Scaling OKRs, Part 5: Reconciling and Approving

The most effective OKR-setting process involves both leaders and teams. Go top-down and bottom-up.

So far in this series on scaling Objectives and Key Results, we’ve covered how strategy is the foundation, how to identify your organization’s OKRs from its strategy, why you should start small and scale up, and how to write OKRs at the team level. In this fifth installment, we take on the concept of “cascading” OKRs and the roles of both teams and leadership in getting OKRs set and approved.

Setting OKRs is a top-down and bottom-up process

There’s a school of thought that prescribes so-called “cascading” OKRs. Management sets a high-level goal and then determines how that goal cascades down to the organization’s individual business units and teams. This process is certainly the simplest for setting OKRs since it involves a relatively small number of people making decisions and approving the new goals. It’s also more ineffective.

The risk of setting goals for our teams is that it gives a perceived lack of agency and autonomy to our employees. Will our teams work towards the goal you determine for them? Yes. Will they work towards it with the same energy, focus and creativity as a goal they set for themselves? That’s a lot less likely.

Once the high-level goal is set, we want to ask our teams to determine their own OKRs that:

  1. Reflect the domain over which they have influence (e.g., My team is in charge of the authentication workflow, so we will focus our OKRs on that.)

  2. Function as leading indicators of the high-level goal.

These two factors help the team commit to a goal that they can achieve because it’s focused on the world they control. On top of that, they can now speak intelligently about why they’re working towards this goal. They can draw a line between their work and, ultimately, the high-level goal set by leadership.

There’s one other bonus: Teams are far more motivated to achieve a goal they set for themselves than one that was given to them. They made the commitment themselves. They believe it’s realistic, and they want to live up to the expectations they’ve set with leadership. Their motivation, innovation and creativity will reflect that.

We meet in the middle

When teams set their own goals, leadership has to approve them. In addition, they need to reconcile them with all the other teams’ goals. Leadership sends the high-level goals down to the teams. The teams then determine how they’ll support them. When they’ve figured out the OKRs for how they’ll do that, everyone meets in the middle for teams to make the case for their goals and get leadership to approve them.

It’s critical for teams to be able to tell a compelling story about the OKRs they set for themselves. They need to clearly spell out why they chose the objective they did and how the behavior changes they’ve identified as their key results ultimately lead to achieving the organization’s key results. Teams will likely need support here to connect their goals and work to high-level goals like “revenue” and “market share.” Leaders, support them with access to data and the people who can help them make sense of it.

Meeting in the middle provides leadership with a higher-level view of how the teams are aligning. You can now see the forest for the trees and begin to identify both strategic discrepancies where the goals don’t line up correctly and duplicate or adjacent efforts between teams that can be combined and consolidated.

Cascading OKRs neuters the team’s initiative and motivation. They’ll still do good work, but they’ll do better work if we allow them to determine their own goals and then meet them in the middle to determine how best to proceed.

Me with friends and colleagues in Bucharest, Romania, this week.

What I've been up to

I traveled to Bucharest recently with my entrepreneur forum as part of our annual retreat. I’d never been before and, needless to say, I learned a lot.

I’m super excited about the 2-hour webinar on User Story Mapping and OKRs I’m doing on June 13 with Jeff Patton. I haven’t worked with Jeff since before the pandemic (in fact, he was the LAST person I worked with before the lockdowns), and we haven’t done a public event together in an equally long time. Learn more and sign up here. 

Otherwise, I continue to train teams in Lean UX, product management and OKRs. You can learn more here. 

Finally, Josh Seiden and I continue to work on our OKR book. Want to stay in the loop? Sign up for the waiting list here at www.OKR-book.com.

Watch, Listen, Read

Watch: Silo, Season 1 – I just can’t get enough of post-apocalyptic sci-fi shows. This Apple TV+ show starts with the last remaining humans living in a mysterious silo and no one knows why. It’s a little slower than I’d like it to be, but by Episode 6 it really gets going.

Listen: The War on Drugs – No one can accuse me of not giving every “dad rock” band a fair shake, and Philadelphia’s own The War on Drugs has been one of my most-listened-to bands in recent months. I got to see them live a couple of weeks ago, too. Solid rock and roll. Highly recommend.

Read: $500 Million Robot Pizza Startup Shuts Down – Not a book this month, just an article about yet another startup that got tons of money and set it all on fire. Why? Because they never figured out how to get melted cheese to stay on pizzas being cooked in moving vehicles. Wow. Just wow.

Interested in working together? Please reach out. 
In case you need it, here's a description of what I do.

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