OKRs are a Sociotechnical system; they depend on “the iteration between the social and technical aspects of organizational structure and processes.” In most OKR implementations, organizations focus on the technical aspects: writing great objectives, identifying S.M.A.R.T. Key Results, using the Google scoring framework, etc. The truth is, these are critical, but only constitute about 20% of what makes an OKR solution great.
80% of great OKR Solutions comes from the social structure of your organization, and how the organization talks about performance.
These are things like:
- Just talking about performance - having more frequent, less formal performance conversations,
- Talking about performance in all groups, whether they're 1-on-1’s, teams, departments, or company-wide, and at all levels, across all regions, covering all products and services,
- Helping people understand how their work has a purpose and connects to the organization's strategic objectives, Mission, Vision, and values,
- Making those conversations risk-free, so that everyone can understand and contribute,
- Allowing these conversations to flow freely whether in face-to-face meetings, web meetings, or asynchronous communication through emails, Slack, Teams, Jura, etc.
We in almost every organization fail that focus on the technical aspects. We have also seen every organization succeed when they put a higher focus on the social side of performance.
The interesting thing is that any organization can achieve that social focus, literally, the same day that you begin your OKR campaign. In other words, you can begin seeing significant benefits from an OKR journey from day two.
This blog post outlines how to do this based on our experience from over 3000 OKR implementations from all sectors and around the world.
What is the current level of Employee Engagement?
According to Gallup:
There are a number of factors that contribute to employee engagement:
Why is employee engagement important to company success?
Looking at these stats, we can only conclude that the majority of your employees are basically unmotivated at work, this manifests itself in a variety of ways in the office - decreased productivity, lack of interest in collaboration, impact on your company culture, employee churn, an attitude of doing the bare minimum, and then clocking out - which can have a significant financial impact.
This might seem like an astronomical number, and it is. So let’s break that down further: Gallup found that actively disengaged employees cost their employers 34% of their annual salary, in other words: $3,400 for every $10,000 they earn. For your average employee making $60,000 a year, that’s $20,400. Multiply that by the average 13% of employees who are actively disengaged, and that adds up to hundreds of thousands of dollars in lost productivity. When was the last time you saw that on your organization’s finance report?
Who is responsible for employee engagement?
Well, basically every single person that works in a company has something to do with employee engagement, but especially those in leadership positions:
This study can be downloaded here
What are the drivers of Employee Engagement?
Daniel Pink is a bestselling author that argues that the evidence of scientific studies on motivation and rewards suggests that, for any work task that involves more than the most basic cognitive challenge, basic financial reward systems simply do not work. In fact, they can lead to a worse performance.
Basically, when employees feel that their paychecks are fair, they start searching for other motivators to perform better.
According to Pink in his book “Drive”, intrinsic motivation for engaged employees is based on three key factors: Autonomy, Mastery, and Purpose. Based on experience using OKRs, we’ve added two more intrinsic motivators critical to engaging employees: Progress and Socialization.
A summary of these key points on the intrinsic elements of motivation is provided below:
Purpose - The desire to do things in service of something larger than ourselves. Pink argues that people intrinsically want to do things that matter.
Mastery - The desire to continually improve at something that matters. Pink argues that humans love to "get better at stuff" - they enjoy the satisfaction from personal achievement and progress. Allowing employees to enjoy a sense of progress at work contributes to their inner drive.
Progress - The desire of seeing how successfully we are achieving our objectives. Allow everyone to have a clear visibility of all OKRs n the business. Shift the culture towards assisting others in need and have risk-free conversations as needed.
Autonomy - The desire to direct our own lives. Pink argues that allowing employees autonomy runs counter to the traditional view of management which wants employees to "comply" with what is required of them. But if employee managers want employees to be more engaged, allowing them autonomy works better.
Socialization - The desire of making performance part of our daily habits. This is what John Doerr refers to as CFRs (conversation, feedback, recognition). We need to have clear data and analysis of the OKRs and communicate on how to address failures and successes.
The Three Steps to Build Employee Engagement
The three steps are straightforward (the trick is in how to take each step without overwhelming the business), and they are key in your quest of how to engage employees:
1. Talk - Gently begin the practice of guessing everyone in the organization to talk about their area's performance to whatever extent they can. For Frontline workers you might find this conversation talks only about their daily activities within a fairly narrow job description, whereas for senior teams the conversation might be around more complex issues and extending further out in time.
Regardless of where this conversation occurs, it merely needs to occur. It is important that these conversations are made to be risk-free and may tend to focus more on feelings than facts.
1. Align - once a cadence of conversation has been established, small steps can be made towards helping every employee understand how their work ladders up the organization, eventually leading to the organization's purpose, Mission Vision, and values.Research indicates that this is a critical step in everyone's connection with the organization: understanding their purpose.
