The Dark Side Of OKRs (And Why We Should Care)

Antoinette
Written by
- 6 min read

If we could tag one apocalyptic rider for adaptive organizations, it would be "traditional performance management." It is old-fashioned performance management that keeps us in a world of humans as resources, as command-and-control takers, with rigid top-down planning, and solid prevention of curious and exploratively-minded cooperation. Its logic is plan – do – check – act.

article photo

A logic, where individual goals are defined top-down from corporate objectives, any doing is checked against this goal accomplishment in the form of "feedback," and carrots are used to enable "pigeon training."

Most of us will agree that all of this is true for old-school management by objectives, but do we realize that some of the new co-creation tools – such as OKRs (Objectives and Key Results) – are maybe not much better?

At its core, management by objectives fulfills three different management functions where goals are to: a) coordinate and align individual and team efforts with those of the organization, b) channel information on those aspects most important from a corporate perspective, and c) create a motivating push.

Organizations that opt for adaptiveness, agility, and resilience have started to reform this goal process to enable decentral coordination and learning by allowing for much more participation, bottom-up input, and co-creation, thereby relinquishing the information monopoly.

For instance, so-called "FAST goals" are Frequently discussed (quicker-paced and more bottom-up), Ambitious (difficult, but not impossible to reach), Specific (concretized by measurable milestones), and Transparent (shared within and across teams).

Hence, these goals take local knowledge onboard and make sure that coordination is not dependent on hierarchy. The same logic applies to OKRs.

Better? Yes, but not all good!

Because irrespective of whether FAST goals or OKRs are applied – the spirit of pigeon training is still present as both bank on "make your goals specific", "be overambitious", and "show everyone what you have accomplished anytime".

Thus, these goals should come with a warning: "May prevent human ingenuity and co-creation to take place."

To be fair, they have a mighty motivation theory on their side when doing this: the goal-setting approach.

This theory has sparked a lot of what we take for granted in business but also coaching, namely: (1) goals are needed, (2) specific goals are better than "do your best goals" as these provide direction and a clear focus, and (3) ambitious goals exert a stronger motivating push than realistic goals.

Yet, in recent years, several studies have shown that the very success factors of such goals carry downsides, which are particularly problematic for agile organizations and co-creation. These are rooted in largely ignored psychological side-effects, which should be taken into account when working with goals.

Specific goals can make you blind

Specific goals give a focus but at the same time can also act as blinders and thereby prevent out-of-the-box thinking. Do you know the "invisible gorilla experiment"?

In this experiment, participants were exposed to a short video with players passing a basketball. They then got the specific goal to count how many times the ball was passed.

This simple instruction prevented half of the participants from spotting a giant gorilla passing by the ballplayers – it was as if the gorilla was invisible. Why? Because the attention was focused squarely on the task.

Specific goals thus can undermine mindfulness and spotting the unfamiliar, unplanned event. Therefore, it turns out that for agile and creative work that is to respond to changing environments and enable exploration, some amount of goal fuzziness can be helpful.

And by the way – the right amount of fuzziness needs to be teased out by experimentation as there is no handy formula for this.

Overambitiousness creates unwanted overheating

Besides, it is almost impossible to determine the right amount of ambitiousness.

Sure ambitious goals trigger "fire" or, more prosaic, a strong will to succeed. But what has become clear, too, and should not be ignored: overambitious goals – as argued for in FAST and OKRs - carry a lot of risks.

First: if goals are too ambitious and humans never stand a chance to reach these goals, their self-efficacy can deteriorate. However, self-efficacy is a needed resource if we want humans that have a curious, open, and pro-active mindset.

Second: for overconfident humans, on the other hand, ambitious goals create such a will that every means to attain the goals are used. Hence, overambitious goals can also evoke gambling behavior.

Third: overambitious goals – particularly when enacted as "preventing sandbagging" as a standard instrument, can lead to emotional depletion, even to the degree that out of this depleted state, employees start to show unethical behaviors . Hence the manipulation of "ambition" can backfire – enormously.

