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Monitoring OKRs

Francisco Homem de Mello

More important than the definition of OKRs are the rituals that form their cadence: what we’ll call monitoring. Monitoring is where the rubber meets the road. It’s where the benefits of OKRs (performance, excellence, alignment, and learning) come to life and produce better results across the enterprise.

Results meetings

The first and most important part of monitoring OKRs is Results Meetings.

Results meetings are cadenced gatherings where a leader will meet with her direct reports to discuss their OKRs and Projects.

The meeting agenda is incredibly simple: Every direct report has an allotment of time where she presents which OKRs and Projects on her panel are off-track, then explains why these OKRs and Projects are off-track, and, finally, enumerates the actions she’s already taken to get them back on track. Summing it up, every participant states:

  • Which OKRs/Projects are off-track
  • Why these OKRs/Projects are off-track, and
  • Which actions are already under way to get these OKRs/Projects back on track

Why focus only on what’s off-track? Because time is extremely limited, and meetings can quickly become long and boring. Therefore the focus is exclusively on what’s “red.”

Fostering the right culture

A big part of making monitoring, and OKRs in general, work is to foster a constructive, positive environment around these meetings.

It’s of the utmost important that those employees who present what’s off-track aren’t condemned or humiliated in public. The idea isn’t to scold people in front of their peers, but to solve real problems and think.

The idea is that there’s nothing wrong with making mistakes – that is, forming hypotheses of how you’re going to hit your OKRs that don’t work out. The only problem is if people make commitments, like action plans, and don’t follow through with them. That sort of problem should be handled offline as any other behavioral issue.

We can attest to the fact that when people honor their commitments, even not hitting OKRs feels constructive and productive, because Results Meetings tend to be intellectually challenging and interesting. People are honestly trying to figure out what was wrong with their reasoning and what they’ll do differently to get OKRs and Projects back on-track.

A great framework for assessing progress

In order to create a culture of learning and problem solving (as opposed to a culture of guilt and finger pointing), we seek inspiration in how Vicente Falconi (2012) suggests goal attainment be analyzed. He describes a two-by-two matrix that has, on the one side, if the action plan was executed or not, and on the other, if the OKR was achieved or not. With it, we are able to analyze whether an OKR has been achieved “on purpose” or “by chance,” and the same for OKRs that were not achieved (remember, on-track OKRs won’t be discussed in Results Meetings unless there’s a lot of time to be spared).

  • Quadrant 1 – actions were executed according to plan, but the OKR is off-track: In this case, the hypothesis, and thus the action plan, were wrong. The team has to find out why the plan was wrong in the first place, and adjust it.
  • Quadrant 2 – actions weren’t executed according to plan, and the OKR is on-track: Here, the main focus of the meeting should be on what caused the OKR to be on-track even though the plan wasn’t executed. It’s great that the OKR is on-track, but the team should understand exactly what factors weren’t factored in in the first place. Of course, it’s also important to understand why the plan wasn’t executed. If there were reasonable exogenous factors that prevented the plan from being executed, the team must understand why they were not neutralized with new actions or alternative courses of action. Of course, sometimes lack of execution just means a behavioral problem, which should be addressed one-on-one by the manager.
  • Quadrant 3 – actions were executed according to plan, and the OKR is on-track: Even when OKRs are on-track, teams must carefully reflect on their achievements, and assess whether they’re a consequence of the action plan or of exogenous factors. What factors were these? Why were they not foreseen? The team must understand the whys behind each response.
  • Quadrant 4 – actions were not executed according to plan, and OKR is off-track: This one is the easiest. The solution is just to get back to executing the plan, and to figure out why the plan was not carried out in the first place. The manager should also figure out, as discussed in Quadrant 2, why the plan wasn’t execute and treat possible behavioral issues one-onone accordingly.

Now let’s talk a bit about some tools that can help you fig ure out why things are off-track prior to Results Meetings.

Five Whys

The “five whys” is a very simple method to get to the root cause of a problem. When people get on the first layer of a problem (the first “why”), they tend to only scratch the surface of the problem. Therefore, the tool suggests asking “why” to a problem as many times as necessary (five is just a placeholer) until the ultimate root cause is encountered.

A simple example can illustrate how “five whys” works:

Question: Sales fell by 10%. Why?

Answer: Because of the demonstrations that took place in the city.

Q: Why did the demonstrations affect sales?

A: Because some streets were closed, and our trucks couldn’t reach the merchants.

Q: Why couldn’t our trucks reach merchants?

A: Because the only open streets were narrow, where our trucks couldn’t pass.

Q: Why weren’t smaller trucks used to deliver goods on that day?

A: Because we don’t own smaller trucks.

Boom! You’ve reached the root cause of the sales downturn, which is far more subtle and specific than simply blaming the demonstrations.

Great root-cause analysis makes planning easy. In this case, the suggestion is to lease smaller trucks to be used during the rallies planned for the next month. If sales keep up after the experiment, the company then adopts a new standard: to arrange for a fleet of smaller trucks to be on call for such unforeseen events.