Teams. Some of the alternatives we are considering switching to are: Teamflect WorkBoard Perdoo All three of these have great Microsoft Teams integration and solid OKR features. We are also considering other alternatives such as Profit Co and Lattice. Any opinions on or experience with these tools?
How My Team Got Started with OKRs
My team recently started helping our clients to create accountability and transparency through Viva Goals, and understanding OKRs has been foundational to enabling success. I'll share how we got started with OKRs: 1. First, we sought to understand the difference between OKRs and other goal setting frameworks. For example, in my experience as a Strategy & Operations professional, I was much more acquainted with KPIs (Key Performance Indicators) than I was OKRs. I found that KPIs are a measurable way to understand performance, but they are missing some key elements that OKRs bring to the table: the "why?" behind the measure, and the "how will we get there?" steps to achieve it. 2. Next, we took advantage of the Viva Goals materials within https://learn.microsoft.com/en-us/training/browse/?products=viva&terms=viva%20goals. There is a wealth of training courses and information there that really helped us in our learning journey. 3. Lastly, we practiced using OKRs! We set OKRs for every engagement now, and not only has it been a great way to grasp the concept -- it has enabled us to set aspirational goals and go back regularly to measure how we are performing against what we set out to do. How did you get started with OKRs?How to bake OKRs into operating rhythms 🥁
It's the start of fiscal year planning for Microsoft and that means budgets, OKRs, and product planning are top of mind in Engineering. We try to infuse OKRs into the culture by: Having teams estimate the impact of their Engineering initiatives (e.g. ADO epics) on OKRs during their product planning. This helps give visibility into the engineering investments and how they are expected to impact our OKRs. Reviewing OKRs as part of our Monthly Business Reviews. As we all know, planning and estimation is a non-trivial effort. I find the effort up-front helps to set expectations and tells us if we are on track during our monthly reviews. We bake OKRs into the operating rhythms with templates that include a column for the estimated impact in planning documents. During MBRs, we review OKR status and call-out engineering investments that may be putting a KR at risk. Speaking of tying initiatives to impact, some of our teams have been using Viva Goals "Projects" ️ entities to track the initiatives explicitly. Have you been tracking your initiatives using Projects? I'm curious if other teams are leveraging the "Projects" in this way. One thing that I think would be great is if the Viva Goals Projects could have a metric value associated with Key Result. Currently, we have just been including the value in the Title so that it communicates the weighted impact on the KR. Would you find it valuable to have a weight or value associated with the Project entities?Creating alignment from all levels
https://www.mcchrystalgroup.com/strategy_alignment/ has been the bread-and-butter of my company for at least a decade. When our President, Chris Fussell, talks about front-line leaders driving the pendulum forward, in some sense he's speaking to the ability of real-time information driving changes to the company's strategy at large. To that end, Viva Goals is not only a reporting tool for objectives, it's also a means for the organization to align to the environment. Leaders driving success with OKRs who fail to review the context of Key Result reporting are missing the evaluative value that Goals feedback provides. At the very least, this is a necessary component of the quarterly close-out, if not worthy of a more frequent review. Does your organization have any real, tangible and transparent mechanisms to inform your strategy, or do your senior leaders do all the talking? Is your strategy static until the year-end close, or does it live organically driven by the context in which its operating?
