It’s not a key result unless it has a number.
– Marissa Mayer
What you measure, you manage. OKRs and their predecessors MBOs are great. They’re also incomplete.
One unrecognized gap with OKRs, or how many organizations implement them, is that they are agnostic about why something worked. This is an important component of being a product development team.
Consider a key result of increasing new user signups by 5%. A product development team responsible for the signup flow could achieve their KR from pure luck or an external influence by a marketing team while they did nothing.
While dated, this story of microchip yield rates captures my point.
[The chip fabrication] process only seems straightforward. In reality, the entire operation has about as much built-in voodoo and superstition as a major league baseball team. No one is even quite sure why “yield rates” (the percentage of good chips) are what they are. Thus, when they suddenly fall, there is general panic. When they rise, fab managers scurry about trying to find the magic key. Short of a scientific solution, the managers revert to an almost primitive faith in retaining every vestige of status quo. One of the women wore a “silk blouse that day? Then she’ll wear it every day. Someone else used his left hand rather than his right to dip the wafer in acid? Then from now on he’s a southpaw.
Objective: Extend production quality well beyond best-in-class standards
Key Result: Increase yield rates from X% to Y% by end of quarter
I hope that team would have the intellectual honesty to admit they achieved their goal without understanding why. Without doing so, an organization is choosing to not understand why they are effective. I’ve written before about efficiency and process trumping effectiveness and understanding.
My understanding is that Todd McKinnon chose VMTs (Vision / Methods / Targets) at Okta instead of OKRs in part of because of this. The methods were much more about the why.
So what to do? Certainly let’s not throw out OKRs. But we should require an element to explain why something works, not just that a result was attained.
As I was writing this post, Roger Martin wrote a piece titled Stop Letting OKRs Masquerade as Strategy . Martin puts his finger on the same soft spot I’ve been describing applying the lens of his own planning and goals framework. In his own words:
…there is a huge gulf in the middle that OKRs are likely to miss. I say likely because I am sure some practitioners of the OKR approach have a way of filling in the strategy gap. And that gap is an explicit theory of the…choice that will make the objective/aspiration more than a pipe dream. If that gap is filled in the middle, then ‘O’ and ‘KR’ make a perfectly good set of bookends.
Yes, measure what matters. And don’t forget to manage toward that by understanding why the key results will help you achieve the objective.