Today, organizations are grappling with high interest rates, cost pressures, declining revenues, and the transformative influence of new technologies like AI. For this time of tremendous uncertainty and complexity, Jeff Gothelf and Josh Seiden believe that OKRs (Objectives and Key Results) pave the path forward.
In a recent webinar, we sat down with these esteemed authors and Lean UX and Agile thought leaders to understand more about the nuances of OKRs, particularly how they can help redefine value within organizations. Their unique perspective emphasizes customer-centricity as the key driver of value, particularly through OKRs. In today’s market, maintaining a focus on customer behavior is crucial because it ensures that outcomes are not just metrics, but tangible results that answer the question, “What will people be doing differently?” By aligning OKRs with customer wants and needs, teams can maintain clear direction and measure the impact of their work on big-picture innovation goals, even during challenging times.
This conversation has been edited for length and clarity.
What are OKRs?
Jeff Gothelf: OKRs are a goal-setting framework for teams. They offer a different way to think about goals, focusing on measuring results in terms of customer behavior. OKRs change how we work, affecting the cadence, level, kind, and frequency of communication. They promote transparency and evidence-based decision-making.
By default, they require incorporating research and product discovery into your process because as a team or organization, you must determine what to create, validate those choices, and adjust accordingly. Lastly, the culture that supports this process and goal-setting framework is crucial.
A brief history of OKRs and command and control leadership
Pete Bradd / Miro: OKRs have their roots in the 1950s with Peter Drucker’s Management by Objectives. They were introduced at Intel in the 1970s and then popularized by Google.
In your book, you both write about command and control leadership (a hierarchical organizational structure where decisions are made from the top down), which is what Peter Drucker was trying to tackle back in the 1950s. Why do you think this is still prevalent in 2024?
Jeff Gothelf: There are a variety of reasons. First, we’re battling a hundred years of historical inertia in management theory, canon, and lore. Management was born out of manufacturing, and we built tools for optimizing production. It’s been difficult to let those go because they influence how we budget, measure success, incentivize teams, and measure progress and value.
Despite software having been around for 50 years and most businesses being software-based or built on technology, people still find it difficult to realize that producing software doesn’t necessarily mean producing value. Many companies believe that making more digital stuff will create more value for customers and users. However, producing software only guarantees more software and technical debt. It’s what people do with it that shows if we’ve delivered value.
When we observe and learn from what people do with our products, we often find out we were wrong—we built the wrong thing, didn’t design it well, didn’t position it well, or priced it incorrectly. Most organizations still see being wrong as risky, especially at higher levels. There’s a fear of being wrong, so leaders tell people what to do without reviewing the outcomes. This way, they can say they did their job by instructing their teams. I think that’s why we’re still having these conversations.
How OKRs get the whole team on the same page
Miro: You’ve written about outcomes, alignment, autonomy, and agility. What is it about OKRs that can help solve this big problem of getting lots of people to align on a shared vision?
Josh Seiden: When we wrote the first edition of Lean UX in 2013, it was intended for the individual contributors and their managers—the people with their hands on the keyboards. The book was very successful, and we received a lot of positive feedback. But the one piece of critical feedback we received was that people still needed help with challenges on the organization-level. While there are things they can do to improve the way they work as individuals, what about the stuff that’s out of their control? How can they make their organization better?
We’re optimists, but this is a hard problem. OKRs offer us a simple and easy-to-understand framework for what an organization might look like in the future. It’s hard to align large groups of people, and part of doing that is getting people to agree on what a shared future might look like. But with OKRs, this framework is simple enough to communicate and set that shared vision.
What makes OKRs so hard?
Miro: You guys have an entire chapter in the book for FAQs and common questions that people have when you give talks about OKRs. Why have OKRs been so hard to implement? How is your approach going to help solve that?
Jeff Gothelf: It’s a lot like Agile. Agile was brought into many organizations because they saw other organizations doing it, and they said, well, if they’re doing it, we need to be doing it as well. Then it was a disaster because there was no real understanding of what it was or how to implement it. There was no real understanding of what had to change to truly be agile, lowercase a, to increase the agility of the organization. We’re seeing very similar patterns with objectives and key results.
Oftentimes, leaders try to institute OKRs, and people are forced to go through a series of activities without any real connection to the work they’re actually doing, and without any fundamental changes in the way that the organization functions. So it ends up feeling like a box-ticking exercise.
OKRs are difficult to get right because people don’t understand the changes that have to come with it. One of the big questions in the book is what will people be doing differently when we’re done? Think about this in terms of output versus outcome. Most organizations are treating OKRs as output, so nothing really changes. Instead, they need to say, if we implement OKRs successfully, what will we be doing differently to prove that it worked? What do we hope to see? Very few organizations are having that conversation.
Watch our full conversation
Liked this recap? Well there’s more where that came from! Our full conversation offers more insights and tips for how to maximize innovation and impact via OKRs, so make sure to watch the full recording. And if you’re interested in a deeper exploration of OKRs, Jeff and Josh have created a comprehensive template available on Miroverse. This seven-step approach provides a practical guide for teams looking to implement OKRs effectively.