These conversations can become slightly more fact-based by adding in ad-hoc scoring (red, yellow, green) thereby creating a risk-free environment in which all performance can be accurately and honestly graded. And in situations where individuals and teams need support, as indicated by a red flag, the rest of the team will rally around to their support.
These conversations build a foundation of trust and understanding that there is a relationship between their ability to perform and their contribution to their teammates, and your organization.
These conversations are critical to both establishing that honest risk-free communication but also lays the foundation for more facts-based assessments.
3. Act - now that you've established this transparency and ability to have honest and risk-free conversations about performance, you can gradually add more rigor into the process by adding things like S.M.A.R.T. measures, project milestones, clear accountability (e.g. RACI), timelines, cross-functional linkages.
This creates natural teams in which performance transparency and honesty allow everyone in the team to see how we're performing overall and, like with a sports team, allow different lines and shifts to come to the aid of their teammates, even without management’s intervention. We have seen many organizations quickly progress to self-managed work teams once they achieve this skill level.
We often visualize these three steps as 3 steps in a staircase:
Different organizations can actually enter the staircase at different steps. If you already have an established culture of risk-free performance conversations you may start on Step 2: Align. If you have clear alignment around your strategic objectives and priorities and an accurate cascade down the organization (or ladder up the organization, depending on how you see it) you may start on step 3: Act.
Our observation is that many organizations mistakenly start on step 3 and find that the lack of social and cultural foundation, or an accurate strategy cascade results in the rocket failure of their OKR solution.
Mixing are metaphors, this is almost like a walk, jog, run fitness campaign. One needs to both gradually build up your bench strength and also those daily habits (tiny changes, ℅ James Clear) that underpinned the major changes.
Why this Approach works
The walk-jog-run approach is basically how we all learn to do everything. An infant cannot run if they don’t learn to walk first; anyone wanting to improve their physical fitness starts the same way; managers and directors also start like any other employee, they learn and improve and eventually move themselves forward.
To get the best results out of the OKR framework, it’s important to follow the same steps, having a strong foundation, a steady purpose, and mastery the needed skills to obtain the desired progress and results, developing autonomous employees that are intrinsically motivated to fulfill expectations.
This is what Daniel Pink refers to in his book called “Drive” when addressing the key components of intrinsic motivation. Pink's model focuses on enabling people to become intrinsically motivated, using internal drivers as a source of motivation:
The Fogg Behavior Model (FBM) highlights three principal elements as the drivers of behavior. The FBM outlines Core Motivators (Motivation), Simplicity Factors (Ability), and the types of Prompts.
If we apply BJ Fogg’s Behaviour Model to an OKR framework focusing mainly on simplicity, we are better off simplifying our approach and starting small. Once we begin with an OKR habit or behavior that we can sustain, we can then incrementally increase the difficulty over time.
These are two of the golden rules in behavior change: Make it simple and start small.
We dramatically increase our chances of success if we start with something that is relatively easy, that is, something we can do even on a bad day. Then as we get into the habit of doing it, we can increase the difficulty and make it more challenging as time goes on.
A Case Study:
Cience is a tech-enabled service business that helps build sales funnels from a service, data, and software perspective. We spoke with John Girard, CEO, about the culture at Cience and how they’re using Hirebook to improve their internal performance processes.
To date, Cience has worked with companies such as Microsoft and Okta, down to startups trying to establish product-market fit.
Over the last two quarters, Cience has worked this data-driven methodology into their performance space. They recently switched to OKRs as their primary goal-setting framework after using a modified system to build up the muscle for leadership participation and buy-in.
OKRs provide them with a more precise measuring stick, allowing them to tie day-to-day actions to mid and long-term goals. Combined with regular monthly check-ins, Cience is solidifying its near, middle, and long-term thinking.
Cience currently uses Hirebook with its leadership team of 18 people for weekly check-ins. According to John, the most sophisticated part of the tool is actually the asynchronous features that allow you to communicate with your team outside of the check-in feature, which really enhances team efficiency.
Hirebook’s solutions allow companies to be proactive and intentional about what they’re working on, as well as priorities that change.
Cience is partnering with Hirebook to crack the code on OKRs. They’re excited to work within a process that promotes transparency and accountability for everyone in the company, helping them to see how their day-to-day tasks connect to broad company goals. More importantly, they offer visibility to the leadership team to better understand employee progress and blockers.
By having a software that allows them to crisply define goals and combine that with frequent feedback touchpoints, Cience can align their values of data-focused curiosity with the world of performance management.
As you can see, OKRs have a lot to do in how to engage employees! And that’s because a lot of factors of employee engagement lie within employees’ abilities and motivations. When our entire company is aligned with specific OKRs across the organization, employees and managers feel drawn to performing better because they know how important their tasks are. Remember that, wherever you stand, every step you take to improve engagement is already a step towards success!