Transparency meets privacy needs

A further challenge comes with the transparency principle. In its original design, both OKRs and FAST goals bank on individual transparency – everybody knows everybody's goals as well as goal achievements. Yet here, too, psychological research shows some downsides.

First, the balance between transparency and privacy is a delicate one. Too much exposure can backfire as this can feel like a panopticon, a hardly visible but strongly felt control. Consequently, team members start to withhold information or dress-up their image rather than sharing freely and commenting helpfully on the collective work process .

Second, the so-called effect of mere presence triggers either social facilitation or inhibition. Imagine your playing the guitar either alone or in front of an audience. Sometimes, others' "mere" presence leads to a performance never achieved before, but sometimes, felt pressure and anxiety make free and creative play impossible.

The bad news for knowledge and creative work is that the decisive factor, whether performance increases or decreases with others watching is task complexity and difficulty. The more challenging and more complex a task, the more likely fear kicks in, and performance falters .

And now? Unsmart your goals!

Where does this leave us?

Clear goals are still needed to enable thriving and making progress. But these goals are better co-created and defined on the team level: in this way, teams can define their own criteria of success, while for team-members, some room for maneuver is left.

Also, ungoaled time - free time - enables the needed incubation for creativity and innovation.

Besides, moonshot goals create inspiration – but these ideally come in the form of a long-term "Everest goal" – directed toward abundance and the greater good in mind and not toward specific overambitious output targets.

And finally, goal transparency can be an information sharing and co-creation booster, but not without leaving room for experimentation in privacy.

Or, as an alternative summary: Just because Google made it famous does not mean we should embrace an instrument as "best practice." Sometimes unsmarter, less engineered "nonfoci Rs" might work better.


This is a guest post by Antoinette Weibel, professor for HRM (and secretly also for leadership) at the University of St. Gallen, and Meike Wiemann, a senior researcher, project manager and lecturer at the University of St.Gallen. For more information on Antoinette and Meike, check out their rebel pages: Antoinette's rebel page and
Meike's rebel page.

Subscribe to our newsletter

Share


leave a reply

Replies (21)

Henk

Henk

Thank you for this great blog Antoinette. We have been working with OKR’s for a relatively short time and approve the process each quarter. I do recognize some of the ‘overheating’ effects that you point out. Will certainly do something with your advice and would love to exchange thoughts one day!

| | 4 | Flag
Denise Hanlon

Denise Hanlon

Love this. OKR's, FAST goals, KRA's, KPI's....have all been around for donkey's years. Sadly, those who haven't been around as long as some of us, think it's all new. If it quacks like a duck.......it's still a draconian, top-down way of 'managing' rather than 'motivating' employees.

| | 7 | Flag
jpmort

jpmort

It just shows that it is not the tool tat is at fault, but the underlying concept and how those who use them, actually apply them in practice. The way that a manager will call someone into their office if they fall below the standard is a good example of command & control thinking, regardless of the type of 'tool' that is used.
If that same manager, went out into the work by sitting with staff following the flow of work, to understand why different staff were coming up with different outcomes. That manager then realised that the causes of variation could be expected, or down to elements of the systems that drive that variation. Then that would be an example of a good way of working.

| | 6 | Flag
Brett Sadler

Brett Sadler

The problem is that outcome-based goals create a focus on only one aspect of the whole: the 'What'. That's why they are so often hard to achieve.

To achieve desired outcomes we need to also address the How and Who and also understand how the outcome relates to our Why or purpose, and these need to be aligned between individual and organisation.

Personally, I've always found that the Who is most important as it is about connecting at an individual level. "Who do I/we need to become?" is important to understand as it drives behaviours and ultimately determines our success or otherwise.

To achieve more you first have to become more. That's always the big issue with performance management: it focusses on getting individuals to change their behaviour, usually without doing anything to address the internal (personal) or external environment that gives rise to the behaviour.

