Book: Succeeding with OKRs in Agile (2nd Edition)
Author: Allan Kelly
Part: V — Forewarnings
Chapter: 26 — Aspirational or utility
Reading time: 9 minutes
Tags: aspirational-okrs utility-mode-okrs moonshot-goals okr-adoption predictability-tension psychological-safety culture-readiness conservative-okrs okr-maturity aspiration-vs-utility okr-adoption-route failure-acceptance
Summary: Kelly distinguishes between aspirational OKRs (moonshots where missing is expected) and utility OKRs (pragmatic shared goals without 10x ambition). He argues that utility mode still delivers significant benefits — focus, communication, medium-term planning — and is safer for organizations without strong psychological safety. The chapter provides an adoption route from utility to aspirational as culture matures.
It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all – in which case, you fail by default.
J K Rowling, author
Our problem is not that we aim too high and miss, but that we aim too low and hit.
Variously attributed to Artistotle, American motivational speaker Les Brown and others
Most of the accounts of OKRs emphasize their aspirational nature. While the aspirational attributes of OKRs are highly desirable, there is significant value in using OKRs even if your aspirations are a little more mundane.
Used in aspirational mode OKRs are ‘moonshots’. OKRs motivate teams to achieve ‘10x’ (that’s ten times to most of us) performance. It could be 10x team effectiveness, 10x product impact or both. In aspirational mode OKRs aim higher than the team believes it can achieve. The organization accepts that OKRs will be missed, that teams will fail. In fact, teams are expected to fail their OKRs.
The underlying assumption is that a team aiming to achieve a tenfold improvement – say boosting website views from 1,000 a day to 10,000 a day – may miss its target. But in aiming ridiculously high, the team will outperform a more modest team that aims low and achieves its goal.
Failing to meet a tenfold improvement target – say achieving 5,000 views per day – will still be a greater improvement than a team that plays safe. A team that is playing safe may aim for a 10% improvement – say to raise views per day from 1,000 to 1,100 – and may well meet its goal.
The outcome-oriented nature of OKRs implicitly recognizes that labels like ‘success’ and ‘failure’ are less important than the result achieved. There is however a conflict hidden in this approach: a ‘failure’ can be a better result than a ‘success’. This can create cognitive dissonance for both team members and those managing such teams.
An outcome can have both success (“We raised website views five-fold!”) and failure (“We missed our OKR!”). As is often the case, the labels success and failure are applied after the event and depend on perspective. On the face of it OKRs are objective (you hit or miss) but subjectivity is never far away.
26.1 Utility mode
Alternatively the OKR mechanism can be used in utility mode. Even without 10x aspirations there are still benefits from having shared team OKRs. These have already been outlined, but are with repeating:
- Promoting an outcome orientation and business benefit.
- Prioritizing work to be done.
- Increasing focus by de-prioritizing potential work, thereby allowing focus on remaining work.
- Sharing goals across the team.
- Communicating team goals to the wider organization.
- Providing medium-term planning.
- Clarifying targets and objectives.
- Creating context for technical and business decisions.
Even without aspirations OKRs have plenty to offer. There is benefit in using OKRs even when used in a conservative utility mode. For those adopting OKRs for the first time, this approach sidesteps several potential pitfalls.
26.2 Predictability
Aiming high and accepting ‘failure’ sounds good and aspirational. But organizations value predictability; aiming high and accepting that you might miss doesn’t sit well with those who want certainty. I remember one set of stakeholders who became agitated when told a team only expected to achieve 70% of planned OKRs.
Utility mode OKRs can help here too. Aiming high when stakeholders and the organization value predictability is probably not a good tactic. As a tool OKRs can still help and still deliver benefits. You might want to rate each OKR on a scale of 1 to 10, where 1 is unlikely and 10 very likely. Show your stakeholders, and if they are unhappy rework the OKRs so that they fit an acceptable risk profile.
To complicate matters, unfortunately organizations and even individuals are not always consistent. While one leader advocates aspirational OKRs, and even claims to accept failure, others might demand certainty. In such cases you might want to bring divergent thinkers together and outline the mismatch.
26.3 Creating aspirations?
It would be naive to claim that adding OKRs to any team will miraculously turn it into a high-performing aspirational one. Naturally I would love it if this were the case, but ‘just add OKRs’ is not as simple as ‘just add water’.
OKRs are certainly one tool for nudging a team towards higher performance and greater aspiration, but they are not enough on their own. Promoting high performance and aspiration requires a supportive environment and culture – in other words, psychological safety (discussed earlier).
Many accounts of OKRs focus on the aspirational nature of OKRs in Google and Intel. As such these accounts say much about the culture and approach of highly successful companies. Entire books have been written about these companies and how they foster such a culture, so I will only point out a few elements:
- A ‘safe to fail’ environment.
- Motivated individuals.
- Opportunity and a resource-rich environment, with a willingness to let motivated individuals fail.
- Evaluation and reward systems that recognize failures as being equivalent to successes.
Even Google and Intel will fail on some of these points – and those who know these companies from the inside may see more inconsistencies. But even as they fail on some points, they succeed on enough points to perpetuate a culture that values aspiration.
Once a company has such a culture the whole thing becomes self-perpetuating (indeed, all cultures tend to become self-perpetuating, for better or for worse). Individuals who value these attributes will want to work at such places, while those who don’t share their values will go elsewhere. Peer pressure and individuals’ desire to fit in will become self-reinforcing.
