In this interview, we are delighted to welcome Jeff Gothelf and Josh Seiden, acclaimed authors and industry experts, to discuss their latest book, “Who Does What By How Much?” This insightful work delves into the intricacies of implementing Objective and Key Results (OKRs) within organizations, emphasizing a customer-centric approach. Jeff and Josh bring their extensive experience as individual contributors, leaders, founders, and consultants to the table, offering practical advice on overcoming common challenges, setting meaningful goals, and fostering a culture of continuous improvement. Join us as they share their valuable insights on transforming traditional OKRs to drive real business outcomes and enhance customer experiences.
In your experience, what are the most common challenges organizations face when implementing OKRs, and how does your book address these challenges?
OKRs pose several challenges to organizations to make them successful. Let’s focus on the top 2 — outcomes and self-determination.
In our book we are adamant that key results must be outcomes — measurable changes in human behavior that drive business results. Most organizations however think about goals in one of two ways: revenue and/or the delivery of a product. Outcomes happen in between delivery of a product and revenue. Outcomes are the things people do in your product, service or system prior to you making money. These goals aren’t binary like the production of a product (i.e., generating output). They require new tools, systems, and incentives to measure and reward.
Another big change we describe in our book on OKRs is an explicit request for teams to set their own goals. Many organizations prefer to tell their teams what their goals are. In the OKR system we describe in our book, leadership sets strategy and organization-level OKRs. Teams then work to set goals that they can influence, much more specific than “revenue”, and then connect them to the leadership OKRs as leading indicators. Companies struggle to let teams self-determine goals yet the evidence shows consistently that teams do better work when they set their own goals.
How do customer-centric OKRs differ from traditional OKRs, and what are the unique benefits of focusing on customer-centric metrics?
OKRs have been around for more than 40 years. As originally described by Andy Grove and later by John Doerr the key results can be anything — an action, an output, a
product, a task or C-level KPI. In our book, we recommend strongly that your key results be outcomes — measures of human behavior that drive business results. Why? Outcomes tell you what people, your customers/users, are doing with your product, service or campaign AFTER you’ve delivered it. The simple act of delivering something to market, especially with the tools we have today, is the beginning of the conversation with our customers. Did they see it? Did it pique their curiosity? Did they act on that curiosity? What did they do? Did they have a good experience? Did they come back? These measures of human behaviors, outcomes make customer-centric OKRs far more effective than traditional ones.
Can you share an example of an organization that successfully transformed its approach using customer-centric OKRs? What were the key factors in their success?
In our book we discuss a large British telco that used OKRs to improve their customer experience both online and in their physical stores. The key tactics this organization used to make OKRs successful and effective was to focus first on their B2C operations. They used their online channel as the starting point because websites and apps are relatively easy to change, update and to learn from. You can measure the efficacy of new features and workflows quickly. They used that information to then adjust their work on much shorter cycles. Their measure of success shifted away from “launch the mobile app” to “increase the percentage of customer service queries handled through the mobile app without human contact.”
The other tactic they used was to start small. This company employs 60,000 people. They didn’t try to change everyone’s goals overnight. They started with 600 people, figured out how to make it work in that group. They then used the learnings as well as the evidence that the process works to scale up to 1000, then 5000 and so on.
What are some practical steps leaders can take to ensure their teams are working on the ‘right stuff’ rather than just working hard?
Leaders are the key to OKR success. If they can change the questions they ask their teams on a regular basis, OKRs stand a much better chance of success. For example, instead of asking, “What are you building this quarter?” Leaders should ask, “What’s the most important thing you’re trying to learn this quarter?” This fundamental shift changes the conversation away from producing a feature or product to the impact the team is trying to have on their customers. Another good question for the team is, “What will
people be doing differently if we build the product well?” This simple act of asking questions changes the teams’ view of leadership’s expectations. Instead of focusing strictly on delivering more output, we’re now discussing how to make the customer successful. OKRs fit right into that new mindset.
How does your book integrate your past experiences as individual contributors, leaders, founders, and consultants into the practical advice offered?
In our combined nearly 60 years of work experience we’ve seen organizations work well and organizations fail. We’ve launched our own businesses, proven some of our hypotheses and invalidated others. One thing we continually saw as both a barrier and an enable to organizational success was goals. What goals does the company have? How are they set and measured? What happens when the company learns something that contradicts the goals? These observations have convinced us that setting customer-centric goals ensures the company is always working on the most valuable initiatives and measuring success not on its ability to produce but to positively impact the behavior of their customers. We’ve seen this across industries — from financial services to non-profits — and markets as well as geographies. Human behavior is the true sign of delivered value.
What role does company culture play in the successful adoption of OKRs, and how can leaders cultivate a culture that supports continuous improvement and alignment with organizational goals?
OKRs thrive in a culture of learning. If leaders want OKRs to succeed they must enable learning to take place and, equally as important, to be applied to the work currently being done. The easiest way to enable this culture shift is to model this behavior for the company. When teams see their leaders change their minds in the face of evidence that contradicts the current plan, they know it’s safe for them to do the same. OKRs set behavior change as a goal, not the production of something. If the work the team is doing isn’t driving the desired behavior change, we now have evidence to change course. If the corporate culture makes it safe for the team to share that info and change the plan based on it, OKRs will thrive and so will the company.
THE MYSTERIOUS CASE OF EXECUTIVE BUY-IN FOR OKRS
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