Change and growth comes from the inside out, and that's as true of organisations as it is of individuals.

| | 6 | Flag
Urs

Urs

Thanks a lot Antoinette for sharing this great and very helpful "package insert" on OKRs.
I couldn't agree more that it is very dangerous and misleading to see OKRs as the next silver bullet for easy personal and organizational development. To lead people and organizations built on trust is intense work and there is no silver bullet. This is especially important to keep in mind when approaches become trendy and main stream. At the end OKRs are a tool like many others and there is a good chance to hurt yourself with all those tools.
I nevertheless find OKRs helpful to trigger intensive discussions and to balance all those risks that are mentioned in the article like overheating, blind goal setting or violation of privacy. The vertical alignment with the purpose, values, vision can be also helpful to live and not only define the foundation of a team or organization.
Without the necessary exchange, alignment and balance OKRs will become the next bureaucratic overhead and soon after another unused gadget in the agile toolbox. Or to quote Grady Booch who famously said "A fool with a tool is still a fool."

| | 6 | Flag
Claudia

Claudia

Thanks for your thoughts. I don't think I fully get the And now? Unsmart your goals! section ...especially the alternative summary?

During my long time in business I have probably experienced most of the approaches you mention throughout the article - and I would now never just use any of them by just using their text book definition.

I would make OKRs or whatever else we want to call it work for the firm or better for the people within it.

The problem is not the objective setting but that companies want to use a one size fits all approach so that they can use a digital tool to collect 'Data' and apparently make manage people's performance consistent / as little work for the leader as possible.

Isn't the real problem that leaders/managers do not want to do the work and take the time to make it work for the individual?

For me there is a big difference to just measure performance and for actually taking time to develop or grow people. For the latter it is a lot of work

| | 5 | Flag
nadim matta

nadim matta

Thank you for the thoughtful analysis of the context related to goal setting and its impact on performance. I find this topic fascinating and crucial for understanding and inspiring collaboration and innovation in teams - both within and across organizations.

My worry is that some readers would interpret the blog as a justification for having no goals or fuzzy goals or just long term aspirational goals, mostly to fit and justify their ideologies about management and leadership...Throwing the baby out with the bath water.

BTW - my initial post was rejected because I typed my email wrong - so I messaged Prof Antoinette on LinkedIn with similar thoughts. She was gracious enough to respond quickly and of course super thoughtfully. I will leave it to her to continue the conversation here. It is a topic that has fascinated me for many years.

| | 2 | Flag
jpmort

jpmort

Nadim, you make a good point, that sometimes people think that the error of KPIs means that we dont need to have clarity, or a focus. That focus is really really important.

| | 1 | Flag
Stuart

Stuart

I have been fascinated by goal setting, goal achievement and OKRs for some time and find that the variety of tools, frameworks and mechanisms all have something to offer. In my experience it's the dialogue, the conversations, the ideas, the interaction, the focus, the prioritisation and ultimately the execution of all of these ways of workings that becomes the most important part.

Team engagement, problem solving, 'bottom up' thinking can all form part of the deployment of OKRs, just like they can for any other framework suggested. I am not particularly wed to any one way of working but truly believe that communication and leadership are the key to a successful deployment and importantly delivery of any goal setting mechanism.

| | 7 | Flag
RJ

RJ

Great topic and some fantastic perspectives in the comments! From my read - I think audacious multi-year vision, with incremental (maybe quarterly but maybe more/less frequent) hypotheses to test/iterate/evolve towards these. I feel that OKRs can help if set "bottom-up" as measurable hypotheses by teams to align with the audacious vision. Equally, I feel that OKRs can hinder if driven "top-down" to mandate objectives as to-do lists to disempowered teams.

| | 1 | Flag
Flags are private, only visible to forum moderators. Be specific: "It's spam/off-topic/inappropriate because..."
submit

Leave a reply

This field is required. Only use letters, digits, spaces and minus characters.
This field is required.
This field is required.
We only use your email for spam detection purposes.