26.4 Leaders and culture
For companies that want to adopt aspects of aspirational culture – what might be called Silicon Valley culture – there are formidable obstacles. OKRs may well form part of that change, but they are not alone.
In particular, companies need to recognize that the people they employ are, almost by definition, different to people who work in companies with an aspirational culture. The existing company culture will have already filtered out some of these aspirational individuals.
Those who are employed have proved themselves compatible with the existing culture; that culture will have rewarded them for working within it and punished them for not doing so. Over time it will filter out people who are incompatible. Switching to an aspirational culture takes more than flipping the ‘OKR light switch’.
Company leaders usually recognize this, but often fail to comprehend how their own actions are seen. A leader can stand on stage and tell their workforce passionately about the change they want to see, they can articulate OKRs in detail, and they can truly believe what they say. But workers have often seen this before: company change programmes come along regularly. Leaders frequently want to change something. Workers are almost programmed to be cynical.
As a result workers listen and watch. They look to see if the leader is walking the walk or just talking the talk. The cynical amongst them believe it is all ‘management talk’. Any action the leader takes – any displeasure they voice, any incongruent set of actions, let alone anger or punishment meted out – will quickly be seized on as proof that they do not mean what they say.
26.5 An OKR adoption route
If you work in a high-performing aspirational company, then great. Adopt OKRs and everything will be even better.
For everyone else, let me make a suggestion.
Aspire to aspirational OKRs, but make the change in small steps.
A psychologically safe environment is critical for aspirational OKRs to work. So do a quick assessment, and if you are anything less than 100% sure, start the conversation about what is needed and ask for help. If your objective is success with OKRs, then the first key result is a boost in psychological safety.
Start by using OKRs in utility mode. Better still, perform the exercise I describe next; you might find you are not quite as ‘utility mode’ as you think. But wherever you start, just start.
Start setting OKRs on a regular basis. Work towards them and get better at setting and delivering against your OKRs. Inject safety into the system before teams are ready to use it,
so that they can ‘take up the slack’ when they are ready. With time the team may be willing to take on more risk and be more aspirational.
While the team is perfecting its use of utility-mode OKRs, work on the rest of the company. My guess is that if you are adopting OKRs, you are not alone. Other teams may be adopting them, while more senior people in the company may want them to be adopted. Work with the grain and nudge these people in the right direction.
As you do so, the problems of using OKRs in an unfriendly environment will become clearer. Work on these issues. Use OKRs as a problem detector to find out what needs to be changed. Don’t work alone, work with others who are adopting OKRs to nudge people and the organization in the right direction.
Work on yourself: indeed work to change yourself more than anyone else. Keep an eye on your language: ‘success’ and ‘failure’ are loaded terms. Make sure your actions fit with your talk: you are a leader too and you also need to ‘walk the walk’.
Involve your personnel and human resources staff: ask them to observe your OKR-setting and ask for their thoughts. Show them the outcomes: working software. Keep talking to them.
Above all else you need to work out how OKRs relate to your performance appraisal programmes and salary reviews. The simplest advice is to keep OKRs separate from these annual checkpoints, but no organization seems to follow this advice.
Progress to conversation with your superiors and the people to which the team answers. Some discussions are better held in the open with other team members, while others are better held in private with superiors.
This isn’t a comprehensive list of suggestions, it isn’t even a long list, but it is a starting point.
26.6 Exercise: where are you?
Imagine a line of numbers from one to ten. At one end ‘one’ is labelled utility mode. Here OKRs are used for team cohesion, shared understanding and medium-term planning. Achieving the objectives and key results is important.
The other end of the line, ‘ten’, is labelled aspirational mode. At this end teams are stretching themselves, aiming for 10x solutions and shooting for the moon. The team, those around them, and importantly management, recognize that OKRs may be hit or missed. The real evaluation is the outcome of the work of the team.
Utility mode is one end of the spectrum, aspirational mode is the other
All ten points on this spectrum are respectable places to be. Each position represents a legitimate way of working.
Ask yourself: where would you put your team on this spectrum?
The position you choose will naturally reflect your own ambitions and aspirations. It will also reflect the environment you work in: high-risk high-reward start-up or low-risk modestreward legacy bank.
Knowing your appetite for risk will help you when setting OKRs.
More importantly, you will want to agree this position with your team. After all, the whole team is signing up to a set of OKRs, so it is important that the whole team understands the context. Don’t impose your position on the team, so ask members where they think the team should aim.
Start by drawing the line on a board. Mark it 1 to 10 and talk about what each extreme implies. Then have every team member write down the number that reflects the position they think the team should occupy. Wait till everyone has written down their own private number, put the papers in a pile and shuffle them to keep answers anonymous. Then mark the numbers on the 1 to 10 line.
Discuss the results. Maybe the whole team agrees, which is great. If not, ask why some people might vote low and some high. Work through the reasoning and decide on a shared position.
26.7 Summary
• Advocates of OKRs usually emphasize their aspirational nature. While aspirational OKRs can be immensely powerful, they only work when the organization has a compatible culture and provides psychological safety.
- The other benefits of OKRs justify using them in utility mode: to create focus around shared priorities, promote medium-term planning, communicate direction and more. Such utility OKRs can have benefits even if it is only your team using them.
- OKRs can help where a company is attempting to transition to a more aspirational culture. However they are not enough on their own. More needs to change to make the organization and culture aspirational.