Business leaders who embrace Objectives and Key Results (OKRs) do so because they seek transformational change. But it’s important to remember that the framework itself is not a silver bullet.
Introducing and embedding OKRs takes time, commitment and buy-in at all levels. But, even once you’ve mastered the skills required, you may still find you are not achieving the outcomes you’d aimed for.
That’s because, although OKRs is a powerful tool, it’s ultimately your people that make change happen. So understanding what drives and connects them is key to OKRs success.
Businesses are human systems. And, like all systems, the better organised and interconnected they are the better they perform.
“A system isn’t just any old collection of things. A system is an interconnected set of elements that are coherently organised in a way that achieves something”
Donella H. Meadows in Thinking in Systems: A Primer
So what makes people want to get behind a common goal and embrace a different way of working? At AuxinOKR we believe the answer starts with purpose. Or, to put it another way, a person’s ability to answer these two simple questions:
- Why am I doing this?
- Why are we doing this?
Belief in a common purpose motivates people to alter their behaviour both individually and collectively. When this behavioural change leads to positive outcomes their belief gets stronger and motivation increases.
OKRs enable this process to gather and maintain momentum. But before I explain how it’s worth exploring each element in detail to see how they relate to each other.
Purpose
More and more people today want to work for employers with a clear purpose. Businesses and organisations that aren’t just there to make money for a single stakeholder or achieve growth at all cost but that have a set of deeply-held values that they, as employees, can subscribe to and believe in. While increasingly customers and other stakeholders of a business expect it to do more than offer products and services.
Consultancy firm EY defines companies with purpose as those that “create value for a broad set of stakeholders, including society and the environment and that have an aspirational reason for being that is grounded in humanity and that inspires a clear call to action.”
Blueprint for Better Business offers five principles of what a purpose-led organisation might look like. In their words a purpose-led organisation:
- Has a purpose which delivers long-term sustainable performance
- Is honest and fair with customers and suppliers
- Is a good citizen
- Is a responsible and responsive employer
- Is a guardian for future generations
Research has shown that 75% of executives of purposeful companies recognise that purpose drives value over the short and longer term. Including: building customer loyalty; preserving brand reputation; delivering innovative products and services; as well as attracting and retaining top talent.
Movements such as B Corporation and Game Changers are encouraging organisations to become purpose-led and transparent by making a pledge and registering their support while Governments are passing laws to make environmental, social and corporate governance (ESG) reporting mandatory. Meaning stakeholders including customers, investors, employees and the wider public are able see the impact a business has on people and the planet.
Beliefs
It is widely recognised that our belief system drives our behaviour. Educational Psychologist Dr. Bobby Hoffman proposes that human behaviour is based on a set of five tacit self-beliefs that in aggregate determine what we do, how we do it and how we see our accomplishments.
These self-beliefs are not religious, secular or political but rather a set of guiding principles about our personal capabilities and the outcomes we expect as a result of our efforts. Operating on a subconscious level these five self-beliefs are:
1. Control
This dictates whether a person pursues goals and tasks for reasons external to themselves or to satisfy an inner striving. Those with stronger control beliefs feel in command of their world as they perceive it. Taking responsibility for their actions they believe they can orchestrate their desired outcomes. While those with weaker control beliefs feel as if their destiny is out of their hands. Individuals like this tend to not seek challenges and avoid setting goals, often settling for the status quo instead.
2. Competency
This is based on our assessment of our ability to achieve desired outcomes. Including appraisals of our perceived skills and abilities to complete a task. Assessments could be based on past performance or the anticipation of achieving desirable outcomes from a challenge. Those with strong competency beliefs judge their degree of competence not on actual ability or knowledge but on presumed competence, including the perception of them by others. While those with weaker competency beliefs tend to avoid or defer challenges, driven by fear of failure or of receiving an undesirable evaluation from others.
3. Value
This concerns the degree of value we associate with different tasks and outcomes. When we ascribe a low value to a potential goal or task we are reluctant to invest much effort in achieving it. Value assessments are measured in two ways. Intrinsic value measures how much we enjoy doing something while utility value represents the perceived usefulness we apply to mastering and completing a task or achieving an outcome.
4. Goal-orientation
The reason we pursue goals, engage in learning and set performance targets. Appearance-oriented individuals are less concerned with achieving results and more in how they are perceived by others. While mastery-oriented individuals show greater interest in the accumulation of knowledge than in how it looks. These individuals are more inclined to seek help when needed, are better at monitoring progress and are more willing to try different ways to reach desired outcomes.
5. Epistemology
This final self-belief concerns our individual perception on knowledge acquisition and intelligence. Some people believe that knowledge is fixed and that there is only one way to approach a problem or opportunity. While others take a more flexible approach believing other’s opinions are justified and equally warranted so are more willing to consider different perspectives.
Closely related is a person’s view on general intelligence. Those with an entity view believe that a person’s intelligence level is fixed and must be accepted. While others take an incremental view believing that intelligence has a malleable quality and can be increased through efforts.
Motivation
Motivation at work falls into two categories. Extrinsic motivation is driven by the prospect of external rewards such as a pay rise, bonuses or recognition for a job well done. While intrinsic motivation comes from inside and speaks to a positive emotional response, like a feeling of enjoyment and fulfilment for example.
There are many reasons why we, as individuals, turn up for work everyday. These include: enjoying our role; the challenge it presents; the culture of the organisation we work for; the people we work with; the opportunities it provides to further our career; and the money we receive at the end of the month.
Conventional wisdom states that those who are more intrinsically motivated make better employees. In his best-selling book Drive author Dan Pink sets out a model for helping employees become more intrinsically motivated. Stating that rewards alone do little to improve a person’s engagement with tasks and that the ‘carrot and stick’ approach of old is no longer effective in the modern workplace.
Self determination theory suggests that people are motivated by three innate needs:
- Autonomy — people need to feel in control of their own behaviour and goals.
- Competence — people need to master the skills required for success.
- Connection — people need to feel a sense of belonging and attachment to others.
Although this differs slightly from Pink’s model, they reach similar conclusions, namely that when people feel in control, competent and connected they are more empowered, committed and interested in the things they do.
Behaviour
Effective business leaders realised long ago that the ‘command and control’ approach of the past is simply not sustainable. Recognising instead the importance of clarity, connection and consideration in every person-to-person interaction. A leader’s role is to guide and encourage individuals towards certain positive behaviours like:
- Championing company values
- Commitment, cooperation and collaboration
- Welcoming new ideas
- Supporting, trusting and respecting one another
- Communicating clearly and often
The more individuals that demonstrate these positive behaviours the more effective a team becomes.
OKRs as a catalyst
When looking at purpose, beliefs, motivation and behaviour in this way the common themes that run throughout each become apparent. But if a business is to achieve transformational change, it needs defined goals and a clear plan to achieve them as well as a way to measure progress.
And this is where Objectives and Key Results come in.
When combined with a clear purpose OKRs act as a catalyst increasing conductivity between beliefs, motivation and behaviour.
OKRs actively encourage autonomy, competence and connection (self-determination) amongst teams while providing demonstrable proof that behavioural change delivers positive outcomes.
When your employees believe they have a positive effect on outcomes at work, they become more motivated and engaged. While the conversations, feedback and recognition OKRs promote, support and encourage them as they learn and grow.
As the habits and skills required become second nature so OKRs help build a high-performing team. A team with clearly defined goals and committed actions. With true transparency and accountability. A team that is willing and able to communicate clearly and celebrate each other’s successes.