One of the most important skills that a modern leader can possess is the ability to align their entire workforce to the big vision of the company, that's why talking about OKR disadvantages is very important!
Objectives and Key Results (OKRs) have become widely popular in the business world. Many companies have adopted the framework in order to ensure growth and attainment of goals. The success of the framework can be seen in companies like Google.
The concept involves the setting of goals and key results. Normally, the CEO and the key leadership team of the company will set OKRs, then the departments or management teams will follow suit by setting their OKRs in line with that of the company.
This system promotes accountability and responsibility in a company because everyone knows what the other is doing. However, just like any other goal-setting methodology, there are some challenges in executing OKRs.
Calling them OKR disadvantages would be a strong expression, but knowing how to deal with them is crucial in order to get the best results.
Challenge 1: How Specific Should OKRs Be?
Many managers encounter the challenge of writing OKRs in terms of how specific they should be. The general principle is that the more specific the Objectives ad Key Results are, the better.
One of the primary aims of this system is for each employee to know exactly what needs to be done for the attainment of the company’s OKRs. Managers can easily create expectations by writing specific key results.
Some would wonder if being too specific will lessen the creativity of employees. However, OKRs are about the “what” and not the “how”.
In order for the framework to be effective, companies need to let their employees utilize a “self-managing” approach in which they can have the freedom to decide HOW they are going to achieve objectives.
Challenge 2: How to Measure OKRs
One of the main features of Objectives and Key Results is that they are measurable. This may prove to be a challenge for some teams, especially those that perform highly technical jobs, such as software developers.
To beat this challenge, it is advisable that employees put their milestones as their key results. They need to break down their objectives into different stages and utilize them as KRs.
Understand that KRs are different from tasks. Key results have to describe your milestones.
Challenge 3: Setting Ambitious yet Attainable Goals
OKRs are meant to challenge the employees of a company to set ambitious goals. But that does not mean that they should set unattainable goals.
There’s no room to play it safe, but the goals have to be realistic too. Managers have the responsibility of motivating team members to stretch their goals with adequate resources and support.
To set challenging yet realistic goals, you need to check facts such as historical data to understand the trend of your business. Thereafter, you should discuss with your employees about why you would want to raise their quota (with details of how it will benefit the company).
This discussion will be beneficial in understanding the potential barriers that your employees think they might come across.
Challenge 4: How to Keep Your OKRs Relevant
Experts recommend using the 70/20/10 model when writing Objectives and Key Results.
This means that 70% of your OKRs should be related to your main duties and roles, 20% should be about projects/initiatives that are related to your position and 10% should be for personal projects that you are passionate about.
Employees need to be given the freedom to pursue their own personal projects for personal development and growth.
Challenge 5: How Often You Should Set OKRs
Some companies prefer to set OKRs quarterly, monthly, or annually. Some prefer the combination of two different timeframes or three. Experiment with what works for your company and your employees.
However, setting longer timeframes might affect your team’s ability to adapt to changes.
Regardless of the aforementioned OKR disadvantages, OKRs is still one of the most effective goal-setting frameworks that 21st-century companies can ever have. Below are some of the benefits worthy of mention.
- Greater Team Engagement: This is due to the fact that employees have a clear understanding of their goals and how they can contribute to the company through their roles.
- Better Use of Resources: The system helps to avoid creating duplicate objectives. There’s less chance of two or more teams having the same project/initiative. This results in better use of resources, which means less money, effort and energy is used. Remote teams or those that are working from different geographical areas will benefit from this.
- Better Communication and Stronger Connection: This framework helps to strengthen the connection between departments and teams within a company. In most companies that have adopted Objectives and Key Results, there’s a systematic approach to cascading individual and team-level OKRs. And since employees can see what everybody else is trying to achieve, everyone develops an understanding of the roles of other team members and how to support them.
- Better Performance: With OKRs, employees will have clearer expectations of what they need to achieve. Also, managers can easily track the progress of their team members, coach them and organize feedback sessions or conduct check-ins. These will be more targeted because the manager knows exactly what the team member is working on.
In view of the above OKR benefits, your company is better off adopting Objectives and Key Results than not having any goal-setting framework at all in place. You need this to keep everyone in your company on the same page.
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If you liked this article and you are looking for a way to align everyone in your organization, let’s have a call or simply download our OKR Guide. We also offer OKR consulting and OKR training, but our approach differs from other companies, we believe OKRs should be fully integrated with your product development.